Val,
why check the institutions, check edgar and you'll find info such as this from a 4/15/97 s-3 fillings.
I think its interesting when palomar's web site plays out like the laser business is its thing and yet contributes so little to the operation. They are a holding company pure and simple.
Far fewer investors on this thread would be crying the blues if they bothered to read the various financial docs on Edgar. Most don't seem to realize what game they are playing in and rely on the PR that companies like Palomar pay to lull the lambs to sleep as they get fleeced.
Please read the last line of the following if you read nothing else...that's where it's at.
Michael
from the S-3 4/15/97 doc.
RISK FACTORS
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND SHOULD NOT BE MADE BY PERSONS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. IN CONNECTION WITH THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, THE COMPANY IS HEREBY IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE PROJECTED IN FORWARD-LOOKING STATEMENTS OF THE COMPANY MADE BY OR ON BEHALF OF THE COMPANY. THE COMPANY ADVISES READERS NOT TO PLACE UNDUE RELIANCE ON SUCH ORWARD-LOOKING STATEMENTS IN LIGHT OF THE RISKS AND UNCERTAINTIES TO WHICH THEY ARE SUBJECT. THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS.
SUBSTANTIAL AND CONTINUING LOSSES. The Company incurred a net loss of
$12,620,768 for the year ended December 31, 1995 and a net loss of $37,863,792
for the year ended December 31, 1996. These losses are expected to continue for
the near term, and there can be no assurance that the Company will achieve
profitable operations or that profitable operations will be sustained if
achieved. At December 31, 1996, the Company's accumulated deficit was
$64,971,200. Dynaco Corp. ("Dynaco"), Star Medical Technologies, Inc. ("Star"),
CD Titles, Inc. ("CD Titles"), Dynamem, Inc. ("Dynamem"), Comtel, Tissue and
Nexar each have had a history of losses. There can be no assurance that these
companies will achieve profitable operations or that profitable operations will
be sustained if achieved. The Company anticipates incurring substantial research
and development expenses, which will reduce cash available to fund current
operations. The Company must continue to secure additional financing to complete
its research and development activities, commercialize its current and proposed
cosmetic laser products, expand its current electronics business, execute its
acquisition business plan and fund ongoing operations. The Company believes that
the cash generated to date from its financing activities; amounts available
under its credit agreement and the Company's ability to raise cash in future
financing activities will be sufficient to satisfy its working capital
requirements through the next twelve-month period. However, there can be no
assurance that this assumption will prove to be accurate or that events in the
future will not require the Company to obtain additional financing sooner than
presently anticipated. The Company may also determine, depending upon the
opportunities available to it, to seek additional debt or equity financing to
fund the costs of acquisitions or continuing expansion. To the extent that the
Company finances an acquisition with a combination of cash and equity
securities, any such issuance of equity securities could result in dilution to
the interests of the Company's shareholders. Additionally, to the extent that
the Company incurs indebtedness to fund increased levels of accounts receivable
or to finance the acquisition of capital equipment or issues debt securities in
connection with any acquisition, the Company will be subject to risks associated
with incurring substantial additional indebtedness, including the risks that
interest rates may fluctuate and cash flow may be insufficient to pay principal
and interest on any such indebtedness. The Company continues to investigate
several financing alternatives, including strategic partnerships, additional
bank financing, private, debt and equity financing and other sources. While the
Company regularly reviews potential funding sources in relation to its ongoing
and proposed research projects, there can be no assurance that the current
levels of funding or additional funding will be available, or if available will
be on terms satisfactory to the Company. Failure to obtain additional financing
could have a material adverse effect on the Company, including possibly
requiring it to significantly curtail its operations.
HOLDING COMPANY STRUCTURE. The Company has no significant operations
other than those incidental to its ownership of the capital stock of its
subsidiaries. As a holding company, the Company is dependent on dividends or
other intercompany transfers of funds from its subsidiaries to meet the
Company's debt service and other obligations. Claims of creditors of the
Company's subsidiaries, including trade creditors, will generally have priority
as to the assets of such subsidiaries over the claims of the Company and the
holders of the Company's indebtedness.
LIMITED OPERATING HISTORY; RECENT ACQUISITIONS. Many of the Company's
subsidiaries have limited operating histories and are in the development stage,
and the Company is subject to all of the risks inherent in the establishment of
a new business enterprise. Historically, most of the Company's revenues have
been generated by its flexible circuit board component business; however,
Spectrum Medical Technologies, Inc. ("Spectrum"), acquired by the Company in
April 1995, contributed 8.7% of the Company's revenues in 1996. Nexar
contributed 26.4% of the Company's revenues for the year ended December 31,
1996. The Company acquired Comtel Electronics, Inc. ("Comtel") in March 1996,
and Tissue Technologies, Inc. ("Tissue") in May 1996. Comtel has contributed
23.8% of the Company's revenues and Tissue contributed 14.4% of revenues for the
year ended December 31, 1996. Nexar, Comtel and Tissue
<PAGE>
7
have had limited operating histories. The likelihood of success of the Company
must be considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with the
establishment of a new business and development of new technologies in the
cosmetic laser products and electronic products industries. These include, but
are not limited to, government regulation, competition, the need to expand
manufacturing capabilities and market expertise, and setbacks in production,
product development, market acceptance and sales and marketing. The Company's
prospects could be significantly affected by its ability to subsequently manage
and integrate the operations of several distinct businesses with diverse
products, services and customer bases in order to achieve cost efficiencies.
There can be no assurance that the Company will be able to successfully manage
and integrate the operations of newly acquired businesses into its operations or
that the failure to do so will not increase the costs inherent in the
establishment of new business enterprises.
RISKS ASSOCIATED WITH ACQUISITIONS. Since going public, the Company has
acquired seven companies. In the normal course of business, the Company
evaluates potential acquisitions of businesses, products and technologies that
would complement or expand the Company's business. Promising acquisitions are
difficult to identify and complete for a number of reasons, including
competition among prospective buyers and the need for regulatory approvals.
Acquisitions may result in the incurrence of additional debt, the write-off of
in-process research and development or technology acquisition and development
costs and the amortization of expenses related to goodwill and other intangible
assets, any of which could have a material adverse effect on the Company's
business, financial condition, results of operations and cash flow. Acquisitions
involve numerous additional risks, including difficulties in the assimilation of
the operations, services, products and personnel of the acquired company, the
diversion of management's attention from other business concerns, entering
markets in which the Company has little or no direct prior experience and the
potential loss of key employees of the acquired company. In order to finance
acquisitions, it may be necessary for the Company to raise additional funds
through public or private financings. Any equity or debt financing, if available
at all, may be on terms which are not favorable to the Company and, in the case
of equity financing, may result in dilution to the Company's stockholders. |
