Sack Lunch Productions Inc (OTCMKTS:SAKL) Storms Ahead
Richard Surber is the CEO of Sack Lunch Productions Inc (OTCMKTS:SAKL) and a not-often mentioned fact about him is that he is the nephew of Allen Wolfson – a person who has a rather illustrious history of brushes with the law. In Fact, Mr. Wolfson was instrumental in Mr. Surber’s rags-to-riches type of transition from a shrimper who worked off the coast of Florida to a CEO of not one, but two publicly traded companies.
In addition to SAKL, he is also in charge of Green Endeavors Inc (OTCMKTS:GRNE) which, revenue-wise at least, seems to be doing well. During Q3, for example, Green Endeavors managed to rack up more than $734 thousand in sales. Unfortunately, this doesn’t seem to be enough to lift the stock. The volumes are quite dismal and GRNE is resting peacefully in the murky end of the triple-zero levels.
Like GRNE, SAKL too has spent quite a lot of time failing to attract any sort of significant interest and not that long ago, it was bumbling in and out of sub-penny land. Now though, the statement for the third quarter has put it on the right track. The volumes appear to be growing at a rather rapid rate and so does the share price. Thanks to three incredibly positive sessions at the end of last week, SAKL managed to climb from just over $0.02 all the way to $0.07 per share and many people appear to be convinced that it can continue marching on.
That’s because SAKL really did record some impressive figures on September 30. Here’s a summary:
- cash: $766 thousand
- current assets: $3.1 million
- current liabilities: $6.6 million
- quarterly revenues: $6 million
- quarterly net income: $718 thousand
The sales have seen a massive increase on a year-over-year basis and the profitability is definitely drawing more and more investors in. A recent acquisition agreement might give the company another boost as well.
The balance sheet and the big working capital deficit could scare some people away, but the management team have attempted to cure this with a credit facility provided by TCA Global Credit Master Fund. The agreement will allow SAKL to borrow up to $5 million which will be evidenced by convertible notes. Unfortunately, the Q3 report doesn’t disclose the actual conversion terms of those notes and neither does it say anything about the older convertible debt that was outstanding at the end of September.
We all know that potential dilution can put a rather big spanner in the works which is why, as good as the whole thing looks, an investment should never be done without the right amount of due diligence and risk assessment.
