New Media Lottery Services, Inc.(fka NWMD)

[dannol48]

Going to watch this one with interest, BUT

I would advise caution on the basis of the last 10Q with reference to new default on payments to Trafalgar Capital and "lack of cash to expand our business". I see from the last 10K the attempt to reboot with the shake-up and debt for equities/warrants swaps, but they appear to lack capital for expansion and their expenses remain high (too high IMO). I do like reboots that have a good plan, but this one doesn't seem to be working (yet).

Disclose: No Position (Long or Short) and Not Paid to Post

Quote from last 10Q follows....

Summary Results of Operations and Financial Condition.

Our financial condition and operations continue to be afflicted by a lack of cash to expand our business. During the last fiscal quarter, our revenue from operations increased slightly and we continued to cut expenses; thus, our loss from operations decreased compared to the prior quarterly period. However, we expect that our expenses will continue to exceed our revenues for the foreseeable future. We applied the proceeds from the $275,000 loan we received during the last quarter, from which we received the net amount of $227,500, to satisfy our ongoing expenses and, consequently, could not allocate any cash to business development or to increase marketing of our client's bingo Web site.


As of October 31, 2009, we were indebted to Trafalgar Capital Specialized Investment Fund-FIS ("Trafalgar"), our largest stockholder, in the principal amounts of $575,000 and €2,211,111 under the terms of four debt instruments. On October 30, 2009, the Company was required to commence repaying a portion of the amount due under these instruments. The Company did not make the payments due on October 30, 2009 or November 30, 2009. Consequently, during the quarter ended October 31, 2009 and in the subsequent period through the date of this report, the Company has been in default under the terms of these debt instruments and the related agreements with Trafalgar. The Company currently does not possess sufficient cash to make the payments required under these instruments. A further discussion of the Company's obligations under the various loan documents and the consequences of the default is included under the heading "Capital Resources and Existing Obligations," below, and under "Part II, Item 3. Defaults Upon Senior Securities."