Note 2 - Assessment of Liquidity Risk |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 | |||
| Notes to Financial Statements | |||
| Substantial Doubt about Going Concern [Text Block] |
The Company has experienced declining revenue in fiscal 2016 and 2017 which has impacted its liquidity and cash flows. The Company incurred a net loss of $232 for the fiscal 2016 and a net loss of $7,845 in fiscal 2017. Revenues have declined due to the loss of customers that represented a large concentration of the Company’s business. This decline in revenues directly impacted the Company’s gross profit and its ability to generate positive cash flows from operations.
In light of these events, on May 15,
2
017, the Board of Directors approved a corporate restructuring plan (the “Restructuring Plan”) which included the closure of the Suzhou, China facility and global headcount reductions. These reductions resulted in cost savings, which were partially offset by new hires to the leadership team made during 2017. Management believes the Restructuring Plan has stabilized the operations and delivered cost savings during the last six months of 2017. Concurrent with the Restructuring Plan, the Company also negoti ated a Twelfth Amendment to the PNC Facilities (as defined in Note
5 ), which amended its financial covenant requirement for the quarter ended April 2, 2017 and adjusted the financial covenant requirements for future periods (refer to Note 5 ). As at Decemb er
31, 2017, the Company’s liquidity is comprised of $5,536 in cash on hand and $5,295 of funds available to borrow under the PNC Revolving Credit Facility (as defined in Note 5 ). The Company is in compliance with the financial covenants included in the PNC Facilities as at December 31, 2017. Based on management’s updated forecasted cash flows, the Company anticipates that it will continue to be in compliance with the amended financial covenants in the PNC Facilities for fiscal 2018 and beyond. Management believes that with the completion of the Restructuring Plan and its related cost savings, the revenue growth since the implementation of the Restructuring Plan and the cash available under its PNC Facilities, the Company will be able to satisfy its liquidity needs, for at least but
not limited to, the twelve months from the issuance date of these financial statements. |