Continued Operating Losses & Lack of Operating History.
We incurred $198,058 in net losses during the year ending December 31, 2008 and we anticipate that we will incur significant additional losses in the future as well. We do not have any significant revenue-producing operations and we continue to incur costs and expenses for the Serbian Joint Venture, administrative costs, and other expenses. Further, because we are entering a new business, we lack a substantial operating history on which to base our anticipated expense and revenues.
Current Financial Structure, Limited Equity, Limited Working Capital & Need for Additional Financing.
While we believe hat our financial policies have been prudent, we anticipate will need to raise approximately $2,200,000 in additional capital to meet its operating, marketing, and working capital needs. We have, as of December 31, 2008, an aggregate of $151,368 in outstanding debt. We anticipate that we will, over the next twelve months, seek to raise at least $5,000,000 in additional capital for working capital needs however, we have not determined how we will do so or the likelihood of any efforts to obtain any additional capital. We have had only limited discussions with potential investors and it does not anticipate receiving any assurances that we will obtain any such additional capital. We have not received any assurances from any investor that they will invest any funds into the Company and we have not sought to receive and we have not received any commitments or assurances from any underwriter, investment banker, venture capital fund, or other individual or institutional investor for the $5,000,000 in funds that we need for working capital.
Key Man Insurance & No Full-Time Management.
We have no present plans to obtain key man life insurance on the life of Peter Gilcud or Jesse M. De Castro and it is unlikely that we will obtain any such insurance in the future. In the event that either of them are unable to perform their duties, our business may be adversely impacted. Both Mr. Gilcud and Mr. De Castro have other full-time employment and are only able to devote a limited amount of time to the Company's affairs. As a result, the management of the Company is limited and they are not able to devote the time and attention to evaluating matters that may have a significant impact on the Company. If we grow, we will need to hire additional management and our ability to employ suitable management at an acceptable cost, in light of our limited financial resources, can not be assured.
Potential Dilution.
Funding of our proposed business plan is likely to result in substantial and on-going dilution of our existing stockholders. While there can be no guarantee that we will be successful in raising additional capital, if we are successful in obtaining any additional capital, existing stockholders may incur substantial dilution.
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