The 10k was filed yesterday. If you don't like to see ugly things, don't look.
* Loss for 1998 soared to $30 M.
* Cash used in operating activities was $18 M.
* Cash on 12/31 was a mere $1.2 M.
* Working capital on 12/31 had dropped to $4 M.
The latter amounts to only 2.6 months of cash burn.
Now you can see why they did the toxic convertible. They had 2.6
months before they were out of working capital. That would have been
a month ago. So most likely in mid April they had a working capital
deficit. If they hadn't done the convertible deal pronto, they would
be bankrupt.
Turbothingie sales were not $200 M as Halimi was predicting early in
1998. Nor were they $100 M, as he was predicting in midsummer. Hey,
they weren't even $1 M. Here's the data:
The business segments are summarized as follows:
1998 1997 1996
------------ ---------- ----------
Sales to external customers:
Aftermarket wheels ........... $ 13,848,000 20,691,000 8,560,000
Automotive engine components . 26,287,000 18,474,000 5,384,000
Turbodyne products ........... 723,000 -- --
Moreover, not even the light metals division is profitable:
Loss from operations:
Aftermarket wheels ........... $ (341,000) 570,000 (464,000)
Automotive engine components . (2,867,000) 752,000 (74,000)
Turbodyne products ........... (23,962,000) (13,465,000) (5,400,000)
------------ ----------- ------------
$(27,170,000) (12,143,000) (5,938,000)
============ =========== ===========
Next, the auditor gave a going concern qualification in their report:
As more fully discussed in
Notes 12 and 13 to the consolidated financial statements, the Company has
suffered net losses in each of the last three years resulting in an accumulated
deficit of $54,269,000 at December 31, 1998, has used cash in its operating
activities in each of the last three years, has violated covenants of its debt
facilities, has received an adverse award and a judgment in the aggregate amount
of approximately $7.1 million related to an arbitration matter and a building
lease, respectively, is subject to several class action lawsuits brought against
it by certain of its stockholders, and based on the Company's projected cash
flows for the ensuing year it will be required to seek additional equity or debt
financing in order to continue its present operations, irrespective of amounts
to be paid, if any, in connection with the aforementioned adverse award and
judgment and class action lawsuits. These matters raise substantial doubt about
the Company's ability to continue as a going concern.
The co. was hit with an arbitration award for $6.65 M last month. I
don't remember hearing about this before. They certainly didn't have
the cash to pay this award.
Finally, there are now 41,963,816 shares outstanding. Anybody who is
hoping for a $10 stock price should try to explain to themselves why
this piece of junk is worth $420 M.
This was a penny stock in Vancouver, and that's what it deserves to
be today.
Why, oh why, did I cover my short last December? |
