Just a couple things to keep in mind about the latest 10-Q:
Good: -Sales growth of 454% compare to Q2 of 2011(Due to expansion in europe, canada, india, nationally) -POSTIVE Operating Cash flow - This means operations are finally profitable at these sales level, and they are only going to keep increasing sales due to expansion. -POSITIVE NET INCOME -Making strides to better corporate governance having added new managers, board members, and restructured the way things are ran. -Solid Cash Flow Statement, and almost no LT Debt.
Bad, but some good -Increased SGA Expenses, although some where Non-Cash SGA expenses like employee stock grants and benefits required by GAAP to be estimated/recognized. These may or may not occur in the future, via dilution, but they are not a direct cash expense to the company. Good, but some bad -Fair Value Derivate gain of $7million - The same is true on the flip side with the Fair Value Derivative gain of 7 million. This is also non-cash but is made up estimated futre interest, penalty, and dilution and stock warrants that were probably extinquished when the PR release was made months back.
On the whole, I think this quarterly report was a success mainly because of the continued sales growth and expansion, and achieving a positive Operating Cash Flow and Net Income. This shows that with continued improvement, it can see sustainable profitability in the futre. Keep in mind the Market Value/Cap is only around $14 million, when sales are on track for around $80 million.
This was ultimately a HORRIBLE report. Although sales revenue continues to climb very nicely, expenses are out of control. MORE IMPORTANTLY, they continue to pay vendors for services rendered in stock. This is very bad! Read the entire report that indicates another HUGE increase in shares outstanding. I am out of this junk!
I disagree with you. Although their financials are not anywhere near where I want them to be, their financials last year are a lot more horrible than this year. Bottom line is that they have substantially increased sales and their expenses are trending down.
You wouldn't be smart if you expected this quarterly report to generate a profit for the company. It will take a little more time. My theory is that they will be positive on P&L's by year end and will be debt free in 2013.
Agreed. and their EPS improved from -.06 per share to .0 for this quarter. Thats a huge improvement considering everything. I believe if things continue to grow, its inevitable that the company will get rid of most debt by the end of the year and turn a profit with cash in the bank. From that point all this company needs to do is not issue those 1.1 billion shares they have authorized and buy back a few hundred million shares and us shareholders should see a significant increase in the share price. Think about it, 100 million shares= $1 million dollars at current share price. If they can purchase 400 million shares they will be right around 1 billion shares a float and will only cost the company $4 million. With a company doing 15-20 million in revenue/qtr this should be possible. $80 million in revenue and turning a profit their market cap should be well over $100 million which means a stock price of .10+. This is all wishful thinking, but this company is doing exactly what they said they were going to do. Continue expanding, lowering toxic debt, and have EBITDA of $4 million by the end of the year. Considering this recent quarter I still think this can be achieved. Don't forget, these numbers are all based on everything prior to June 30th, a lot of their expansion into Canada, the military, Wal-mart, their new products, have not had much time to add much revenue.