Good afternoon, Cashbyers,
I'll take a stab at answering your questions.
1. Regarding convertible debt, take a look at Note 7 to the financial statements as presented in the 10K which is available via the very website we're both on right now. This is around Page 55 or 56 of the document, and you'll find that VHUB has convertible debt of 931K payable to Iliad and TCA Global. A lesser number is shown on the balance sheet, because some of that 931K has been moved into the Derivative Liabilities caption which is explained in the notes to the financials, but nonetheless is way beyond my pay grade to understand.
2. Given that the debt is classifiable as a current liability, that will explain why the ratio of current assets to current liabilities is less than the familiar benchmark of 2:1, and in fact is less than 1:1.
3. The company had a positive net income FROM OPERATIONS in the fourth quarter of its fiscal year, so any current losses would be attributable to the debt structure as interest is a non-operating item.
4. Management announced in May 2015, if I'm remembering correctly, that they're trying to refinance short term debt into some better mixture of long term debt and common equity. But they haven't furnished any reporting as to any progress they have been making, at least as far as I can remember.
5. Let's work together through your accounts payable question. Cost of good sold through nine months per the 10Q was 2,530K. Cost of good sold for the full year per the 10K was 3,550K, so cost of goods sold for the fourth quarter of the last fiscal year was 1,020K. Let's annualize that, so a full year's cost of good sold at the fourth quarter sales volume would be 4,080K. 828K in payables at June 30 would be about a fifth of a year's worth of purchases, so that gives us roughly a 2 1/2 month cycle to pay their invoices. Generally, we'd prefer to see maybe a month and a half at most, which means that they really have deferred borrowing via convertible notes maybe another 160K as contrasted to using their suppliers as "the bank." ...meaning that you've made a good catch here in terms of financial analysis.
Overall, there's a BobKS posting today which resembles one of my recent postings in that we both believe that the stock would likely respond very favorably to the company being able to turn a bunch of their short-term debt into some mix of long term debt and common equity. I would add that refinancing should be doable, given how sales have been soaring and that the company has been addressing the issue of FDA regulations by being aggressive in entering foreign markets.
I've probably given you much more than the "high level analysis" you asked for, but I hope that this post has nevertheless worth your time to read it.
AI
