I had to catch up on all the posts LOL
I agree with much of what has been stated. But all along I have disagreed on blaming Bates for what has happened. Money in these small businesses has been tough to come by for years. If this was 15-20 years ago I could have got a bunch of people together had a meeting and done this turnaround myself. I remember being in a room with accredited investors and raising 3 million in two nights. But back then brokerage firms took small deals public and there was an out. Those private placement 3 million became 16 times that on the IPO the next spring.
Here is why I am not a Bates hater.
This stock has not been around for EONS it came to market just a few years ago. Someone on the outside bought 10% of the company , paid 900k for a promotional mailer and pumped then dumped the stock and took away all credibility and forced a world of pain on this company.
Insiders NEVER SOLD A SHARE! (management)
Bates was forced to respond to all this crazy stuff while trying to run a business.
Despite all this their sales went from
ZERO
800k
1.7 million
2.7 million for the 9 months probably going to do 4 million plus for 2015
What more can you expect from a new product moving into multiple countries with limited capital.
The pump and dump happened so early on no one trusted the situation. I work as a CPA, small business loans and small business capital are one part of this recovery that never returned to normal.
Despite all these things the company now has two factories. Within a few months they had 1,100 completed units built in the Indian subsidiary.
So they have some toxic debt and a dilution problem. that is why it is at .0001. But these problems are not huge.
The mobilemill for which there was a lot of interest is supposed to be being made this quarter as well. And the Argentina project was commissioned after the 9-30 cut off so revenue , a big amount might hit 4th quarter.
While you see a total waste of a CEO, I see that maybe something big was coming, maybe the big numbers finally were coming and at any cost he was going to get to that point, hence the carpy financing. That is what I see.
The outsider led pump and dump and damaged cred is one reason I bought a tiny bit of this stock. Just like it artificially pumped the value to 160 million when there were hardly any sales it pushed it so low the market value is now 220k!!!
I would be really surprised if there were not some last minute effort to fix this on the strength of the company's best year.
I have looked at a ton of these type stocks. NONE had the sales of Windstream. One had a balance sheet that did not even balance. Others were "ideas" or "hope for a product" or "might cure cancer but wait" type things.
There are dozens of people working for this company in the US and in India. They are building a ton of product. Even the CEO comp is low. A big chunk of the expenses in recent years was share compensation expenses (non-cash) that inflated losses.
This has a high chance of failure obviously, but some people here keep posting the same 68% interest rate stuff. To me it just shows me that there is an urgency to get to a certain turning point no matter how they had to do it. I give Bates credit for that and for at least trying to file the 8-ks fairly timely (many others dont even bother when in this condition)
For me, the way out is not only management change and refi (which is a good idea ) but I do not think turnaround is exclusive to having Bates out.At least in my opinion.
There are a few steps we can do to spruce up the DD a bit. I have not been able to talk to anyone with a larger system installed to see how it worked out. And we need to know the status of the 22million purchase order from Jamaica. Last update on that was that it was still there but this was back in July.
It is great tossing these things back and forth here though, lots of good ideas and points made. thanks guys.
