Mad2,
There's no doubt that GumTech will need capital to grow from ~8 million in sales to ~100 million in sales. What company wouldn't? Cash can be generated internally from operations or externally through loans, private debt, or equity. I have no doubt that Zicam will generate at least some of the cash that the company needs to grow. They already have all the capital improvements in place to make approximately $100 million in gum. Therefore, I don't think they will require much in the way of fixed assets. Cash will be needed to support growing operations for the purchase of raw materials and labor, but even if they borrow to support their growth, what's your point? I seriously doubt if financing will be an impediment to GumTech's growth. Money is available as we saw with the Citadel financing. I have no doubt that Citadel will make plenty of money on their recent deal with GumTech. What's to stop them from lending more if GumTech needs it? Finally, if GumTech is growing so fast that cash flow becomes a problem, I think GUMM shareholders will be very happy with the share price.
Last, I emphatically disagree with your revised definitions of fraud and scam. Fraud has a very specific legal connotation and involves intentional deception. Scam generally means the intent to commit fraud. Neither of these terms even remotely describe GumTech, it's Officers, Directors, products, or anything to do with the companies operations. Of course sometimes things don't go as planned, but that does not mean it was a scam. IBM lost the operating system war with Microsoft. Are they a scam too? |
