I'm not sure I understand why so many think there will be such massive dilution.
If the cash is there and the biz model is intact then where does the need to raise significant capital come from?
The thing we all loved about this model is that it is basically a software company with a contract manufacturer that can expand revenues very rapidly without the need to have much capital.
If their was a real business there, which I think we mostly believe at this point, and it had the margins it claimed then the really interesting thing was that they could go from $15MM in revenues to $100MM in revenues with very little capital and the potential for huge cash generation as long as the margins held.
Now I know the lawyers and the accountants will take their cut, but one can get a HECK of a lot of accounting done for $1MM and I can't see a company this size needing that much even if they needed to review every transaction for the last 4 years.
Now lawyers can run up a big bill and they are going to have to defend what looks to be a pretty bad position, but if they have insurance, this will pay for much of the defense and if they don't it will likely take a while to churn through $2MM in fees and meanwhile the biz keeps generating cash.
Now I know they could suffer quite a judgement if they lose a class action, but that's likely years down the road and who knows what the company looks like by then.
Like I said, if the cash is there and the business model is intact, why do they need to dilute?
