Remote Dynamics Inc (RMTD)

[Pick _M_Low]

This is interesting:

Our REDIview product line forms the basis of our current business plan. We expect this product line to provide the foundation for a growth in revenues and, if our revenues grow as we anticipate, ultimately profitability. We do not expect to achieve profitability or positive cash flow for 2009. Our plans for 2009 include growing our subscriber base through direct sales to new and existing customers and continuing to control our operating costs. However, there can be no assurance that we will achieve our sales targets for 2009. Failure to do so may have a material adverse effect on our business, financial condition and results of operations. Moreover, despite actions to increase revenue, control operating costs, and to improve profitability and cash flow, our operating losses will continue through 2009 and net operating cash outflows will continue through the second quarter of 2009.

We are not in compliance with certain of our obligations relating to our secured convertible notes. Our failure to comply with our obligations relating to these securities exposes us to demands for immediate repayment (in some cases, at a premium to outstanding principal) as well as default interest and liquidated damages claims by the security holders.

We have obtained the agreement of certain of our note holders to extend the payment schedule and maturity date of the notes and have resumed making payments to certain of our note holders of amounts due under the notes in the form of our common stock. We plan to continue to explore alternatives to restructure or otherwise satisfy our obligations to our note holders. However, we do not currently have the cash on hand to repay amounts due under our secured convertible notes if the note holders elect to exercise their repayment or other remedies. If our efforts to restructure or otherwise satisfy our obligations under the notes are unsuccessful, and we are unable to raise enough money to cover the amounts payable under the notes, we may be forced to restructure, file for bankruptcy, sell assets or cease operations.

We had a working capital deficit of $3.4 million, excluding the outstanding amount of our secured convertible notes of $10.8 million, as of December 31, 2008. We believe that we will have sufficient capital to fund our ongoing operations through 2009, assuming that we are able to meet our sales targets and to negotiate acceptable payment arrangements with our senior security holders, vendors and other creditors. The sufficiency of our cash resources depends to a certain extent on general economic, financial, competitive or other factors beyond our control. We do not currently have any arrangements for additional financing and we may not be able to secure additional debt or equity financing on terms acceptable to us, or at all, at the time when we need such financing. Furthermore, our ability to secure certain types of additional financings is restricted under the terms of our existing financing arrangements. There can be no assurance that we will be able to consummate a transaction for additional capital prior to substantially depleting our available cash reserves, and our failure to do so may force us to restructure, file for bankruptcy, sell assets or cease operations.

http://secwatch.com/filings/view.jsp?formid=2069677