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Toxic Avenger

02/21/09 9:46 AM

#30795 RE: duke00324 #30791

How big?

To me $1.5 MM would be good with a return to historic gross margins of around 40%. If G&A stays as low as last quarter, that would yield a $500k loss roughly, which wouldn't be bad.
$3 MM with historic margins and small rise in G&A would get to break even which would be great.
I don't see Sneaky's number of $4MM plus, but that would certainly move the stock up, unless gross margins stayed down or G&A moved up proportionally.

The balance sheet will also be interesting. The company has been operating with negative working capital for over a year now and IMHO that's not sustainable. With Sovereign exiting, I would hope they find a better lender (meaning one not only willing to lend on assets) and/or get some equity funding that doesn't negatively affect the share price.