Here are the balance sheet and income statement for UFood, which is a micro-cap company that operates a handful of specialty fast food restaurants.
1. This company has $2.71M in current assets on Dec. '09. However,
they have been losing $(3.957M), $(9.875M), and ($5.451M),
respectively in '09, '08, and '07. At that rate, their current assets
would be depleted before this calendar year is up assuming these
What could the company do to remain viable, besides declaring
2. This company has always operated with HORRIBLE NET PROFIT
MARGINS. In their first year, their net profit margins was around
-110%. Regarding this, why and how did the company go public anyways?
3. For this IPO, which raised about $41.98M (I'm basing this on their
volume of 33,055,000 X $1.27 share price on that day), I'm sure that
the senior managers and other key players (i-bankers) all earned about
$4M-$8M, I would guess.
This absolutely makes no sense to me why people would make a killing
off of a money-losing venture like this. Please clarify.
4. What did the i-bankers and investors in this company have to gain
when investing in this financially distressed company? My guess is
that the C-level executives, seed investors, angel investors, and
venture capitalists had an end-goal of going public, because they knew
that they would make $4M-$8M in the IPO. At this point, their duties
are fulfilled, and so was their compensation, and now, they don't
really care what happens to the fortunes of the company since they're
- posted 9 years ago