Good morning! Another quiet day for small cap news, which is handy as that gives me time to properly research Avation (LON:AVAP) ,whose FD is visiting my Brighton Investor Group tonight to give a talk about the company. We're fully booked, although I suppose one or two more could be squeezed in, although it's awkward because our usual section of the restaurant comfortably seats about 25, and when we go over that we get into a halfway house situation, where we over-spill, but not enough to have the entire restaurant to ourselves. Ah well, I'm sure it will be fine. It's really good that we've managed to generate enough interest to establish an investor group on the south coast, so thank you to everyone who supports these evenings.

Teg (LON:TEG)

It's bad news for shareholders here I'm afraid, as the shares have been suspended today, with the dreaded phrase highlighted below;

The Group has requested the suspension of trading of its shares on AIM pending clarity on its financial position.

As @MrContrarian correctly said this morning on Twitter, "Companies rarely recover from this stage."

It's usually a good idea to look at companies which go bust (this hasn't yet, but it looks on the verge of it) to check whether you spotted the warning signs. In this case, it's obvious that things were going badly wrong. The narrative to the interim accounts published on 30 Sep 2014 made it clear that the company needed additional funding.

Also, the Balance Sheet shows that cash had almost run out, plus there was debt on top of that. Yet again though, the big "tell" is excessive debtors, which we discussed yesterday. In this case, debtors of £8.5m (compared with only £5.6m turnover for the six months to 30 Jun 2014) clearly indicated that something was badly wrong - if customers can't or won't pay for goods/services that have been billed, then you run out of cash, which seems to be what's happened here.

The cashflow statement also shows a worsening position.

I see that Peter Gyllenhammar owns 20.1% of the company, so maybe he'll sort out some kind of rescue refinancing? It's difficult to imagine that shareholders would be prepared to stump up more cash, without agreement first being reached with customers over the disputed contracts. Some sort of compromise deal…

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