I've done a lot of DD including reading most of the post here. Just Financial dribble for now:
Analysis:
looking at the 8/14 10Q (nice to actually see one lol!) and there are a lot of positives on the growth side and the challenge of their successful growth, like most growing companies, is their lack of liquidity as of 6/30/06. It may have improved since then, but at the end of the 2QTR their NWC is all in the A/R, their bank overdraft is much higher than the previous year... as is their current bank loan. The cash flow statement shows a net decrease in cash for the period of $40 after adding back $164 in depreciation and the cash save of $176 from giving stock in lieu of cash for services rendered. So, they are cash tight. The win here is if they continue to grow and it apppears they are postioned to do this. But that new growth will require more cash.
Question:
it would be good to know if they are going to fund this need with increase debt or the issue of additional shares of stock. Issuing stock is the cheapest way for a company to raise capital, even though shareholders see this as dilution. Either way they do it...... they will need to do something. It's not bad, it's normal. Would be good to know what their plans are.
AI
