From the quarterly report:
For the six months ended June 30, 2004, the Company had a net loss of $(1,962,797) and net income of $ 6,357 for the same period in 2003. For the six months ended June 30, 2004 the Company had negative cash flows from operations of $763,799 ( and positive cash flows from operations of $ 6,584 for the same period in 2003). In addition to the revenues provided by the normal operations of the electronic ignition product line, the Company has been dependent on additional capital contributions from shareholders and debt financing to fund its cash requirements.
As of June 30, 2004 the Company's cash reserves totaled $29,656. The Company has temporarily discontinued production and sales efforts as well as further research and development. During the next quarter the Company expects to decide on the future of production and research and development. . This decision could significantly impact demand for the Company's products.
To assist with funding its operations, the Company's majority stockholders contributed additional paid-in capital of $236,688 and additional loans of $ 197,289 during the six months ended June 30, 2004. During 2004 and beyond the Company will require additional capital. Although the current majority stockholders of the Company have made a verbal commitment, with no guarantee, to continue to fund the research and development and sales and marketing efforts of the Company in 2004 if alternate financing cannot be obtained, there can be no assurance that any new capital would be available to the Company or that adequate funds for the Company's operations, whether from the Company's revenues, financial markets, or other arrangements will be available when needed or on terms satisfactory to the Company. The failure of the Company to obtain adequate additional financing may require the Company to delay, curtail or scale back some or all of its research and development programs, sales and marketing efforts, and manufacturing operations.
