Stephen, the cash situation can't be great, given no revenues since the sale of the processor to the partnership. On the other hand, Paul tells me that the company paid 50% cash in advance on the order of the two $22,000 pumps, with the balance due on delivery in November. Paul considered this remarkably favorable terms for a company with GRNO's credit history, which generally leads to vendors demanding 100% cash with the initial order.
I have long thought that one reason for reluctance of buyers from GRNO to make a firm order is that this company, with such terrible credit history and no proven ability to deliver a reliable product on schedule, is also demanding cash in advance with the initial order. I wish they had sufficient capital (since no one will lend them money, either, until they have an established, proven cash flow stream) to be able to build one processor "on spec"--that is, to always have one on the shelf ready to go for companies that don't want to release cash until they see the concrete product that they are getting. I suppose they could charge more for such a machine, to reflect the carrying costs of inventory, than they do for one where they custom-build it using the buyer's deposit to pay their costs. Especially early on like this, I'd be willing to bet that prospective buyers would be a LOT more willing to take the plunge. I know if I were buying one and were asked for $600,000 up front, I would lock up that money tighter than a drum with covenants and conditions for its use (and for title in the created property) before I'd let a company with this kind of desperate financial history get its hands on the cash.
Still, with three sales (maybe two and their share of partnership income) they're out of the woods. So I'm still optimistic about my investment.
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