Home Solutions Of America Inc fka HSOA

[eastunder]

Nicholas Yulico returned my email and pointed out he had addressed his article with a follow up the next day.

It was hidden at the end of the following article. I skipped the beginning part of the article because it didn't have anything to do with HSOA. The link provides the whole article, I think?

This was on AUG. 17th

Bricks and Mortar
Melco Soothes Credit Concerns (the title of the article where info on hsoa was found on the bottom)
By Nicholas Yulico
TheStreet.com Staff Reporter
8/17/2007 12:51 PM EDT
URL: http://www.thestreet.com/newsanalysis/bricks-and-mortar/10375049.html

Home Solutions Plunges
In other Bricks and Mortar mock portfolio news, Home Solutions of America (HSOA - Cramer's Take - Stockpickr - Rating) shares were sinking 22% Friday to $3.16.

Earlier this week, Home Solutions disclosed a major related-party transaction and warned that it has likely violated certain covenants of a credit facility. It also said the Securities and Exchange Commission and Nasdaq made informal inquiries into the company's public disclosures.

As a reminder, I've been flagging the stock as overvalued since late April. The stock has since fallen 37%. (OH! HE IS SO PROUD OF THAT!)

On Friday, the company said it has not defaulted on its credit line and is still able to borrow under the facility. However, lenders have still not approved the resolution of a note payable that relates to the company's purchase of its Fireline subsidiary last year.

Home Solutions plans to scrap a note payable due to Brian Marshall, who owned Fireline and is now Home Solutions' largest shareholder and a company executive, in exchange for letting Marshall collect certain accounts receivable related to Fireline.

The company said Friday that it is in "advanced discussions with its lenders to receive a waiver." If the lenders do not consent to the agreement, then the company will seek to restructure the lending pact in order to comply with the covenants.

"We have an excellent relationship with our lenders and are confident that we will reach a speedy resolution," said Frank Fradella, Chairman and CEO of Home Solutions, in the statement. "However, if we are unable to, we would restructure Marshall's agreement to avoid an event occurring which could trigger a default."

The company also said it is conducting an independent review of all related-party transactions, such as the ones with Marshall. Home Solutions' quarterly report this week revealed that one of its $100 million contracts was with a company that is 50% owned by Marshall.



***So with that said...It still indicates there is much more we need to know about HSOA and the first thing we need to know is the status of the approval of the resolution of a note payable that relates to the company's purchase of its Fireline subsidiary last year. Guess I need to email the company on that one.

Shorts are normally here for a reason. It obviously needs resolution before they would consider covering. That also is our catalyst should a PR be put out regarding that resolution.

Shorts would have to cover and I think that may mean N. Yulico, our author, as well? :)

Jen