Replies to post #98176 on Expo Holdings Inc. (EXPH)

[EarnestDD]

WRONG ... vetting an invoice is simply a matter of ascertaining the invoice is real and customer is credit worthy and will pay.

Even INSOLVENT money losing companies like EXPH can get an invoice factored.
jmo

[Santa Barbara Broker]

Really??

Yep, "really". As your post points out clearly, that particular bank (which was one I believe Expo had a factoring account with) would not discuss individual scenarios. When the subject of small business loans was brought up, they naturally discussed the parameters for making those loans. Of course they could neither confirm or deny what TYPE of service Expo Holdings had with them and therefore could not and DID NOT mention that 1) Expo Holdings had no "loan" with them that required extensive vetting and 2) that the factoring account which is simply the advance on an invoice from monies already earned, required no vetting of Expo Holdings, but simply that the invoice existed and the company that owed the fees to Expo Holdings intended and had contracted to pay it directly TO the bank.

One must understand what a factoring account is before discussing one I suppose. Especially if it is being confused with a cash loan. While it is technically a very, very short term loan, it is one of only 30-45 days or less. It is usually secured by more than the loan equivalency in cash from a company that has been vetted by the bank (probably Lowes in that instance) and is a low risk, extremely profitable service for a bank to provide. There is almost no chance the bank can lose money and they can draw their large profit (interest) directly from the cash payment securing the factoring account before ever distributing the remainder (if any) to Expo Holdings. It carries even less risk than issuing a credit card...something at that time almost anyone in the universe could obtain on a signature.

Expo is a front company established to provide a platform to distribute shareholder equity to the principals through G&A expensing. They live invoice to invoice when they are not recycling the money set aside from share sales to maintain the company front. They are currently broke and IF they are not performing some highly dilutive financial moves (possibly undisclosed and in private without the knowledge of their entire shareholder base) as I type, they WILL be doing so very shortly. Expo Holdings WILL DILUTE or they WILL FAIL. There is no third option and when they excercise one of the only two options left to them, current shares will become nearly if not totally worthless. Lack of this knowledge and simple logic could prove extremely costly to EXPH shareholders in the very near term. Sorry for your losses. IMHO.