High Wire Networks Inc (HWNI)

[sps50]

In factoring, the receivables are not fully "sold". Most agreements have fine print that keeps the risk on the original owner of the receivables and thus the risk as well. The collection rights are what is transferred. Factoring is about time and use. It is well known that big companies/governments stretch out their payment of receivables well beyond written terms and dare you to stop doing business with them. They refuse to pay late fees. Thus SGSI(D) gets working capital sooner but by accounting rules must still maintain the liability on the books as offset until the collection officially clears. Someday soon we hope they will have a more stable balance sheet to dictate better terms for financing. I will let you judge if it was wise. I trust the future 10-Q's etc will confirm it. JMHO

SPS50 MBA Finance, CMA