McS....Currently I hold a neutral sentiment about our financial relationship with the DLA after 12/15. Although the quote you copied might represent fair warning to anybody looking to invest, I accept it as a CYA comment since the government contributes about 50% of the company's revenues. Any singular customer that is that top-heavy for any company's total sales should automatically be acknowledged similarly in the Risk Factors section of a prospectus IMO.
Having written this, I recognize that the financial deal with the DLA has substantially changed and indeed it might be negative when we are eventually told the details. However, this is a deal where two parties have agreed upon a set of principles and I remain confident that management has negotiated an acceptable arrangement. I fully expect that the amount of $$$ paid by the DLA will be less per unit sale, but at the same time I would imagine that the company should benefit more on greater volume. On balance this means that I am optimistic that total sales will ramp up in the future with the DLA in future years.
Sometime before or soon after 12/15 I would hope that the critical parts of the new deal with the DLA will be disclosed. If they aren't, how can management support its stock value when the financial relationship with the company's largest customer remains a secret? How can management encourage potential institutional investors to buy into the secondary offering? This cannot be. Therefore, assuming that the details will become known and also assuming that the company has cut a good deal for itself with the DLA, this should be a boost for its stock.
As with all the other recent posts I have written, all the foregoing is speculative. I am simply thinking about unknown issues that face us currently and sharing these thoughts. GLTY.
