http://biz.yahoo.com/e/051123/ibdi.ob10qsb_a.html
DISCUSSION ON LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2005 we had cash of $467,180 and a working capital deficit of $21,873,649. We currently believe that operating cash flows from our iBill operation, current cash balances and borrowings will be adequate to meet its operating needs and capital requirements for the remainder of 2005. However, we have past due obligations, including but not limited to client payouts of $18,361,221 less processor reserves of $5,328,550, leaving a net deficit of client payouts of $13,032,671. We require additional financing to satisfy past due obligations. Presently, we do not have any material capital expenditure commitments for the remainder of 2005 and 2006.
We have adopted objectives of improving liquidity and sustaining profitability by implementing the following:
o A program of settling debt obligations by issuing interest bearing notes with a 2-year term note; to date the Company has settled approximately $9 million with notes and cash settlements;
o Maintaining service levels for existing clients above expectations to promote recurring and incremental revenues from these clients;
o Development of new payment processing products utilizing a fee-based service model with the potential for additional revenues from selling these programs to the end user;
o Teaming with other product and service providers in the adult entertainment industry in order to develop new revenue streams;
o Providing strategic marketing services to clients;
o Settling remaining outstanding obligations at a discount with payments to be made over time;
o Continued review of all expenditures in order to minimize costs; and
o Raising additional equity capital as necessary. We believe that the results of operations from iBill will improve as we regain lost customers and increase operating efficiencies. However, we must obtain additional financing to facilitate our expansion of the iBill operations. In the absence of financing we may be unable to satisfy past due obligations.