It has enough cash, $7.1 million, to continue operating without additional funding if sales meet its new projections, it said.
Jones is slashing expenses again [image-nocss] this quarter, after cutting its work force in half, to about 60 employees, over the past year, said the report. Many of those who lost jobs were hired in early 2008 to help market the national rollout of Jones cans, a project on which the company had stumbled in 2007 after years as a successful niche player. The new plan was to blitz markets already familiar with Jones products.
"In the end, the costs were too high to build the business," CFO Michael O'Brien told the newspaper. "It would have required even more money."
Jones decided to make the going-concern statement after consulting its auditors, he said. "We believe we have a sound operating structure moving forward, including enough cash to operate our business; however, it is dependent upon the company's revenue levels."
O'Brien declined to disclose the new sales projections to the paper.
Last week, Jones posted a net loss of $2 million for the second quarter, an improvement of 28% from the same quarter a year ago. Its revenue decreased 36% to $7.5 million.
In Monday's filing, the company said it is difficult to forecast demand for its products. Jones does not think more meaningful cost cuts are possible and has doubts about its ability to raise more debt or equity if that becomes necessary, the filing said.
Last November, Key Bank terminated Jones' $15 million line of credit, said the report; the company has not found borrowing alternatives with acceptable terms.
O'Brien told the Times that Jones has received several offers for financing, but has not acted on them, also because the terms were unacceptable. "They're still an option for the company," he said. "If we get to the point where we need the financing, we have had several options presented to us."
In the filing, Jones said it could pursue joint ventures and strategic partnerships, as well as debt and equity offerings.
Click hereto read the complete filing.
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