FormerXBC Inc XEBEQ

Answer

[ZouZS3]

Details are light right now so it is hard to ascertain what has really happened here. We expect banks got nervous and pulled credit lines, forcing a company reaction. Higher natural gas prices have certainly been one contributing factor here. With debt at $40M and negative cash flow, we would not expect much for shareholders in a restructuring. Selling when able we think remains the best option. Basically, many things went wrong. Its margins were far lower than the company predicted. Thus, contracts proved less profitable and cash flow was negative instead of positive. New contracts required capital which the company did not have. Management certainly screwed up but analysts/managers (us too) did as well. It was a situation that despite the 'green' aspect and the high growth of the company and sector, companies need to make money at the end of the day. We think that, in a better market, it likely could have raised capital to try and continue. But in bear market investors have little patience to throw more money after bad.