Good Morning - HLEG 10Q watch. WHY?...
From April 06 SEC filing!
During 2005 our operations consumed $493,099 in cash. However, our operations in the first half of 2005 consumed $951,624 in cash, while operations in the second half of 2005 produced $458,525 in cash. The improved cash flow in the second half of the year resulted from the fact that we obtained full managerial control over the six new dance clubs in that quarter. Although we contracted to acquire the clubs at the end of March, our relationship with the prior owners resulted in a litigation that was not resolved until late in July 2005. The dispute drained our cash resources and prevented us from taking full advantage of the cash flow from the clubs until August 2005.
Now that we have undisputed control over the new dance clubs, we expect that the cash flow from those clubs will be sufficient to enable us to sustain our operations and meet the cash obligations noted above. We do not expect that we will require additional capital during the next twelve months, except in connection with new development projects that we may undertake. At this time we have not committed to any specific new development project nor obtained any financing commitment.
Once we have passed the current period of rapid expansion, our capital requirements will be much easier to control. Once clubs are established, they either operate profitably or they are closed. So the capital requirements of ongoing operations should not be significant. Our plan is to continue to expand, but at a pace commensurate with available capital and capital commitments, either from equity sources or secured lending sources that should become available once we have a portfolio of assets to offer as collateral.
AI
