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Biotech / Medical : Ergobilt (ERGB) - Ergonomic Chairs
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To: tonto who wrote (763)3/23/1998 5:07:00 PM
From: Scott D. Hakala  Read Replies (1) of 900
 
Tonto, The liquidity issue was apparently due to the ramp up of the Foniks Writer business and the seasonality in BodyBilt sales. The cash needs for growth were dealt with with the $7.0 mm. line of credit ERGB received. Last I heard, ERGB had not drawn on a substantial portion of its line of credit and was using that to fund expansion. In January, the Company appeared to have extra cash resources.

No delisting threat has ever been mentioned at all by anyone that I've talked to. The Company has consistently posted positive earnings and has good trading volume.

The dead cat's bounce is for companies with no earnings and at risk of Ch. 11 or Ch. 7 or in Ch. 7 or 11. ERGB had positive earnings in each of the first three quarters in 1997 and reportedly has positive earnings from both Foniks Writer and BodyBilt divisions expected in the fourth and final quarter of the fiscal year ended Feb. 28, 1998. A Company that gets a $7 million line of credit, doesn't have to draw a portion of that line of credit and reports consistently positive earnings is not a dead cat, it is definitely a live cat.

As for the new audit firm: That is not uncommon when a company hires a new CFO. You'll note the recently filed 8-K does not mention any issue of dispute between the Company and its former accountants.
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