Long-term debt serves to effectively increase the valuation of a company, making any assessments that take only the stock into account preliminary at best. Every dollar of long-term debt effectively reduces the potential market capitalization of a company by an equal amount as it converts part of the total capitalization of the company from equity to debt. Preferred stock and convertibles that pay interest should be considered debt as well for purposes of calculating the value. Cash and short-term investments have the opposite effect on the value of a company, decreasing the effective price to an acquirer. It is this principle that made the leveraged buy-out so popular in the '70s and '80s, when predatory investors would finance the acquisition of a company using the very cash the acquired company had in its bank account.
Enterprise value takes both debt and cash into account.
To call this company a small-cap would be pushing the boundaries of ludicrous, given the immense amount of debt that it currently holds. Anyone who took into account the debt would quickly see the value here is illusory and that a large part of the potential upside in the shares has been eaten up by the debt the company holds. Simply put, a large debt load is bad. Although it is true that no company ever goes bankrupt due to the debt, by converting potential equity value into debt, a company robs the shareholder long-term to finance current growth. Additionally, when debt gets onerous enough that it gobbles up a good part of cash flow, a company ends up treading water while a similar company without the debt would be growing aggressively.