KEY NOTES TO 10Q - $MTVX - EXCELLENT NUMBERS >> READ
What we want to see with an issuer like $MTVX is evidence of debt restructuring or recapitalization. Is $MTVX doing that or not? They certainly are and have accomplished some significant milestones during the second quarter of 2014. As long as the Company continues to focus on flipping its balance sheet to the positive side by generating revenues and cash flow, the future of this company is BRIGHT. What we do not see--and we knew beforehand--are the revenues (orders) received during this quarter (3Q)hence as time moves to the right on the x axis, we can expect to see some excellent revenue numbers, too.
Key milestones evidenced from the 10Q are as follows:
1. Reduction of short term debt: $1,079,363
2. Reduction of long term debt: $3,723,227
3. Increase in additional paid in capital: $2,688,995
4. Cash flow positive
The GSA for the quarter includes expenses for issuance of shares for professional fees associated with financing and consulting activities which are stated at fair market value of share price at the time of share issuance. Also included in the GSA are interest expenses related to share issuance for settlement of trade payables (i.e. 3(a)(10)issuance). These are extra-ordinary expenses for 2014 and should be noted as such. The P/L for GSA is currently skewed due to merger/restructuring charges that have and will occur in 2014.
What is not included in the GSA are share issuances to Ironridge because these are contigencies that must be evaluated from time to time and will be adjusted at the conclusion of the calculation period. Ironridge debt settlement are to be adjusted against interest expense and such can be a positive or a negative adjustment to the P/L.
The increase in additional paid in capital is a result of shares issued. It is the fair market value of total shares issued for each short term note minus the total cost marked at par. $MTVX is able to successfully restructure its debt and recapitalize the company because the par value of the common stock is 0.00001.
As the Cerner deal comes to a completion, we can expect a reduction in long term liability to ~$11 million this year which will take down the long term assets stated in the balance sheet.
In my estimation, $MTVX should be adding at least $5 million in revenues for the remaining part of 2014 because their business model is currently seasonal with the bulk of sales occurring during the second part of the year. With the roll-out of other product lines together with regular sales of the mini-bikes, it is quite possible for MTVX to have a quarterly turn-over of $4 million next year which would allow them to have levered cash to extinguish almost all of its mature debt (long term) by 2015. Based on this achievable turn-over, equity financing could become minimal in 2015.
Overall, the 10Q is excellent.
Very good job, MTVX.
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