GDNP tiny size adds risk, and it still has $25M debt. Cash flow was positive in the recent 12 months, but only $3.3M. Sales growth has slowed, and the last quarter was weak. It plans a shift to more industrial packaging. It also announced an auditor change, which can sometimes be a red flag. Creditors waived some covenants earlier this year, indicating how tight things are at the company. We would consider it quite high risk. It needs to improve sales, cash flow or sell assets, or raise some more capital. All this is 'possible' of course, but an equity raise would be dilutive at current prices, and there is no guarantee of any improvement occurring. We would not consider it very attractive. BU is even smaller at $17M. It has less debt, but losses and negative cash flow continue. Sales are essentially nil. It did raise money in the 2Q. It has some decent partnerships, but with cash burn of $6M it is going to need more capital. The share count has more than doubled in eight years. It probably has a better chance to 'survive' but we can't endorse it either. In both cases it is going to be a big challenge for the management teams. Solvency issues often prevent a company from doing what is best for it, as all eyes focus on just getting to the next quarter.
5i Research Answer: