Pinnacle Cites Struggles
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IRVINE — Pinnacle Micro Inc. said Tuesday that although it recently raised $10 million through an offshore sale of convertible notes, the company remains on unsure financial footing.
The company said it is negotiating with several lenders for a new credit line, “which if not finalized could constrain growth.” The company added that product releases could be delayed because of its financial troubles.
Pinnacle has struggled to build markets for its optical disk drives, which have technological advantages over traditional magnetic drives, but generally cost more. In recent months, the company has laid off 15% of its 190 workers, witnessed the resignation of its founder and longtime chairman, and defaulted on a $5-million line of credit with Bank of America.
The company, which used a portion of the proceeds from its note sale to repay Bank of America, reported a loss of $3.9 million on sales of $12.3 million in the second quarter.
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