[Kevin Henry-Seacoast]

I understand he probably has inventory or A/R, but he is negative $2MM, meaning that he probably has liens against all of it.

Kevin is correct, we don't know for sure, but I would guess that everything is encumbered.

Zach,

Not necessarily true. You can have a negative equity balance sheet with unencumbered assets. We see it all the time. The reason the balance sheet is showing negative equity is because of the shareholder note. Most senior lenders would view this as equity as the shareholder note would have to subordinate to the lender. It would still show up on the balance sheet as debt, but so long as it is subordinated behind the senior it is treated as equity.

[AndyYSCISOdept]

Zach,

Not necessarily true. You can have a negative equity balance sheet with unencumbered assets. We see it all the time. The reason the balance sheet is showing negative equity is because of the shareholder note. Most senior lenders would view this as equity as the shareholder note would have to subordinate to the lender. It would still show up on the balance sheet as debt, but so long as it is subordinated behind the senior it is treated as equity.

Agreed....underwriting is a subjective art based on your preconceived risk profile. Leet us fund that which we deem worthy and decline the rest!!