FMNL Capital Resources
The Company's capital resources are comprised primarily of financial institutions and private investors (including members of management) who are either existing contacts of the Company's management, or who came to the attention of the Company through brokers, financial institutions and other intermediaries.
For the year ended September 30, 2011, cash flow used in operations decreased $774,973 or 97% to $22,561 due to an corporate restructurings, dispositions of assets, and cost cutting measures, compared to cash flows used in operating activities of $797,534 for the year ended September 30, 2010 and cash flows used in operating activities of $672,440 for the year ended September 30, 2009.
Financing the work on the vessel to date had been from operations, a credit facility from Caterpillar Financial Services, and funds raised. The credit facility with Caterpillar Financial Services Corporation was created in September of 2005 for $3.0 million USD. This credit facility was subsequently increased to a total of $4.3 million USD in spring of 2007. The construction loan has been converted to a 5 year term loan facility of $5 million USD
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with an interest rate of 7%. The Company incurred additional capital expenditures of $410,872 in the fiscal year ending September 30, 2010, and $Nil in fiscal year ending September 30, 2011. The Company does not currently hedge against foreign exchange or interest rate fluctuations.
The Company estimates that its cash and cash equivalents will not be sufficient to meet its capital requirements given its current business structure in the next year. However, its forecast of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. If the Company is unable to raise additional capital when required or on acceptable terms, it may have to liquidate, delay, and or scale back on some planned initiatives.
The Company's access to capital is always dependent upon general financial market conditions. Because of the nature of the Company's business, there are no trends in the nature of its capital resources that could be considered predictable. To date, the Company's capital resources have consisted of the private issuance of common shares, convertible securities and a credit facility from Caterpillar Financial Services Corporation.
