This excerpt taken from the CYBX 10-K filed Jul 6, 2007.
We generated a net loss of $51.2 million for the year ended April 27, 2007, as compared to a net loss of $59.1 million for the year ended April 28, 2006 and net loss of $18.6 million for the year ended April 29, 2005. The decrease in net loss during fiscal year 2007 as compared to the loss during fiscal 2006 is primarily due to decreases in SG&A expenses in the amount of $37.9 million as a result of lower sales, marketing and related expenses associated with the TRD launch, and $5.6 million reduction in clinical, engineering and regulatory expenses, partially offset by $18.7 million in higher non-cash charges, $4.3 million associated with the resignation of the CEO and CFO, $1.6 million contested proxy cost and $12.0 million in legal and other expenses related to the SEC investigation. As a result, cash used in operations was $20.7 million for the year ended April 27, 2007, as compared to $70.9 million used in operations for the year ended April 28, 2006 and $4.0 million used in operations for the year ended April 29, 2005. To fund operations, we incurred $5.0 million in additional indebtedness in fiscal 2007 through additional borrowings against our line of credit facility.
We believe our current financial and capital resources will be adequate to fund anticipated business activities through fiscal 2008, although there can be no assurance of this as this estimate is based upon a number of assumptions, which may not hold true. Our current assumptions include, consistent with the federal district courts June 2007 decision, the assumption that no default has occurred under the Indenture for our Convertible Notes, which include principal maturity of greater than 24 months. The Trustee has not appealed the district courts decision; however, if the Trustee appeals the district courts decision, and if the court of appeals reverses the district courts decision, then all unpaid principal and accrued interest on the outstanding Convertible Notes will be due and payable immediately, and we may not be able to maintain our operations as a going concern. Our projections of the future TRD markets for VNS Therapy will be significantly impacted by the timing and outcome of pending reimbursement decisions for depression by major payers. Furthermore, our liquidity could be adversely affected by the factors affecting future operating results that are discussed in Item 1A. Risk Factors.