While I don't agree that the company should even consider a share buyback until it is profitable, I would like to clear up a misperception regarding it. Although the company is not profitable, they are still eligible to perform a buyback based on Delaware Law as profitability is not the determinant of being eligible for a share buyback, but "an impairment of capital" does determine eligibility.

Refer to the following Legal interpretation:

[i]Title 8, sections 160 and 170 of the Delaware code allow a corporation to purchase its own stock or issue dividends, provided that such transactions do not result in an impairment of the corporation’s capital. A transaction impairs capital if the amount of the distribution exceeds the amount of the corporation’s “surplus.” Klang v. Smith’s Food & Drug Centers, Inc., 702 A.2d 150, 153 (Del. 1997). “Surplus” is defined as the “excess of net assets over the par value of the corporation’s issued stock.” Id.; Del. Code, tit. 8, § 154. “Net assets” is further defined as “the amount by which total assets exceed total liabilities.” Id. Thus, the funds available for a lawful redemption or dividend are calculated as follows: funds available = total assets - total liabilities - par value of issued stock. If the amount calculated is less than the amount distributed, then the transaction is unlawful, and directors who willfully or negligently conducted the unlawful redemption are jointly and severally liable. Del. Code, tit. 8, §§ 160, 174. [/i]

http://www.mmmlaw.com/assets/files/article_347.pdf

If you take the figures from SFMI's latest 10K and apply the formula:

Assets: 6,242,304
Liabs: 5,694,277
Par Value: 41,986

You get a "surplus" of $506,041 which, if my figures are correct, this allows the company to perform a share buyback under Delaware law should they choose to do it. However, after the last round of dilution, a share buyback would be a terrible decision IMO.