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Non-Tech : GRIN (Grand Toys International Inc)
GRIN 27.010.0%Dec 2 3:59 PM EST
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To: Kevin Podsiadlik who wrote (473)11/27/1999 3:24:00 PM
From: Frank McVerry  Read Replies (1) of 495
 
Kevin,

<<Okay, let's go back to the 10-Q. It states GRIN's cash position as being $280K
as of 9/30. Are you trying to claim that GRIN's cash position will increase by $10.7M
in Q4 (with no more than $3M in additional option sales), OR... does the $280K
figure fail to accurately reflect GRIN's "cash position" as of 9/30, as you are
choosing to define it?>>

The former, and without any further option exercise. Here may be the best way for
you to see what is happening - compare the debt/inventory situation in prior years
at the end of the 3Q. I had a quick look at the 1997 3Q earnings statement (a roughly
comparable year in net sales terms) and I saw,

(for Sep 30, 1997)

Inventory $8M
Credit line debt $7.6M

The same numbers for Sep 30 1999 are

Inventory $9.92M
Credit line debt $0

The situation in 1997 was the typical one for GRIN - they buy their inventory with their
credit line (and any available YTD profit) then pay the debt and other expenses from
their receipts from the retail stores at the end of 4Q. So normally they enter the 4Q with
their Christmas inventory essentially on their credit card. Now in 1999 they actually
OWN their inventory, going into 4Q, because of the $8M option money and very good
YTD net profits.

Frank McV
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