Total liabilities for $CVSI: Q2 = $17.8M Q3 = $23.3M QoQ Change = 31%
Total liabilities for $CWEB: Q2 = $22.3M Q3 = $51.9M QoQ Change = +133%
That is a very fast indebtedness pace. A VERY expensive strategy/business model. A 6 full points drop from TTM average in the gross margin on a flat Q is a BAD sign.
CVSI seems to be in more control of it's financials. These are all FACTS.
It's a long race for those who want to go LONG. Maybe the conservative strategy until FDA regs are in place is better. Controlling your product's discounts. Increasing your distribution channels as always. Doing the science work required and needed. Keeping a steady yet aggressive pace without giving away your product. Letting everybody else kill each each other and waiting for the right time to expand (Regs needed). Just a thought.
2 more quarters and the cash available will probably be about the same. Inventory is taking a toll in the cash flow for the competition. Check the cash flow statement and changes in inventory. This inventory growth does not seems to be under control and that's because of the business model. CWEB grows it's own raw material. This can become a problem. The company could end up having a huge accumulation of inventory without knowing what to do with it. Any unfavorable regulation could trigger a disaster. USDA or FDA, or both.
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