R59 and Hweb, I think the reason that CRLI has been beaten down is the threat that Dialog4 will be selling their 1.25MM shares into the market at some point. The SEC declared the registration of those shares effective back in July.
There are also some significant risks that the company could be forced into a bad equity for cash deal to meet its debt obligations (copied from their risk statements in the last 10Q):
As a result of our outstanding debt obligations, we have significant ongoing debt service requirements which may adversely affect our financial and operating flexibility.
Even after giving effect to the restructuring of the debt we owe Harman, the settlement of our disputes with Dialog4 and other obligations, we will need to generate significant cash flow to meet existing debt scheduled principal payments. As of June 30, 2006 over the next twelve months, we need approximately $922,329 to pay scheduled installments of the principal on our existing debt. Not included in the $922,329 are obligations totaling $1,175,000 held by Jayson Russell Brentlinger, the father of C. Jayson Brentlinger, our Chief Executive Officer, President and Chairman. With respect to $475,000 of the total obligation owed to Mr. Brentlinger, if he were to demand repayment, we would have 30 days from the date of notice to satisfy the $475,000 obligation. If we fail to generate sufficient cash from operations to meet these and other ongoing financial obligations, our results of operation and financial condition may be adversely affected.
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YTD cash flow: +104k. How are they going to raise the cash? Cash on hand as of June 30: 32k. I think there is substantial risk of the company having to issue more shares on highly unfavorable terms.....
AI
