Radioio Inc (RAIO)

[suds1460]

Now here is the proper way to read the filing...

Debt is gone, but if you read further than just the comparative Balance Sheet, you will learn that it was converted to stock, not paid down through cash flow from operations.

Income did double on a YTD comparison Q2 2011 vs Q2 2010. But look at the QTD comps. EBITDA is down 27% QTD for Q2 2011 vs Q2 2010. Not a good trend.

Assets did go way up, can't argue with that. However, the most liquid asset, Cash, is being burned at a rate of $114K per month. Without a huge influx of cash through debt or equity financing, they will be out of cash by the end of October 2011. Equity financing will be bad for the current SH because their positions will be diluted. Debt financing will again saddle the company with debt that they do not have the cash flow to service. No bank is going to lend them money with these numbers so the most likely source would be a related party. What happened to the last round of related party debt? It was converted to stock, which diluted the postions of all SH.

The only positive thing about this report is the large increase in revenue. However, even with this large increase in revenue, the company still has that monthly cash burn rate of $114K and in the notes section, it is clearly stated that "The Company has not attained a level of revenues sufficient to support recurring expenses."

Any attempt to paint this filing as "great", "nice" or "awesome" is patently incorrect. While this will probably not cause the stock price to fall too far, it most certainly will not be an enticement for the large volume buys needed to raise the price.

This filing is just more of the same lackluster performance we saw in Q1 2011.