A Novo Broadband, Inc. Reports Bank Default.Business Editors/Hi-Tech Writers NEW CASTLE, Del.--(BUSINESS WIRE)--Nov. 13, 2002 A Novo Broadband, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ANVB) announced today that Silicon Valley Bank, the Company's principal lender, has notified the Company that as a result of the Company's failure to maintain tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). of at least $7.25 million as of September 30, 2002, the Company is in default of a financial covenant under its senior secured credit facility. The lender has informed the Company that it will grant the Company a forbearance Refraining from doing something that one has a legal right to do. Giving of further time for repayment of an obligation or agreement; not to enforce claim at its due date. A delay in enforcing a legal right. and will not enforce any of its remedies while it transfers the credit facility to its factoring division, where the terms of the lender's advances will be based on a more restrictive formula. The Company does not know what these revised terms will be, but expects them to be materially less favorable to the Company than the current terms of the credit facility. The Company believes that any material limitations on its credit and liquidity arising from the revised financing terms will adversely affect its operations. The Company is seeking additional resources and examining other strategies to enhance its liquidity. It can make no assurances that it will be successful or that its efforts will enable it to continue in business. A Novo has not reported its results for the fourth quarter and fiscal year ended September 30, 2002. Based on unaudited information communicated to the lender under the terms of the credit facility, the Company believes it sustained a significant operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the fourth quarter, including write-offs of goodwill associated with prior acquisitions and inventory. This press release includes statements which constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are identifiable by use of such words as "belief", "expect", "anticipate" or other similar words or phrases that indicate their forward-looking character. Such statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors which could cause or contribute to such differences are detailed in the Company's Securities and Exchange Commission filings, including its most recent Report on Form 10-KSB. |
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