Even so, in its third-quarter financial statement USAT said it has "sufficient cash resources" to carry it for the next 12 months, even if cash flow from operations is negative. The firm added, moreover, that "although the company has not generated revenues from operations, management anticipates that material cash flow from operations will occur" this quarter and the first quarter of 1993.
Which brings us back to the alcohol-testing line, USAT's supposed bread and butter: How viable a business is it?
The disposable retail product, Final Call, was endorsed by the National Troopers Coalition in February as a way for drinking drivers to make "an informed decision" about whether they've had one too many. But such do-it-yourself analyzers are controversial because of worries about their accuracy and the drinking driver's personal interpretation of the test.
If USAT has scored a sales hit with Final Call, it hasn't said so.
In any case, with the new transportation-worker testing proposal, USAT investors are likely to be far more intrigued with the professional line of alcohol analyzers.
In a brief interview earlier last week, USAT's Witham said the company has "positioned ourselves to come into play" when demand for analyzers rises under the transportation testing program.
But some industry experts say USAT's professional analyzer, while approved by the Department of Transportation, is a gas-based technology too cumbersome for field use--where truckers and others would most likely be tested.
Richard Guth, president of Harrisburg, Pa.-based Guth Labs, which makes instruments that test alcohol analyzers for accuracy, contends that even now USAT's products aren't well-accepted. "We don't even know they're there," Guth said.
The field is dominated, he said, by three bigger companies: Datamaster of Mansfield, Ohio; CMI Inc. of Owensboro, Ky.; and Intoximeter of St. Louis.
Of course, that doesn't necessarily preclude USAT from taking a chunk of any new business. Yet Glenn Forrester, whose family owns Intoximeter, figures the entire U.S. market for breath analyzers now is just $15 million a year in sales. At best, once the transportation program begins, the market could grow to $50 million a year, he said--not exactly huge.
So far, USAT has been nothing if not well-financed, and it's clearly burning a lot of cash on something: The firm's selling, general and administrative costs zoomed to $2.4 million in the most recent six months, up from $687,905 a year earlier; research costs rose to $361,020 from $17,550.
The question is whether any payoff from those outlays will come soon. On that count, investors who snapped up the shares last week appear to have made a giant leap of faith.
U.S. Alcohol's Wild Ride Shares of Rancho Cucamonga-based U.S. Alcohol Testing have jumped in recent days in heavy trading on the American Stock Exchange, after hovering around $1 for much of November. Dec. 11 $2.88