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Strategies & Market Trends : Bankruptcy Predictor Model -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (134)	3/23/1999 1:52:00 PM
From: Q.	Read Replies (2) \| Respond to of 477

Razorbak, BLWT didn't use convertibles to stay afloat. The last 10Q in October said this: The Company is encountering severe financial difficulties because of the decline in revenue, limited cash resources, recent inability to obtain videocassettes for rental on terms favorable to the Company, and high fixed costs in relation to revenue. ... snip ... Liquidity and Capital Resources - Beginning in the second and third quarters of 1998, the Company's principal capital needs shifted from the opening of new stores to the continuation of operations. The Company funded its previous expansion primarily through cash from operations, advances from Rentrak, and, as more fully described below, borrowings from and sales of stock to Directors, trade credit from suppliers and financing arrangements with asset based lenders. BTW, their Z score is artificially low because the accounting conventions don't allow them to count their inventory of videotapes as a current asset. Therefore the working capital is artificially depressed and the Z score too. I didn't try to figure out exactly how much, though.