Sen Yu Intl (OTC BB:CSWG)

Added to the GeoSpecial list on February 12, 2010 @ $4.10

Catalyst: Reported a strong 2010 first quarter.
Peak performance: Reached a high of $9.00 on February 18, 2010
Current Price: $6.35 (Has a wide bid/ask spread).
 
Current road block: Company may have to raise capital as cash balance is only $3.3 million and 2010 cash flow from operations is tracking at around $4.0 million;  We need to delve further into the capital structure and investigate the 81.9% increase in the diluted share count from the 2010 first quarter to the 2010 second quarter;  Gross margins will have little room for expansion.

Removed from the GeoSpecial list until we gain a better grip on capital structure and liquidity requirements.  We were impressed that the majority shareholder, Ligang Shang, agreed to cancel his loan which could signify confidence in the business plan

"After our founders made the initial contribution of our registered capital, the growth of our business has been funded, primarily, by the revenues resulting from our business operations, by loans from the Chinese Government’s Financial Bureau and by loans from our shareholders. We did, however, owe $11,167,236 to our majority shareholder, Ligang Shang, representing funds he loaned to Advanced Swine during our development period. At the quarter ended September 30, 2009 , however, Mr. Shang agreed to waive his right to collect that sum, and contributed it to the capital of the Company. Accordingly, our working capital increased by the amount of the cancelled loan, as did our paid-in capital."

Need for capital is on the table:

"We believe that we have sufficient funds to operate our existing business for the next twelve months. However, in addition to funds available from operating and loans from shareholders, we may need external sources of capital for our expansion of our facilities and to increase the roster of our franchisee farmers, in order to reach our goal of producing one million commercial hogs in 2011."