RE:Bankruptcy ???HammyHamster wrote:
Reading that MD&A makes me think it's a very real possibility. This is just the bad news I was expecting, Jeff and his buddies must be grinning ear to ear as they witness the panic sell off.
Pathetic company, pathethic management. Glad I kept my position small for now, will add more at 10 cents and am holding out for 5 cents to go all in.
Rotf. For real?
The quarters have progressively been getting better. Revenue has been increasing and the losses on a per share basis have been getting smaller. Q1 we took a 22 cent loss compared to only a 5 cent loss this quarter. Jeff just closed the TGO acqusition which will further reduce costs. VEG is on an upwards trend.
Based on the MD&A, costs are being reduced and spoilage rates are improving. Half of Q2 was spot market sales with the remaining being contract based. This means that stuff that was grown in Q1 and written off is being reflected in Q2 as one time costs. Come Q3 we'll be far removed from the spot market. Everything that was contract based was sold this quarter; we're solid on that front. Looking at Q3, production starts to seriously kick into gear which will ramp up revenues.
From a cash flow perspective Jeff raised enough money from debentures and share issuance to cover the entire loss. The man also PERSONALLY GUARANTEED $4.1M of the debt, himself. Looking at receivables, we have $1.1M that will be collected in cash come July.
To recap, $600,000 is spoilage and bad product, but that's being improved upon. Assuming revenue has a 60-70% cost of sales, the difference between that and the spoilage would be the one time costs.
Ultimately, we took a small loss but so what? The losses are getting smaller as we progress. Soon we'll be cash flow positive. We're far from bankruptcy. The trend is upwards! Notice as well that the only people selling are retail, amateur investors who sell on fear. Cross Rivers, insiders, and management have been holding strong and steady. They've done the math.