Repost----Complete response didn't post the first time.
Good catch on the 9/30/2005 mistake. I just glanced at that column initially assumed it was 9/30/2005 numbers for comparative purposes since they showed 6/30/2005 comparative numbers in the 2nd quarter financials. Plus, the bottomline numbers obviously don't add across so at first blush the numbers don't appear cumulative for this year. The reason the bottomline numbers don't foot across is because the first quarter net ordinary income of $1,125,416 should actually be a negative number since it is actually a loss. With that change the Net Income(Loss) numbers foot across, as you already pointed out that all the rows do.
As for being cash-strapped, they certainly appear to be so, and with the elimination of the Accounts Receivable booked for the ProSec order, doesn't look like they can generate more cash without good, solid sales or by using the financing offer they mentioned in the 2nd quarter notes to financials. However, I do see several decent sized orders being filled in the 4th quarter as mentioned in Note 4. That should definitely help the cash flow situation to some degree.
They've never shown negative gross profits before, but even the 3 month numbers for 6/30/06 differ from what was reported in the 2nd quarter financials. Guess those were still showing Frank's wazzoo. I know he sure showed it, now that we have a clearer view with hindsight! ;-)
Hopefully the negative gross profits mean that Fred Wicks and Mike Roy are making sure they get initial sales even if that means cutting the price somewhat. Those sales will get word of mouth out there and generate followup sales which will allow for potentially raising the price a bit towards what we've previously seen posted, and also helping to generate some economies of scale on the manufacturing side as sales ramp up, thus lowering the manufacturing cost on a per unit basis with a reulting decrease in cost of sales for sales made.
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