BFDI is getting hammered by the activist press and the multi-personality Meifud (who BTW is always consistent....always a basher....and who does not discriminate with aliases....can be Jerry or Cindy). Can you imagine what would happen if the company actually said something before this baltimore deal is worked out?
As to BFDI's financials, bankruptcy occurs when you can't pay your bills on time. If one wants to evaluate that issue, he/she is going to focus on the PNC credit line. As of September 30, BFDI had 6.55M in current assets (mostly cash and A/R) and 6.82M in current liabilities. The 6.82M includes the 2.5M owed to PNC bank (due in March 2014). The 6.82M also includes .5M owed to CB and Scott, which is not due until September of 2014....and there's no way these managers are going to ever require payment until its good for the company since they together own over 60% of the stock. Does anyone actually think these guys lack incentive to right the ship?
Anyway, you can forget the .5M owed to CB and Scott because they aren't going to call that due....so, effectively BFDI has 6.55M in current assets and 6.32M in current liabilities (6.82M less .5M). The company therefore could narrowly pay off all current liabilities from available liquidity.
If you read the last 10Q, there was over .8M more spent over the past 9 months on salary-related expenses directly tied to Baltimore. BFDI just told us that it is taking its costs down to assure breakeven operations....that tells me it is not going to let the Baltimore delay hurt the balance sheet further....those variable costs are getting chopped.
PNC, like any bank, comes out best when it earns interest and gets paid back. At this time, there's nothing to indicate BFDI's inability to resolve the loan.
Further, Baltimore already agreed to buy the cameras from BFDI and it owes BFDI 1.5M, whether the contract goes forward or not.
So, the biased press....or commonsense?
I have to say that I'm not totally sure because I'm not sure when the cameras became useful. Your question is one I've researched for some time previously. Part of the point of my post was that evaluating risk goes beyond reading what the press says. Dealing with the issues like you are looking at is the only way to make a commonsense evaluation of where the company stands financially.
A sale is booked after the inflow is both earned and realizable under GAAP principles. Both criteria must be met before revenue can be booked. Based on every source (10Q, biased press, anything) I've seen, the cameras are installed....installed to the point of the city's usage? That would need to be the case before the funds are "earned." Further, the issue of "collectability" must be settled too and not in question for the sale and receivable to get booked.
Looking at the numbers on the financials, I don't think the 1.5M (maybe a small portion has) has been booked. That's my opinion. You and I both know it is a very important question, though.
I luv ya too, Fab......I don't think the press ought to be my basis for judging the bankruptcy risk, though. That's my point.