Question-and-Answer Session
Unidentified Participant
(inaudible).
Andrew Sculley
The issue with expanding capacity is, we’re looking at a machine that has better tolerances, has much better yield improvement. You’re right that is the day – day one it goes in, we’re going to have startup difficulties. So I agree with that. On the other hand, we feel we know how to do it. It’s a – the machine we’re thinking about is not an R&D machine. It’s a production machine. The company has had enough experience in it. So if we do it right and fill it to a reasonable utilization, we’ll get better. And we actually have done the models [ph]. Yes, sir, in the back.
Unidentified Participant
(inaudible).
Andrew Sculley
Yes, I have to repeat the question. Sorry, I didn’t do the first one. Do we have any military folks on our Board of Directors? Yes, we have a retired admiral. Admiral Paulsen is our Chairman. We have a retired general. General Steve Seay is on our Board. If you look at the sales cycle of military, what you will see is they will ask you for samples or prototypes if it’s a joint development effort. That will be normally one year. The next year they are going to be putting prototypes equipment out, and the year after that is adoption. So it’s a relatively long cycle that can be squeezed up depending upon whether we’re doing R&D to come up with a new product or not. Yes, sir.
Unidentified Participant
I was hoping you could expand a little bit on how you restructure your debt and also (inaudible)?
Andrew Sculley
Okay. The question was, how do we restructure the debt. And what was the second part?
Unidentified Participant
Well, I just want to get an idea of (inaudible).
Andrew Sculley
Right. When are we going to turn networking capital positive? Right? The equity event that we had in December, we sold preferred stock at $0.75 per share valuation. We sold approximately $4 million of preferred stock. The debt was $6 million. We had $2 million of it converted into preferred stock and the other $4 million we paid off with the proceeds of the offering. So, a total of $6 million now in preferred stock. As far as the positive networking capital, we will be there. If you look at our final 2008 numbers, you will see that in ’09 I think it will turn positive.
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