bliz82 Post on 4/22 is worth reading again.
So the way I read this is that Adino believes the IFL terminal is worth more than $7.9M and they have an option to purchase it for $3.55M through 7/31/2008. Is that the way the rest of you interpret this?
NOTE 2-GOING CONCERN
As of December 31, 2007, the Company has a working capital deficit of $7,949,223 and a retained deficit of $14,928,702 these factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern depends upon its ability to obtain funding for its working capital deficit. $3,355,984 of the working capital deficit represents the purchase price for the terminal assets which are currently under a capital lease. The Company believes that the market value of the terminal assets is significantly greater than the total working capital deficit and that current cash flow is adequate to support a longer term financing package to satisfy the working capital deficit. These factors lead the Company to expect that the terminal financing will include additional capital to service and pay down existing obligations. Certain officers and directors have agreed in writing to postpone payment if necessary should the Company need capital it would otherwise pay these individuals. Lastly, the Company plans to grow through merger and acquisition opportunities including the expansion of existing business opportunities. The Company expects these growth opportunities to be financed by a combination of equity and debt capital; however, in the event the Company is unable to obtain additional debt and equity financing; the Company may not be able to continue its operations.
NOTE 3-LEASE COMMITMENTS
There were no lease commitments at December 31, 2006. The company entered into a lease commitment April 1, 2007. IFL agreed to lease the terminal from 17617 Aldine Westfield Road, LLC for 18 months at $15,000 per month with an option to purchase the terminal for $3.55 million by July 31, 2008. AEC has evaluated this lease and determined this lease qualifies as a capital lease for accounting purposes. The terminal has been capitalized at $3,179,572, calculated using the present value of monthly rent at $15,000 for the months April 2007 – July 2008 and the final purchase price of $3.55 million discounted at IFL’s incremental borrowing rate of 12.75%. The terminal is being depreciated over its useful life of 15 years resulting in monthly depreciation expense of $17,664. As the purchase must be exercised by July 31, 2008, the entire lease obligation is a current liability. As of December 31, 2007 the carrying value of the capital lease liability is $3,355,984.
AI
