HDST Headstrong Group Inc Message Board

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Microcap & Penny Stocks : HDST Headstrong Group Inc

HDST 0.00

Dec 20 4:00 PM EST

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To: rharris who wrote (136)	4/9/1998 7:37:00 PM
From: JohnO	Read Replies (1) of 389

In recent conversations with Tom Malik he stated they were not in chapter 11. They had resolved the difficulties before having to declare chapter 11. This a slow time for any manufacturer in this field. Most orders were placed in late to early part of the year for summer sales. They have cut back their employees considerable due to this slow period of their year. Management holds 0% of the stock from a high 5 years ago of 25%. This was told to me by past CFO Jerry Ordenker who left end of last year. A couple of years ago HDST went through a similar delivery problem and lost several large accounts. It appears they are experiencing the same once again. It takes about $70,000 to file their financial statements and at this point they will not be able to spend this money to file. They do offer a quality product the problem is they have a difficult time meeting delivery schedules to the stores. Several of the larger chain stores accept them on a trail basis in a small number of their stores. If the product does well they expand to additional stores and so on. One of the problem that exists is HDST is unable to meet the larger demand and still keep costs down. Another problem is any returns from these larger chains is money lost to HDST. By returns I mean the store ordered more product and instead of holding the items they return them to HDST. Turn around for payment can take 3 months from date of delivery. This adds a heavy burden on a cash poor company like HDST. With charitable organizations the turn around is 30 days and the return problem doesn't exist. The problem is getting enough of these organizations to make you profitable. Tom Malik is like the little dutch boy with his finger in the dam. Unless he gets infusion of cash investment and a management team into HDST the future is bleak. A number of these prospective buyers are just bottom fishing. They're trying to pick up a company with a good product for next to nothing. One of the people looking to buy HDST has plans to expand their manufacturing to other sporting equipment along with the helmets. For the past three years I've been involved in HDST an done well with them. With a new management team and infusion of capital they could be back in the black within 2-3 quarters.

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