The filing is related to TXP's iPhotonics unit, which was sort of acquired from Siemens AG (NYSE: SI; Frankfurt: SIE). That iPhotonics part of TXP develops and markets a family of BPON and GPON optical network terminal (ONT) products to Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) and other firms. From the filing (bolding is mine):
The Company urgently needs to raise additional financing to fund its operations. The cash required to operate the iPhotonics business unit, which was formed in the fourth quarter of 2006, is significant. The formation of the iPhotonics business unit resulted in TXP adding 35 full-time employees and amending its lease in November of 2006 to expand the operating facility by 16,000 square feet.
In April of 2008 we reduced headcount and made other changes to our iPhotonics business unit to reduce costs. Going forward, incremental personnel cost and lease payments are expected to average approximately $200,000 and $8,000, respectively, per month. Other research and development and operational costs are expected to average just under $120,000 per month for the next twelve months. Revenues to date related to the iPhotonics' business unit have been insignificant relative to the related expenditures which, coupled with lower than expected revenues from our other operating units, continues to place significant strain on our cash and liquidity position.
To continue to operate under our current business model of which our iPhotonics business unit is integral and material, we will urgently need to raise additional funds by late November, 2008. To obtain funds to continue our operations, we may utilize any of several potential options, including the issuance of debt or equity securities, the exercise of warrants issued to investors in conjunction with previous private offerings, and other arrangements with strategic partners. No assurance can be given that we will be able to obtain financing on favorable terms, if at all.
If we are unable to obtain additional financing when needed, we could be required to modify our business plan including selling the iPhotonics business unit assets or shutting down its operations, or cease our operations altogether, depending on the extent of available financing. Our ability to continue as a going concern depends upon our ability to raise substantial funds for use in our operating plan and activities especially related to our iPhotonics business unit.
That doesn't sound too cheery, given how tough it is to raise money right now. TXP, which took in more than $10 million in revenues in 2007, now sports a market cap of about $21 million and its shares have fallen in value by about 70 percent in the past 12 months.
And "late November, 2008," the deadline mentioned in the filing, has already come and gone with no further announcements coming from TXP.
— Phil Harvey, Editor, Light Reading