Richard Harmon: Liberal for whom? I felt that the terms were extremely steep -- 10% interest and 420,000 warrants good for 5 years at $10 price to get $7,000,000 for a one year loan. At the end of last year VGINF had about $7,580,000 cash or stock on the books.
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However I believe that the company is losing at the rate of about $10,000,000 a year and had sales last year of only about $3,000,000. They will have $700,000 interest to pay on this loan plus the principal in a year. They must have burned up much of their reserves now, including on the recent acquisitions. One would certainly hope that this stock will be at >$10 in 5 years. I am hoping it will be there within about 5 days or 5 weeks.
Looking at the annual financial report VGINF had SG&A of greater than $7,000,000 to support ~$3,000,000 in sales. Seems like a lot. Maybe too many VPs. Research was only about $4,000,000.
You would likely have a much better understanding of the financing of these companies and their costs, but to me those are steep terms and VGHINF will have to "refinance" the loan again in a year.
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