I agree with you insofar as you point out that some of us, myself included, have assumed that VEND is beholden to FLEX for inventory obligations, and that that assumption may be incorrect.
Do you have reason to know that it is not correct? Do you know that VEND purchases components directly from suppliers as opposed to purchasing them through FLEX? I'd be interested in knowing.
There are a number of different ways in which the purchase arrangements and related credit obligations might be arranged, and they could change over time, for that matter.
One intriguing possibility is that the attempt to establish a manufacturing relationship with Stoelting may be driven in part by the fact that Stoelting is the supplier of one of the most expensive components of the kiosks, if not the single most expensive component. Stoelting should be better-positioned to help VEND with its cash flow problems than FLEX.
Of course, regardless of whether it's Stoelting, FLEX or other vendors, VEND's credit should be a real concern to sellers. As of December 31, VEND had managed to pile up over $7 million in accounts payable, and total debt of over $13 million even if you ignore the deferred revenues from franchise sales. Credit managers should be tightening up on VEND, although I suppose their vendors may be enjoying high profit margins on their sales to VEND that they don't want to miss out on.
AI
