LUV - in the interest of fairness and objectivity, can you give us some concrete and measurable statistics as to where the company will be short term (10Q coming out next week) and longer term (by the end of the year)? Specifically, I am looking for your outlook on share price, gross sales, debt, share structure, etc. As a starting point, lets set the benchmark as to where we are at today:
Benchmark
Share Price = $0.0151/share (May 15)
Outstanding shares = 21.8 million (April 14)
4th Quarterly Sales = $20k
Gross Margin after cost of goods = $4k (or about 20% gross margin)
Assets = $0.6 million (Dec 31 - cash, inventory, prepaids, equipment)
Annual Operating Expenses = $3.3 million (or average $0.8 million per quarter)
Annual Interest expense = $0.6 million (or average $155k per quarter)
Working Capital deficit = $3.6 million (Dec 31)
46 Convertible notes = $1.0 million (Dec 31)
Company shares repurchased = 0 (Dec 31)
For the short term forecast, I have inserted what I believe to be the expected high/low range - I am looking to see if you concur, or have your own forecast:
Short term Forecast
Share Price = Low of $0.0075/share, High of $0.03 (between now and May 31)
Outstanding shares = Low of 30 million / High of 50 million (1st quarter 10Q)
1st Quarterly Sales = Low of $20k (flat to 4Q), High of $40k (double)
Gross Margin after cost of goods = $4k to $8k (20% gross margin to remain flat)
Assets = Hi/Low of $0.6 million (I do not expect any meaningful change)
Quarterly Operating Expenses = Low $1.0 million to a High of $1.5 million for the quarter (expected to be slightly higher based on NY Toy Fair and HEB launch)
Quarterly Interest expense = Low/High of $160k (I expect this to be flat - an increase is expected due to further new debt created partially offset by better financing promised by the $500k infusion)
Working Capital deficit = Low of $4.0 million/ High of $4.5 million (attributed to ongoing cash drain to fund operations)
Convertible notes = Low of $0.6 million to a high of $1.0 million (anything in this lower range would be outstanding and a proper use of the promised $500k infusion)
Company shares repurchased = Low/High of 0 (the company would be foolish to attempt this at this time)
Longer term (end of year) Forecast
Share Price = Low of Delisted/Grey, High of $0.10 (between now and Dec 31)
Outstanding shares = Low of 50 million / High of 200 million (4th quarter)
Annual Sales = Low of $40k, High of $160k
Gross Margin after cost of goods = $8k to $32k (20% gross margin to remain flat)
Assets = Hi/Low of $0.6 million (I do not expect any meaningful change)
Annual Operating Expenses = Low $3.5 million to a High of $5.0 million for the year
Yearly Interest expense = Low/High of $0.7 million
Working Capital deficit = Low of $5.0 million/ High of $6.0 million (attributed to ongoing cash drain to fund operations)
Convertible notes = Low of $1.0 million to a high of $2.0 million
Company shares repurchased = Low/High of 0
Please let me know your thoughts.
