Avante Corp V.XX

Credit card facility of $350,00. Needed for what purposes?

[Flyer123]

Per June 30, 2020 financials Note 13:

"On November 23, 2018, the Company and its bankers entered into a new credit agreement to provide senior credit facilities to the Company. Under this agreement, the bank provided an acquisition facility of $10,000,000 (capped at $4,985,022 as of April 2, 2020)......and a credit card facility of $350,000 (March 31, 2020: $350,000)."

Can anyone provide examples of what this is needed for or used for, and how it works?

[Froggy1]

I'm not a finance guy but I think the money is to operate the company paying employees well ahead of receiving client payment. The credit card facility yes for Monday and things like buying clients lunch. I hear these guys are big entertainers

[Flyer123]

Do you mean a bank facility is used to pay company expenses like employee wages, but that the credit card facility represents lending limits on credit cards given to management to use to pay for lunches etc? What makes you say they are big entertainers? 

[Froggy1]

Yes they finance payroll with bank money and then collect later - 45 days. Big fancy lunches, expensive wine, this is central to their operating thesis. I know well, trust that I know of what I speak.  The problem is not lavish lunchs, it is lack of profitability, they will run out of money in a year or so: hit a debt wall.   Consulting fees are also a concern, the CEO could be