One more observation from the 10Q
We believe our existing cash and cash from operations will not be sufficient for us to meet our cash requirements for at least the next 90 days. We will, therefore, need to obtain additional financing to implement our business plan. We are exploring a variety of financing alternatives in order to fund implementation of our business plan, and intend to raise additional capital through public or private sales of equity and/or debt securities. However, we have not entered into any arrangements with respect to such financings, and cannot be certain that we will be able to find such additional financing on reasonable terms, or at all. If we are unable to secure such financing when
needed, we may be unable to expand, respond to competitive pressures, increase and diversify our product offerings, maintain adequate inventory, increase our advertising and marketing, implement our e-commerce strategy and otherwise
implement our business plan. In addition, we may be required to decrease expenses and modify our business plan based upon the cash available to us.
Here is a little more detail about the SEC investigation from the 10Q.
ITEM 1. LEGAL PROCEEDINGS
On July 31st, 2003 we received a subpoena from the Securities and Exchange Commission relating to certain information relating to our common stock and transactions that we have entered. We have been advised that the SEC is
investigating possible violations of the securities laws arising from activity in our common stock but has made no determination as to whether there has been a violation of the law. We have voluntarily provided the SEC with certain materials in connection with this investigation and are aware that certain individuals, including some of our shareholders and executives, have either voluntarily provided materials or have been the subject of subpoenas to provide materials to the SEC. Any action by the SEC against us or our executives could have a material adverse effect on our financial condition or results of
operations.
For the record, I used to hold this stock. I lost a significant portion of my money when I sold. I am still holding about 1% of my initial number of shares. I personally think that this is a bad investment at this time. Once they iron their legal troubles out, show positive cash flow, and show a reduction in administrative expenses, then I might reconsider. A change in management would be nice to.