Troubled body armour maker Pacific Safety Products Inc. (TSX-V:PSP) has received a contract worth nearly half a million dollars from the Department of National Defence.
Pacific Safety Products makes body armour similar to what this soldier, working in Afghanistan, is wearing. (Photo courtesy DND)
The soft-armour maker, which has been under a forebearance agreement for months, won the nearly $500,000 contract last week for "protective products" through a competitive tender. It will deliver to DND within six months. There are two contract amendments available during the next two years.
"This award confirms that PSP remains the trusted supplier to the Canadian military of protective armour solutions for soldiers," stated PSP chief executive Doug Lucky.
PSP's forebearance with a large Canadian bank has been extended again to Aug. 31. As such, the company said it's now exploring financing alternatives, including using $2.5 million in cash once it's released from escrow in June.
PSP's Q3 net losses increased to $140,687, or 0.2 cents per share, from $87,378 or 0.3 cents per share a year earlier. PSP stated the increased losses were mainly due to gross margin reduction and increased debenture interest expense.
The company fell upon hard times after moving to Ottawa to keep an eye on the competition.