Photo booth and internet kiosk operator Photo-Me Australia (ASX:PTO) has revealed it is in talks to negotiate a substantial reduction to its operating costs.
The company had a net negative operating cashflow of $325,000 in Q2, and had cash at the end of the quarter of $36,000.
Responding to an ASX query over whether the company has enough cash to fund ongoing operations, Photo-Me disclosed that it should very shortly conclude a formal agreement to reduce its overheads by around $600,000 per year.
It is also in talks to increase its existing credit facilities, the company said in a letter attributed to managing director Vince Accardi.
Accardi said these two measures are expected to provide the company with the necessary operational funding.
Photo-Me in June last year proposed and was cleared to convert nearly $1 million in debt into shares issued to its creditors.
The company reported a net loss of just over $1 million in FY10, its annual report shows. Revenue grew to $3.1 million from $2.9 million.
PTO shares were flat on Friday at $0.002. The shares last moved on 17 December, when they fell from $0.003.