RE: Default on $4.8 mil DebtJohn Smith have you done your own homework? Apparently not!
I think you should be calling management yourself before fear mongering. I will do your homework for you.
I spoke with the new CEO Stewart Davis. He tells me that financially the company is fully funded. They have breached the covenant that Wellington Financial laid out in front of them which requires that they have a minimum of 1 Million or so dollars in the bank CASH not accounts receivables etc. He has been speaking with Wellington about reopening the terms and extending the loan. He is not concerned that Wellington is going to move on closing the loan as they have a good working relationship. Lets be honest they are making good coin from Healthscreen so why not rake in more while you can. As Stewart said in the latest press release the deal will get reworked out between July and September. That is so far out that obviously there is confidence coming from management that everything is good and Wellington is happy to be apart of Healthscreens plans to grow their business.
Now onto the business model. Lets be honest here Justin Screwed up! He spent like a drunken sailor on growth but didnt look at the bottom line. So now Stewart Davis has come on in and said if there is a part of this business that is not making money and contributing to the bottom line it is gone. Thus the cutting of the contract of physician services. It was Healthscreen that broke off this deal not the other party as Stockwatch has you believe. Stewart Davis has made it clear that there will be physician services just in a different format with higher margin products and services. Rather than having the blanket plans/services they will be targeting high marging services that can be expoited and help the bottom line. All of what is vaguely explained here will be further explained when the earnings come out.
Where we stand now is we will see revenue fall substantially. Big cost cutting efforts in effect and a focus to break even/profitable going forward. The lost revenue really was only window dressing as it wasnt profitable. Personally I much prefer Mr Davis's approach of cutting costs and looking at where Healthscreen can make a profit.
Your (John Smith) mantra has always been about growth. Well there will be growth with Electronic Medical Records and other services. Just in the near term they need to refocus. I hope this helps. I also hope that your doom and gloom theory goes too!