Note 2 - Going Concern and Management's Plan
|12 Months Ended|
Mar. 25, 2017
|Notes to Financial Statements|
|Substantial Doubt about Going Concern [Text Block]||
The Company incurred net losses of
$4.1million in the fiscal years ended
March 25, 2017and
March 26, 2016,respectively. These losses have contributed to an accumulated deficit of
$25.6million as of
March 25, 2017.
The Company has experienced delays in the development of features, orders, and shipments for the new ASG. These delays have significantly contributed to a decrease in working capital from
March 26, 2016,to
March 25, 2017.The new ASG product has now shipped to several customers, but potential delays in the refinement of features, longer than anticipated sales cycles, or the ability to efficiently manufacture the ASG, could significantly contribute to additional future losses and decreases in working capital.
To help fund operations, the Company relies on advances under the line of credit with Bridge Bank. The line of credit which expired on
May 7, 2017,was renewed through
May 6, 2019 (see Note
20,Subsequent Events). The agreement includes a subjective acceleration clause, which allows for amounts due under the facility to become immediately due in the event of a material adverse change in the Company’s business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit based on the lender’s judgement. As of
March 25, 2017,the line of credit had a balance of
$582,000,and additional borrowing capacity of
These matters raise substantial doubt as to the Company’s ability to continue as a going concern.
To address these matters, the Company’s management has taken several actions to provide additional liquidity and reduce costs and expenses going forward. These actions are described in the following paragraphs.
Management will continue to review all aspects of the business in an effort to improve cash flow and reduce costs and expenses, while continuing to invest, to the extent possible, in new product development for future revenue streams.
Management will also continue to seek additional working capital through debt, equity financing or possible product line sales, however there are
noassurances that such financings or sales will be available at all, or on terms acceptable to the Company.
The Company’s historical operating results and forecasting uncertainties indicate that substantial doubt exists related to the Company’s ability to continue as a going concern. Forecasting uncertainties exist with respect to the ASG product line due to the potential longer than anticipated sales
cycles as well as with potential delays in the refinement of certain features, and/or the Company’s ability to efficiently manufacture it in a timely manner.
The accompanying Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern and do
notinclude any adjustments that might result if the Company were unable to do so.
The entire disclosure when substantial doubt is raised about the ability to continue as a going concern. Includes, but is not limited to, principal conditions or events that raised substantial doubt about the ability to continue as a going concern, management's evaluation of the significance of those conditions or events in relation to the ability to meet its obligations, and management's plans that alleviated or are intended to mitigate the conditions or events that raise substantial doubt about the ability to continue as a going concern.
Reference 1: http://www.xbrl.org/2003/role/presentationRef