Yep that bad debt in associated with a/r.. they booked the allowance against the receivable to reflect net receivables as an estimate then obviously later decided to expense percentage of the allowance as bad debt.. i think this was a one time occurrence. Same with inventory writedowns but affected cogs.. cogs increased regardless of obdolete inventory was sold or not. So we saw a double whammy there. It decreased our assets and increased our cogs lowering gross margin number. So imo if the company needs to implement stricter credit policies and implement better inventory control procedures because these assets make up a large portion of current assets.the most liquid assets on bal sheet. I remember a post I wrote over on ithug weeks ago that my concerns would be in the area of notes to financials with concentration on receivables and inventory valuations, as you see they were critical to the financials. I also believe that a huge percentageof g/a expense was a one time occurrence. Take into account the receivable and inventory valuations as well as g/a exp which all affected the bottom line tremendously accounted for the majority of the companies net loss.. going forward we will be profitable!!! Yesssss .. gooo the new talk!!!