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Microcap & Penny Stocks : Financial Shenanigans: Stocks Looking for a Fall -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (13)	5/12/1998 6:13:00 AM
From: Dale Baker	Respond to of 108

Here's one right up your alley, John. CYBR: Message 4408076

To: Q. who wrote (13)	5/12/1998 1:34:00 PM
From: drakes353	Respond to of 108

Rainier...thanks for setting up this thread. Should be fun. John re: EQMDE...as of Friday they will be late on their 10Q for Q1 '98 as well. NASD may delist them if they don't get the Q and K taken care of in the next week. The funny thing about the asset write-offs is that virtually all of Equimed's assets were acquired from private companies controlled by EQMD chairman, Doug Colkitt. EQMD paid around $15 million through Q3 '97 for businesses acquired from Colkit (I think that shows up in the Q3 '97 balance sheet or cash flow statement as "dividends paid".) As of the September quarter it looks like they had a first class cash flow crisis on their hands. Cash had dropped from $27million (Dec '96) to $2.8 million. AR had more than doubled to $13 million. The "receivable from affiliates" line had by 150% to $23 million and accounts payable had grown by about 400% Yikes! On the balance sheet they were carrying "management agreements" at a value of $30 million up from $5.4 million. It also looks like they are sandbagging on their tax rate since they only paid at a 14% for the 9 months ended September. There is also some kind of kooky accounts receivables factoring deal where a private Colkitt company buys EQMD's ARs and sells them off to John Alden Financial. It looks like around 25% of the ARs that ended up with John Alden are uncollectable. Something in the SEC filings about EQMD not being in compliance with the terms of their factoring agreement, don't know if that means Alden has stopped taking them or not. Could account for the cash flow problems. Bunch of board members resigned last summer and now the only outside director is someone that owns a printing business in College Park, PA. Biggest problem is that the float is tiny and the stock is subject to um, interesting, price trading patterns. I'm short the stock, have been for a few months and wouldn't be surprised if it broke down below $10 (if not lower) on the 10K filing. drakes353