RE:RE:Ready for EFL checks to suppliers to BOUNCEBusiness5959 wrote: I have a feeling that their position is much more desperate than anybody thinks.
I know that they are up the creek, but there is some cushion, which they acquired through their recent dilution. They added high-priced staff and dumped little guys, so I expect higher SG&A in the next income statement. They also have considerable expenses with their quest to acquire assets/operations overseas. Still, if I were a betting man, I'd say that their cash position will still show around a million at the end of March. If there is no more dilution, the cash will get tight towards July or August. It is conceivable that they will go back to the well with another "CEO-share loan", so that someone close to the family can sell the sucker short and make a killing, then diluting the whole thing one more time. If it happens, it will happen late in June. At that time, the remaining $38,000 of Varadero will drop to about $20,000. If it does not happen, they need a real success to keep on going.
When re-reading the audited statement from last September, there is no verbatim red flag yet from the auditors about "going concern", but it has been touched in the management notes (page 23: "
and continue as a going concern is uncertain and is currently dependent on the continued support of its shareholders and providers of debt. ") The auditors are more cautious, but if one has read hundreds of annual reports as I have, this sentence is still scary: "
The Company has incurred operating losses, a cumulative deficit and a working capital deficiency and is seeking to address its financing requirements through government assistance, joint venture agreements, debt or equity financings, renegotiation of current liabilities or asset sales. If the "going concern" assumption is not appropriate, then material adjustments may be necessary in the carrying amounts and/or classifications of assets and liabilities in these financial statements " Pass the popcorn...