Q2
Items of interest from the 10-Q
1. SUNworks second quarter results were as follows (does not include any Solar 3d expenses):
Sales - $7,456,656
CGS - $5,438,473
Gross Profit - $2,018,183
Op Ex - $863,737
Net Profit - $1,147,860
2. Nice cash balance over $1.2M and shareholder deficit of almost ($800k) is well down from Dec 31st and should easily be in the positive by year end.
3. Cash flow from operations was $341,862 for the first six months, so the core business is cash flow positive. Companies can "tweak" this right before the end of the quarter by not paying bills and getting aggressive on collections, so we will need to see the next couple quarters to see the trend. I don't see any manipulation that is obvious for this quarter.
4. I noticed some contradictory language in the 10-Q. Section 1 of the notes "Basis of presentation" reads "The company does not generate significant revenue, and has negative cash flows from operations, which raises substantial doubt about the company's ability to continue as a going concern." However, section 2 "Summary of significant accounting policies", "Development stage activities and operations" reads "The Company has significant revenues, thereby eliminating the development stage as of December 31, 2013." And the financial statement of cash flows show positive cash flow from operations. They need to clean up the going concern statement.
5. I also don't think the statement of the need for a cash infusion is needed any more as first, Solar 3d is operationally cash flow positive even with the cell development costs included and second, there have been no convertible notes issued since the acquisition.
6. There was not a lot of dilution in Q2. The next two quarters should see the bulk of dilution from the acquisition hit the balance sheet. With no new notes being issued, once the dilution hits, it should be the end of it other than stock options and grants to employees and officers.
Let's get this cell into production!
