Kevin,
<<Okay, I'm starting to see some of your assumptions: 100% sale of current inventory (We'll See(TM)), no
cash used to restock inventory(!?), and no net reduction of accounts payable. Not quite the way I'd calculate
it, but whatever works for you.>>
I think the answer to your points is...whatever applied in earlier years (minus option cash) will apply this
year. So, if they made net profits in earlier years, without any outside cash infusion, then they should make
their net profits this year, plus the option money, business conditions being equal. Of course, some business
conditions are better than equal this year. The improved CAN$ and savings in credit line interest during the
4th quarter, are just two that spring to mind.
Inventory restock ? As I said, their habit has been to borrow for new inventory on the credit line (now with
an increased cap at $17.5M), so all the year-end cash can be made available for other uses, without detriment
to their basic business.
Frank |
