Cash is still a bit tight but at least the CFO didn't lie to me about the repayments..Lots of problems they need to work through, but some improvement I think.:
" As discussed above, we have made our installment payments on July 23, 2009 and September 30, 2009 on a timely basis. Our next principal installment of $1,091,500 is due on December 31, 2009. We plan on funding this installment payment using funds to be repaid to us by the Jin Ma Companies as discussed elsewhere herein. However, any failure by the Jin Ma Companies to repay the amounts to us on a timely basis will have an adverse effect on our ability to repay our debt obligation and fund our working capital requirements.
The Jin Ma Companies plan on funding this installment payment through working capital. Specifically, on August 15, 2009, an agreement was entered into by Jin Ma Construction for the sale of certain land use rights whereby Jin Ma Construction sold the land use rights for approximately $2,191,000 (RMB 15,000,000). Approximately $1,794,000 (RMB 12,280,000) of the sale amount has been received by Jin Ma Construction prior to October 13, 2009 and Jin Ma Construction expects to receive the remaining balance in the near future. Additionally, Jin Ma Construction is expecting to sell additional land use rights with a cost of approximately $2,415,000 for a profit in the near future. Also, on September 17, 2009, Jin Ma Construction collected approximately $584,000 from Nanyingzi Village Committee related to the refund of deposits on land use rights. The Jin Ma Companies are actively pursuing collection on its accounts receivable balances and expect to receive the second annual installment of its note receivable of approximately $700,000 in December 2009. We estimate that the Jin Ma Companies will have sufficient cash flow from operation to satisfy its working capital needs and to funds us in order for us to satisfy the debt repayment schedule for the next 12 months. However, any delay in the sale of our land use rights held for sale or the collection of our receivables would have an adverse effect on our ability to repay our debt obligation and fund our working capital requirements. "
-Fernando
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