Coda Octopus Group Inc (CODA)

[multivalue]

Can anyone shed light on this paragraph from the report. Esp. the last sentence?

Since February 21, 2008 our Balance Sheet also includes a $12 million convertible secured debt (“Debt”)
in favor of Greenhouse Investments Limited (now assigned to Solidor Investments Limited). Under the
terms of the Secured Loan Agreement relating to the Debt, the Company has an obligation to pay
coupon of 8.5%, payable bi-annually. A primary focus of our restructuring has been to rehabilitate our
income statement in such a way as to reach a level where the annual coupon obligations associated with
this Debt are serviceable. Current revenues and costs levels of the Group are in keeping with the 8
obligations of servicing this Debt. As of April 30, 2012, the principal Debt amount plus accrued and
unpaid interest amounted to $15,363,643.
With this level of debt, the failure to maintain our SG&A costs at around $6 million per annum and
achieve revenues in excess of $16m per annum would threaten our ability to sustain our profitability
going forward.