Note 2 - Going Concern and Management's Plan
|9 Months Ended
Dec. 27, 2014
|Going Concern Disclosure [Abstract]
|Going Concern Disclosure [Text Block]
(2) Going Concern and Management’s Plan
The Company incurred a net loss of $283,000 for the first nine months of fiscal 2015 and $3,742,000 for the fiscal year ended March 29, 2014. These losses contributed to an accumulated deficit of $18.5 million as of December 27, 2014.
In the first nine months of fiscal 2015 and all of fiscal 2014 the Company invested heavily in the development of a new Giga-tronics Division product platform, the Advanced Signal Generation System. The Company anticipates long-term revenue growth and improved gross margins from the new product platform, but the delay in completing it contributed significantly to the losses of the Company. The Advanced Signal Generation System's initial customer deliveries occurred in the second and third quarters of fiscal 2015, and are approaching final customer acceptance. Additional delays in shipping volume quantities, or longer than anticipated sales cycles, could significantly contribute to additional losses.
To help fund operations, the Company relies on advances under the line of credit with Silicon Valley Bank. However the Bank may terminate or suspend advances under the line of credit if the Bank determines there has been a material adverse change in the Company’s general affairs, financial forecasts or general ability to repay. (Note 13, Line of Credit). As of December 27, 2014, borrowings under the line of credit were $1.6 million.
These matters, along with recurring losses in prior years, raise substantial doubt as to the ability of the Company to continue as a going concern.
To address this matter, 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, but there are no assurances that such financings or sales will be available at all, or on terms acceptable to the Company.
The current year to date loss and the impacts of recurring losses in prior years have had a significant negative impact on the financial condition of the Company and raise substantial doubt about the Company’s ability to continue as a going concern. The Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments that might result if the Company were unable to do so.