Forecasting, page-13

I don't think lynching WP actually achieves anything. Am I happy with what went down in past quarter - No I am not. However in looking a little less emotionally at the numbers I think that replacing WP right now would just sink the company.

The sales are increasing . We seem to be able to agree on that - Not really fast enough but there are approvals and the like to get things done. Not all of it is controllable.

I hate 4c's they just take cash movement which can amplify and distort events. For example entering new sales areas tends to have longer credit terms and thus there is a lag between what we would call sales and the 4c deems sales.

Yes we are not getting what WP told us we would get and I hope he does the right thing and takes a salary rebate until the numbers hit the right mark. So should all the executives - It wont save a lot but it would bring the two camps together.

I think that we are all disappointed but at the same time I like how WP has expanded the product range and got the manufacturing performing better. What we haven't fixed is the costs to turnover. Really the bottom line is manufacturing is costing around 50% of the sales line ( There may be a clue to turnover growth lying in that ratio - in that the past quarter the manufacturing costs around $500K but the sales did not match that increase - so it could be in stock or accounts receivable...) What kills us is then the sales line which is around 80% of sales so added together for each $1 sales we lose 30c before admin and other costs like R&D etc. Again sales line has jumped this quarter and that is another hint that we are seeing leading indicators work against us because cash flow income always lags direct expenses and is amplified in product launches. This is also amplified when you are the manufacturer as you have to fund all the stages...

So really yes there is a delay , plus there are expenses we are incurring but really this is now in the position where within the next 12 months they will have to get the company sales force to match the turnover and get the business to break-even at least.

There are serious issues but really the fact is there are multiple products that we can actually make a gross margin on vs previously having manufacturing kill us. Our Achilles heel is that we may run out of cash and the last gasp funding that we may have to get on-board may be hugely dilutionary.

I am prepared to let my money ride and I would even be prepared to take up some convertible notes if I could have at least another quarters insights...