Here's what has happened so far....$5.6 million in revenue, $3.5 million in gross profit, and $1.2 million in net income. All three are company bests.
If you look at the balance sheet you'll see about $200K in cash, which isn't a lot, but it'll help. What I'm eyeing is that $3.9 million in accounts receivable. They've got less than $300K in accounts payable, so a big chunk of that change could be pocketed, even if other expenses pop up in the meantime.
That’s where dilution comes in! Better EPS in the long run…
Think about it like this ...assuming they don't sell one more sponge over the next 18 months (which is unlikely), they've still got about $6 million in revenue on tap per quarter ($35 million divided by 6 quarters is about $5.8 million each quarter). Any one of those quarters could be better than the company's entire previous year. Plus, they're now profitable.
The numbers speak for themselves - SpongeTech will deliver profitability to shareholders. Even with the dilution; owners are better off now than they were before.
But not for long…..The question is when and what will stop dilution?
When Spongetech buys out the stocks from RM? if this is the only option, invest and forget about this stock for 3 years!
Securing a line of credit/loan? (Based on some of the earlier posts)
How long does this take? And why has it not happened, in spite of the Million $$ confirmed outstanding orders already in hand? A proven profitable quarter/year? With the current market conditions in US, it is very rare to find a chicken like Spongetech laying golden eggs, meaning any bank will jump and knock their doors with all the solid facts, figures produced? So why? IS DILUTION a better option for the management?
I am not negative. All I am requesting for is logic and technical know-how of what is going on?? I am in a learning curve and the answers will strengthen my logic and decision.
AI
