While the Crestmark Bank account is technically a line of credit, it's primary function to Expo Holdings, Inc. is for them to get their hands on their billed invoice money ASAP hence the "factoring expense" you see listed in their filings. In 2009, these factoring expenses were so ridiculously high relative to gross profits that they were the difference between Expo Holdings earning over $40K in gross profit and what they actually did...which was to lose $(11,864.00) on just their billed product invoicing alone.
So to address your misleading statement that Expo Holdings, Inc has used some of this million dollar credit line, yes they have. But only to get their hands on the invoiced amounts from their displays and small shipments of doghouses and the like immediately because their G&A expenses are so much more enormous than their ability to cover them with actual product sales that they can't wait even 30 days for their money. This is simply another indication that the company is a scam set up to sell cabinetry and displays at an overall loss which is perpetually covered by them selling more shares on the open market to common shareholders.
When Expo Holdings, Inc. needs money to pay their generous salaries and perks or occasionally when they can't turn over their inventory fast enough to make money sufficient to buy raw product, they use the money from share sales. They reserve the factor account for quick claim of invoiced amounts. Why? Simple...Brown and Harrs signed off on the Crestmark account and their philosophy on risk has been made crystal clear. They take NO risk whatsoever, the common shareholders outside their little inner circle of friends assume 100% of the risk. That was the entire purpose of taking EXPH public in the first place. To allow them to perform the business in a reckless and totally inept manner knowing that 100% of the risk and subsequently the losses would be absorbed by the common shareholders. When they turn over the invoices to Crestmark once their shipments have been approved and received there is practically no risk whatsoever to them. Just like there is no risk whatsoever to them when they consistently sell product at an overall loss as the common shareholders buying on the open market assume all that risk in the form of making up those monetary losses with the equity in their constantly diluted investment dollars. Nothing has changed. Nothing will. Except the PPS of EXPH shares which will continue to go down until they reach my estimated price of .00005 or lower sometime next year...split adjusted of course...if necessary ;-). All the above IMHO.
SBB
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