Zila might file Chapter 11 after cutting costs
Source: MSN Money Zila Inc.’s worsening financial situation might force the company to file for Chapter 11 bankruptcy, despite a number of cost-saving measures, according to financial statements filed March 17. Despite cost-reduction strategies, the company’s revenue and cash continue to decline, according to its quarterly filing with the U.S. Securities and Exchange Commission. Scottsdale-based Zila’s cash and cash equivalents dropped to $2.5 million as of Jan. 31, compared with $3.2 million on Oct. 31 and $4.5 million on July 31. “In order to continue as a going concern and fund our current level of operations over the next 12 months, we will require additional funds and need to restructure our senior secured convertible notes,” the company stated in its filing. Company officials question whether Zila (Nasdaq: ZILA) has sufficient cash available to pay future quarterly interest payments due under those notes. Chapter 11 would allow the company to restructure its debts while continuing operations. For the six months ended Jan. 31, Zila reported a net loss of $28 million on $18.2 million in revenue. That compares with a $9.6 million net loss on revenue of $21 million during the same period in 2008. The oral cancer diagnostic company’s stock closed Wednesday at 14 cents a share, close to its 52-week low of 13 cents a share. Its 52-week high is $3.57. Last year, Nasdaq warned Zila that its stock was in danger of being delisted if it didn’t keep its price over $1 per share for 10 consecutive business [...]