Elcom Receives Short-Term Working Capital Funding
April 28 2005 - 3:00AM
PR Newswire (US)
Elcom Receives Short-Term Working Capital Funding Several Major
Clients Prepay or Accelerate Payment of Licence and other Fees
NORWOOD, Mass., April 28 /PRNewswire-FirstCall/ -- Elcom
International, Inc. (OTC:ELCOOTC:andOTC:AIM:OTC:ELCOTC:andOTC:ELCS)
(BULLETIN BOARD: ELCO and AIM: ELC and ELCS) , today announced that
several of its larger clients have prepaid or agreed to accelerate
the payment of invoices for several months in order to assist the
Company's short-term working capital requirements. The Company
believes that these prepayments and the acceleration of payments of
certain invoice amounts due will enable the Company to operate, at
a minimum, into June 2005, allowing the Company extra time to
finalize its long-term funding. Robert J. Crowell, Elcom's Chairman
and CEO, said, "We have always tried to do our best to keep our
customers' satisfaction as high as possible. Indeed, we have always
believed that our customers and references therefrom, are one of
our greatest assets for the future of Elcom." Mr. Crowell
continued, "Several of our customers have assisted Elcom in its
short-term cash flow requirements enabling Elcom to 'bridge' to its
potential long-term funding. I can state with all sincerity that
nothing is more gratifying than major customers coming to your aid
on their own volition. I believe we are now significantly better
positioned, given overall circumstances, to finalize our strategic
funding and I would like, on behalf of Elcom, to thank the clients
involved." The Company is, as previously announced, a member of the
consortium headed by PA Consulting, which is the preferred bidder
for the U.K.'s Office of Government Commerce's Zanzibar
eMarketplace project. The Company believes the agreement for the
Zanzibar project, while delayed several times, will be awarded
within the next 30 to 45 days; however, there can be no assurance
of the contract being awarded or the date thereof. The earliest the
Zanzibar agreement can be signed is 15 (fifteen) business days
after the announcement of the contract award. This is due to a
waiting period commonly referred to as the Alcatel waiting period.
Liquidity and Capital Resources As previously announced, the
Company required additional financing in the first quarter of 2005
in order to continue to operate. The Company has received bridge
loans from the Chairman and CEO and Vice Chairman and Director
totaling $200,000 through March 31, 2005. The Company is in the
process of discussing the potential of a common stock issuance
(under Regulation S of the Securities and Exchange Commission
Regulations) under its AIM (U.K.) listing. The bridge loans,
together with the short-term working capital assistance announced
herein, are intended to provide the Company with the necessary
funds to operate while the Company continues long-term fundraising
discussions. The Company is currently in discussions with several
parties regarding the raising of additional funds, however there
can be no assurance that the Company will receive any such funding
or, if raised, on what terms or what the timing thereof may be, or
that any amount the Company is able to raise (if any), will be
adequate to support the Company's working capital requirements
until it achieves profitable operations. The Company has been
informed by a U.K. stockbroker that it has received preliminary
indications of interest from investors in an AIM issuance of Elcom
shares. However, the terms and amount thereof are under discussion
and there can be no assurance that this issuance will be
consummated, or on what terms. Any such issuance is expected to
result in substantial dilution to existing shareholders. Further,
it is anticipated that there will be various pre- conditions to the
consummation of such financing, including a requirement that the
funds or commitments would be held in abeyance or escrow and not be
invested in the Company's shares, unless and until the U.K.'s
Office of Government Commerce's Zanzibar agreement is signed
between Elcom and PA Consulting. Some or all of the funds might be
held in abeyance or escrow until after additional common shares are
authorized at the Company's annual stockholders meeting on June 29,
2005. It is the Company's current belief that the Zanzibar contract
will not be awarded until mid to late May. If there is a further
significant delay in the projected contract award of the Zanzibar
project, additional short-term funding will be required during
June. Without such additional funding or further assistance, such
as acceleration of further invoices by a major client, the Company
would likely be forced to curtail operations and seek protection
under bankruptcy laws. About Elcom International, Inc. Elcom
International, Inc. (OTC:ELCOOTC:andOTC:AIM:OTC:ELCOTC:and ELCS)
(BULLETIN BOARD: ELCO and AIM: ELC and ELCS) , operates elcom, inc
("Elcom"), an international B2B Commerce Service Provider offering
affordable solutions for buyers, sellers and commerce communities
to automate many or all of their purchasing processes and conduct
business online. PECOS, Elcom's remotely-hosted flagship solution,
enables enterprises of all sizes to achieve the many benefits of
B2B eCommerce without the burden of infrastructure investment and
ongoing content and system management.
http://www.elcominternational.com/ Company Product Offerings For
detailed information on our PECOS(TM) eMarketplace and eProcurement
and optional Dynamic Trading solutions, please visit our website at
http://www.elcominternational.com/products.htm Statement Under the
Private Securities Litigation Reform Act Except for the historical
information contained herein, the matters discussed in this press
release may include forward-looking statements or information. All
statements, other than statements of historical fact, including,
without limitation, those with respect to the Company's objectives,
plans and strategies set forth herein and those preceded by or that
include the words "believes," "expects," "given," "targets,"
"intends," "anticipates," "plans," "projects", "forecasts" or
similar expressions, are forward-looking statements. Although the
Company believes that such forward-looking statements are
reasonable, it can give no assurance that the Company's
expectations are, or will be, correct. These forward-looking
statements involve a number of risks and uncertainties which could
cause the Company's future results to differ materially from those
anticipated, including: (i) the Company's history of ongoing
operating losses; (ii) the overall marketplace and clients'
acceptance and usage of eCommerce software systems, including
corporate demand therefor, the impact of competitive technologies,
products and pricing, particularly given the substantially larger
size and scale of certain competitors and potential competitors,
control of expenses, revenue generation by the acquisition of new
customers, the acceptance of the eProcurement Scotland program by
public entities, and corporate demand for eProcurement and
eMarketplace solutions; (iii) the consequent results of operations
given the aforementioned factors; (iv) the awarding and/or timing
thereof of the Zanzibar contract to PA Consulting with the Company
as subcontractor thereto; and (v) the requirement for the Company
to raise additional working capital to fund operations in June 2005
and the availability and terms of any such funding to the Company.
Without any such funding, the Company will have no option but to
seek protection under bankruptcy laws. Other risks are detailed
from time to time in the Company's Quarterly Reports on Form 10-QSB
for the quarterly periods ended March 31, June 30, and September
30, 2004, as well as the Company's 2004 annual report on Form
10-KSB, and in its other SEC reports and statements. The Company
assumes no obligation to update any of the information contained or
referenced in this press release. DATASOURCE: Elcom International,
Inc. CONTACT: Investor Relations of Elcom International, Inc., Web
site: http://www.elcom.com/
Copyright