Harrison Vickers & Waterman Inc (HVCW)

[tigerpac]

Deferred revenue is usually money that is paid up front in the form of deposits before the work is actually done.

The big question here is “what is the life of the contract?”

Is it three months or seven years?

Some % of customers will pay to own system and will get the tax rebates. Others will choose to lease and the leasing company will receive those rebates. Those who lease will pay over 5-7 years and revenue will be spread out over those years.

The company likely had a backlog of about 275 installations as of 9/30
(+/- 20). They will need to hire a lot of $25/hr employees to catch up on this work. Nov-Mar installations typically slow down due to weather. These guys don’t work in rain, snow or wind.

The company also doesn’t operate in a vacuum as there are many competitors within the same market all eventually trying to undercut each other to get the job until they can establish a great reputation.

I think this company needs another 2 quarters under it’s belt to see where it’s headed.

The bottom line is that any stock that previously had Canouse/Hicks involvement is structured in a way to benefit themselves first post merger. Until I see that pattern change I remain doubtful that any of these companies stocks can appreciate. This is based on several dozen experiences with Canouse reverse mergers.