Already the numbers don't make sense.
They had predicted $3 million in sales for the quarter and just "happen" to reach it, when they struggled to get $2.5 million in sales for Q3. Even so, wasn't that going to bring them to $9.5 million for the year and not $10 million? When they file the 10-K I think we'll find that this $3 million is a "gross revenue" figure and the "net revenue" will be a lot closer to $2.5 million.
COGS is $2 million, so that should leave $1 million in gross profit, but they list $670K for gross profit - something is off there.
"Notwithstanding the above, the Company’s largest supplier of products recently verbally agreed to extend the Company’s required terms of payment from thirty days to one hundred and twenty days from the date product is received, which will provide the Company approximately $1.5 million of short term capital in the near term. "
1) A "verbal" agreement. That doesn't sound good.
2) This means that they are out of cash, folks. How will they pay salaries and take care of other things?
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