TopAnnuity, Warburg in IMHO a very good firm, and while I wouldn't want them to be the underwriter they are fine as a backer.
FastForWord, is the leader in the market, and while this is not a .com, they are, if they market correctly, in a position to grow. The reason for the increase in expenses was to expand from a word of mouth company to a real player. My school district is training 5 teachers @$2000 each to work on FFW. There is also a PER STUDENT royalty payable payable to SCIL. This does have potential.
On the downside I see, their research is still sketchy, and while I have no doubt that the product works on some kids, and so they have greatly limited the way schools can use the program and who they can use it on. They do not want anything but their "tried and true" method, so they can have more sucesses in their data bank. This is a problem because they require a 1.5 hour period daily for 6 six weeks. There are, therfore, only 2 session in an academic year. Also if you factor in the vast number of kids with auditory processing problems who do not have 90 minute attention spans the universe shrinks. I do think that these problems will resolve themselves over time as SCIL get the data they need.
There is also a much cheaper, use at home, program which competes with FFW.
All in all, I think that this may be a defensive position and have a decent pre 90's rate of return or a 3 year period.
JMHO
Larry
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