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Technology Stocks : Forecross Corporation : Y/2000 -- Ignore unavailable to you. Want to Upgrade?

To: Rick Voteau who wrote (1057)	6/1/1998 7:42:00 PM
From: Richard Moore	Read Replies (4) \| Respond to of 1654

Forecross has cleverly decided not to post its latest financials on its site (you will soon see why), but they are available through the B.C.Securities Commision (http://www.bcsc.bc.ca/). Its press release boasts of increased sales to $2,121,000 for the second quarter and a sales backlog of at the end of the quarter of $2,510,000. (By the way, these sales are even less than the quarter ended June 30 /97 which were $2,346,000!) As to the backlog - WOW! Last quarter it was announced in the press release as of Dec 31 to be $3,395,000. It's now $2,510,000, as of Mar 31/98 - a reduction of over $800,000. Summary of results to date: 1996 loss ($461,000) 1997 loss ($851,000) 1998 loss ($1,100,00) for the first half of this fiscal period only The real story emerges when you look at the second quarter statements: 1) Current liabilities are now up to $4,090.783 with current assets of less than $300,000 (I don't count unbilled receivables.) 2) The unbilled receivable is now $2,642,259 included in the total receivables of $2,739,182. (This means that only $100K of the receivables have been billed!) You have got to be kidding! Unbilled receivables are up $538,000 over last quarter! Are unbilled receivables counted as sales and included in the press release sales? 3) Forecross has factored all their receivables and now owe $564,000 at 24% to the factor. Billed receivables are less than $100,000. What will happen when the factor wants his money? 4) Accounts Payable are now a whopping $747,000 (this may not seem high but when you have a $100,000 cash and owe someone who has factored all of your receivables, you are in deep do-do!) 5) Sales seem to include the revenue from selling distributorships as well as the revenue earned by the distributor. There is $1,095,717 owing to the distributors which has not been paid. Are they running a higher gross through sales to drive a higher sales number and then setting it up as an expense and deferring payment? Questions: a) If sales are going to increase, why is the sales backlog down $800,000? b) How will the payable to factor of $564,000 be paid with less than $100,000 of receivables to collect? When will the factor demand payment and force chapter 11? c) How long can a company with negative cash flow (now over $800,000 a quarter) hold off its creditors? d) With $575,000 of notes owing to an officer @24% and $564,000 to the factor @24 % what will interest expense be next quarter? I realize that I will accused of putting out lies and half-truths and distorting facts. (All these numbers come from Forecross' published financials.) Then someone will say that the past is not relevant -the future of this company is around the corner. Around the corner is unfortunately a black hole. Forecross will be put into Chapter 11 by one of these creditors within weeks or the promoters will be forced to sell a pile of shares into the market and put that money into the company to stave off the bills outstanding. How you and others can say that these results were as expected is unbelievable. Perhaps all should read postings to this site made throughout 1997. Even as late as December you and others were predicting huge profits for this quarter! I would like to hear from some of Forecross' creditors on this site to see how things are going. I think a first hand comment would be really interesting. Are there any creditors out there who could add something to this? The stock price will soon reflect the true value of Forecross. Just wait until June 15.