Sources inform ''Globes'' that Constellation 3D (Nasdaq: CDDD), which is suffering from a severe cash shortage has laid off 15 employees in a cost-cutting move.
The developer of Fluorescent Multilayer Disc (FMD) and Card (FMC) technologies was supposed to receive a $15 million cash transfusion from Switzerland's TIC Target Invest Consulting LLC, but the money has not arrived.
TIC pledged the investment last November as part of a bonds issues by Constellation 3D. Constellation 3D treasurer Ronen Yaffe says, "We were not scheduled to receive the money in November, but in January. However, there have been technical delays in listing the shares on Nasdaq, plus the Christmas break. Everything has been sorted out and the stock exchange has approved the allocation."
"Globes": So why hasn't the money arrived?
Yaffe: “There was a delay with the investors, but that was merely a technical matter relating to the European banks. They pledged the amount and the money will arrive by the end of the week, or next week.”
Are you sure?
“The made the pledge to US and to Nasdaq, so I think they’ll transfer the money very soon.”
Will the company close if the money does not arrive?
“We hope to receive a grant from the US Department of Defense, which has a program similar to the Office of the Chief Scientist in Israel. They’ll probably provide the support because our system has many defense applications.”
What’s the condition of your cash reserves now?
“I cannot comment on that. We will publish our fourth quarter and 2001 financial reports at the end of the month. We have sufficient money for a few more months.
“These are very difficult times, but there is light at the end of the tunnel. We will get the money soon, and we have several promising products under development that should be ready for market in just over a year from now.
“However, we are cutting back operations to reduce our current expenses, due to the situation. We laid off 15 employees, and now have a staff of 50. We cut salaries substantially – senior executives cut their pay by half. The cuts should keep the company going until the money arrives.”
Published by Israel's Business Arena on 25 March 2002