Just to clarify the financing arrangements.. as I understand...

Just to clarify the financing arrangements.. as I understand it:

- The factoring facility is working satisfactorily ($10m one year credit facility secured by accounts receivable)
- A new Mezzanine working capital facility is in the process of being finalised for $4m
- $5m purchase order financing facility is not yet activated (why? would be good to know)

In order to pay the factories they require 1.5-2 immediately, so they presumably have at least 11.5-12m in orders as the factoring facility is working??

To resolve this problem they have entered into an agreement with MFC to provide this shortfall in funding. There are serious consequences for not repaying these funds by 15th Nov. however management are confident that either the new funding facility or the PO/LC will kick in in time to make that a non-issue... we'll have to wait and see I guess.

So, as I see it - this short term funding is a problem, however management are doing all the right things to resolve it, while at the same time we are certainly getting strong orders and business is good... Also if they have exhausted the $10m factoring facility does that mean they have spent $10m on manufacturing... so they would have orders well over $10m??

Anyone have alternative opinions on the above?