rouge,
All the recent filings are UNAUDITED. Don't be a sucker.
The statements smell. Bad debt expense writeoffs grew from 2002 to 2003, to almost a million bucks. They're not doing a good job of accounting for bad debts. Not only that, but they have recently changed their policy to no longer require credit checks. You think collections will get better?
2nd Quarter Net Income of $808,464, or $0.05 per fully diluted share
Whoa, and their "Gain on debt reduction in bankruptcy" for the quarter was $850k. So without that unusual one-time gain, which they didn't have before, looks like they'd be losing money! They also sold some assets in the prior period, which allowed them to show a profit instead of a loss of $600k.
This should be warning enough: Here is the full auditor pronouncement from the last audited statement eLEC has filed:
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As further discussed in Note 2, the Company is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations and has incurred significant recurring losses from its operations, has negative working capital and a stockholders' equity deficiency. A wholly owned subsidiary, Telecarrier Services Inc., has filed a petition for relief under Chapter 11 of the Federal Bankruptcy Laws. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.
Finally, this stock trades an average of $20k or so a day. Anyone buying in might face a very tough time getting out.
Andre |
