Genisco Technology Corp, La Mirada (where?), California seems to be in more trouble: the company says that IBM has notified it of the termination for default of its contract for the development and production of Genisco’s ECR-42 recorder: Genisco is disputing the default termination and negotiating the matter with IBM – it says it has already spent about $4m more than the $3.7m it received from IBM on the contract, and that in the quarter to June 30, it reversed prior revenue of about $700,000 and provided for reserves for losses of about $1.1m against the contract – and reckons thereby that it is adequately reserved for this contract, apart from the impact of the termination (they do talk funny in La Mirada); while there could be additional costs resulting from a termination for default, we believe that we will be able to negotiate a conversion of the termination to one for convenience; if that effort is successful, the resulting recovery of Genisco’s costs would have a significant positive financial impact.
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