Activecare, Inc. (OTC:ACAR) has been putting up some performance over the past month, since the company received a funding commitment from a European investment group. According to the deal, the first $2.5 million should fill their balance sheet this week.The commitment entitles ACAR for up to $7.5 million in funding and one third of the sum was to be transferred within 30 days after the deal was made. The time is nearly up and no official notice of funds transfer has yet been issued.[BANNER]
Without the cash, ACAR would look like an ordinary penny stock – heavily leveraged and not able to cover its short term liabilities. The bottom line also suffers from the high interest payments, which are sure to go further up when the new funding is provided.
Nonetheless, the money in the bank raises the company’s credibility. Although the recently increased SG&A totaled $2 million on their own, this increase was only temporary and part of the amount was not even cash and carried high costs of consulting.
The initial funds would allow Activecare to proceed with their business plan for more than a year, considering the most recent cash flow of ($733 thousand) for the nine moths ended June, 2010.
