Quantum International Corp. (QUAN)

[Voices of Reason]

In what form is that deficit? - answer: working capital = Current assets - current liabilities. If a company's current assets do not exceed its current liabilities, then it may run into trouble paying back creditors in the short term. The worst-case scenario is bankruptcy

Current assets are the most liquid of a company's assets, meaning they are cash or can be quickly converted to cash. In this case, QUAN's cash is extremely low - $1588. It does not include longer term assets like the biodiesel refinery that is not quickly convertable to cash.

Current liabilities are any obligations due within one year. In QUAN's case these liabilities include:
$43k to accounts payable and expenses
$232k in convertible debt
$1153k in short term loans

It does not include other longer term notes,convertables which tally up to another $3.3 million.

Clearly, in QUAN's case, this working capital deficit is a significant issue since it has no meaningful readily available assets to pay off its short term liabilities - this will result in either: a) bankruptcy or b) more (massive) dilution to pay off the loans and convertible debt.