NO QUARTER FOR CORRUPTION (Focussing on The Fed./FRBS)

[abh3vt]

Rruff, I have no position whatsoever on this company, so I decided to check the financials because the writer sounds like he has some legitimate beefs.

Here's the most recent Q:

"Ownership of Circle Group is concentrated in management. Gregory J. Halpern, who
owns 29.% of the outstanding shares of our common stock, and all of the
directors and officers collectively own 35%. Holders of our common stock can be
out-voted by management in most circumstances and thereby management can control
the composition of our board of directors and our policies."

Comment: he clearly has an interest in seeing the shares go up. Now, why would short-sellers take such an interest here?

"The report of our independent auditors accompanying our consolidated financial
statements for the year ended December 31, 2004 and the notes to our interim
unaudited consolidated financial statements for nine months ended September 30,
2005, discuss issues which raise substantial doubt about our ability to continue
as a "going concern." The going concern qualification is attributable to the
Company's historical operating losses and the amount of capital which the
Company projects it needs to satisfy existing liabilities and achieve profitable
operations. In positive steps, the Company has closed down its loss generating
businesses, and continues to evaluate and implement cost cutting measures at
every entity level. For the nine months ended September 30, 2005, the Company
continued to experience a negative cash flow from consolidated operations, and
projects that it will need certain additional capital to enable it to continue
operations at its current level beyond the near term. The Company believes that
certain of this needed capital will result from the successful collection of its
accounts receivable balances as the manufacturing plant is fully operating
during the coming fiscal year. The Company believes it can raise additional
funds through private placements of its common stock.

AND

RESULTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AS COMPARED TO THE
SAME PERIODS ENDING SEPTEMBER 30, 2004

Revenues

Revenues decreased by $49,576 or 28% to $124,993 for the three months ended
September 30, 2005 from $174,569 for the three months ended September 30, 2004
Revenues decreased by $115,410 or 22% to $404,385 for the nine months ended
September 30, 2005 from $519,795 for the nine months ended September 30, 2004.
The decrease in revenues was primarily due to the decrease in demand of our
e-tailer products as a result of budget cuts in the airline and train
industries, and to the decrease in demand of our business consulting service.

Comment: not a very healthy business. Yet, the stock has perked up a bit in the past few months because of speculation that George Foreman's presence will boost sales.....
http://bigcharts.marketwatch.com/news/articles.asp?guid={04F071F4-4235-4770-9474-55587A098106}&n...

Bottom line, the CEO is having trouble raising money from banks, so he needs to use the stock market to get it. He feels that the stock has been held back by short sellers, who are betting that the company can't overcome its poor cash flow. I think the CEO should spend less time worrying about the shorts and more time on collecting those A/Rs and other creative ways to expand his profit margins. Maybe if his company actually made some money, he wouldn't have this "short" problem.