Increased financing risk at Trakopolis (Quote, Chart TSXV:TRAK) has Echelon Wealth Partners analyst Ralph Garcea trimming his price on the stock. On Tuesday, TRAK reported its Q2, 2018 results. The company lost $1.1-million on revenue of $1.6-million, a topline that was up one per cent over the same period last year. "The second quarter of 2018 focused on expanding our solution offering, working with our channel partners on continued business development and progressing our enterprise sales funnel," CEO Brent Moore said. "This positions the company well for the remainder of 2018." Garcea says Trakopolis missed both his topline and EBITDA estimates, despite the fact that the company's gross margin was a "robust" 53.7 per cent against his 52 per cent estimate. The analyst says TRAK's balance sheet gives him pause. "Net Debt at Q2-end was $2.6M versus $1.4M q\/q," he notes. "Cash at Q2-end was $1.6M and TRAK is $1.8M drawn on its US$3.5M credit facility with Silicon Valley Bank. While TRAK is onside with its covenants, we view the liquidity crunch as a negative with respect to funding its working capital ramp-up and as such have adjusted our PT on the increased near-term financing risk. We believe the Company will have to scale back operations accordingly should it not be able to find incremental working capital financing, thus leading to a near-term revenue risk as well." In a research update to clients Wednesday, Garcea maintained his "Speculative Buy" rating on the stock, but cut his one-year price target from $1.50 to $1.00, implying a return of 39 per cent at the time of publication. Garcea thinks TRAK will generate Adjusted EBITDA of negative $2.2-million on revenue of $7.0-million in fiscal 2018. He expects those numbers will improve to EBITDA of negative $100,000 on a topline of $9.5-million the following year.