>> cash flow neutral <<
They do have some debt (~ $10 mil per Yahoo), so some of that might be coming due or need to be rolled over. Also it sounds like they have some capital expansion planned. 5 mil in cash isn't much operating capital.
Raising the money at the same time as the rev split would have been better. If you only do the split then the anticipation is that another shoe will be dropping, so investors shy away from the stock until after all the bad news is out. It's also more likely that shorts will pile in after the rev split since they figure a financing is coming. The entity doing the funding can also go short to get more favorable terms for the financing and warrants they will be receiving. It's a swamp for these tiny microcaps, with a lot stacked against them.
Fwiw, the only microcap that 'made the cut' for my Long Term Portfolio is Winmark (WINA). They are an anomaly in the microcap world, check out their phenomenal long term chart. Their business also benefits from recession -
>>> Winmark Corporation (WINA), together with its subsidiaries, operates as a franchisor of retail store concepts that buy, sell, trade, and consign used merchandise primarily in the United States and Canada. The company operates through two segments, Franchising and Leasing. Its franchises retail stores operate under the Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore, and Music Go Round brand names. The company's Plato's Closet brand stores buys and sells used clothing and accessories for the teenage and young adult market; and Once Upon A Child brand stores buys and sells used and new children's clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years. Its Play It Again Sports brand stores buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities, such as team sports, fitness, ski/snowboard, golf, and others; Style Encore brand stores buys and sells used women's apparel, shoes, and accessories; and Music Go Round brand stores buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories. In addition, the company is also involved in the middle-market equipment leasing business focusing on technology and business-essential equipment. As of February 23, 2022, it had 1,271 franchised stores, as well as offers its products online at musicgoround.com, playitagainsports.com, and style-encore.com. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.[/i <<<
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