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Management Plans -Capital Resources
9 Months Ended
Sep. 30, 2012
Organization, Consolidation and Presentation Of Financial Statements [Abstract]  
Additional Financial Information Disclosure [Text Block]

Note 8. Management Plans – Capital Resources

 

The Company reported operating income and net income for the nine months ended September 30, 2012 compared to an operating loss and net loss for the nine months ended September 30, 2011. A portion of this improvement in 2012 came from recording a reduction of $480,000 in obligations previously accrued and reflected related to excise taxes, including late fees and interest, on unfunded O&W Plan contributions.

 

The Company's primary source of liquidity is cash provided by collections of accounts receivable and its factoring line of credit. At September 30, 2012, the Company had approximately $180,000 of availability under this line. During the nine months ended September 30, 2012, the Company financed its business activities through sales with recourse of its accounts receivable and a capital lease. The Company has demand notes payable of $169,000 at September 30, 2012, that have not been called. The Company has notes payable of $265,000 and $175,000 which mature on January 1, 2013. In the fourth quarter of 2012, the Company plans to renegotiate the terms of these notes payable, included in current liabilities at September 30, 2012, or seek funds to repay these notes payable.

 

The Company believes the capital resources available under its factoring line of credit, cash from additional related party loans and cash generated by improving the results of its operations provide sources to fund its ongoing operations and to support the internal growth the Company expects to achieve for at least the next 12 months. However, if the Company does not continue to improve the results of its operations in future periods, the Company expects that additional working capital will be required to fund its business. Although the Company has no assurances, the Company believes that related parties, who have previously provided working capital, will continue to provide working capital loans on similar terms, as in the past, as may be necessary to fund its on-going operations for at least the next 12 months.