Savvy Trades and Investments

[larrybaz]

FORD - I had a small position that I dumped this morning. I don't like the deterioration of their balance sheet with their continuing losses, although this blurb from the 10-Q shows that they should be okay for awhile since their largest creditor, Forward China, is working with them.

For the three months ended December 31, 2023, the Company generated a net loss of $354,000, loss from continuing operations of $381,000 and cash flows from operating activities of $116,000. At December 31, 2023, the Company had $1,300,000 of borrowing available under its line of credit with a bank that was renewed in March 2023 and has a maturity date of May 31, 2024 (see Note 11). By discontinuing the retail segment, which incurred significant losses, the Company expects improved performance in future periods. The Company’s OEM distribution segment procures substantially all its products through independent suppliers in China through Forward China. In connection with the new sourcing agreement and in order to preserve future liquidity, in November 2023, the Company and Forward China entered into an agreement whereby Forward China agreed to limit the amount of outstanding payables it would seek to collect from the Company to $500,000 in any 12-month period, which the Company agreed to pay within 30 days of any such request (see Note 9). This agreement pertains only to payables that were outstanding at October 30, 2023 of approximately $7,365,000. Purchases from Forward China made after October 30, 2023 are not covered by this agreement and are expected to be paid according to normal payment terms. Based on our forecasted cash flows, discontinuing our retail segment and the agreement with Forward China, we believe our existing cash balance and working capital will be sufficient to meet our liquidity needs through at least February 28, 2025. The condensed consolidated financial statements do not include any adjustments that might result if the Company is unable to continue as a going concern.

I just think there are better opportunities out there. This one used to run in the past, also. That hasn't been a thing lately either.