must read DD from RB: jim
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By: TelecomMan
Reply To: None Saturday, 31 Jul 1999 at 10:19 PM EDT
Post # of 2385
DRGI STOCKHOLDERS AND POTENTIAL INVESTORS PLEASE READ THIS!
This is the latest info and DD available and is being reposted for the benefit of those that are tired of reading the spam and negative comments on this board.
#1-A post on SI indicated that after hours trading left DRGI at .145 on Friday. We shall see if there is a gap up on Monday.
#2-From Raging Bull site
www.ragingbull.com/mboard/boards.cgi?board=DRGI&read=2210
Pettycash Stock Picks -
First of all let me tell you that currently I have no position in DRGI... I have bought in at .09 out at .12, in again at .18 out at .16..
So I have basically broke even.. But I will be looking for a good entry point on Monday morning... And after reading this, I beleive you'll understand why I am getting back in...
I had numerous conversations with several people concerning DRGI on Friday. I asked Mr. Carl Smith, Sr exactly what his intentions were concerning the posting of the Audited statements on the website and the release of the pr on Friday afternoon. He stated that his intentions were to "make absolutely sure there were no mis-understandings of the source of the large EPS" and that "given everything that would be released on DRGI in the coming weeks he did not want anyone to be able to question the intregrity of management."
If you would like some clarification of the Cpa firm flap and a general understanding of "income from debt restructering", click here www.ragingbull.com/mboard/boards.cgi?board=DRGI&read=2203
I have a source that is outside of management and has proven he knows what is going on with the company. From
discussions with him today here is a brief summary of what to expect from DRGI in the coming weeks:
-Monday morning at or before the opening bell the company will release a pr stating the company has signed a contract with a NC LLC to purchase 607 acres of land in the Research Triangle area of Raleigh NC. The purchase will be closed in December of 1999, due to the original purchase by the LLC that called for them to hold the prop for one full year. The company will develop the property and sale parcels for a Golf Course, Hotel, residentail areas, etc... The parcel sales will be ongoing for the next 5 years and will net the company 5 mill a year.
-The company has committments from several big name developers and they will release pr's as the final deals are signed for the land sales.
-The letter of intent that was released early in this week has been finalized and should be made public in the coming days..
-They are in negiotions for more contracts with the battery division. One in particular is a very large deal and could be finalized as early as next week.
The company is, through the land deal, basically guaranteed 5 mill in cash flow a year it was stated to me that with in the next two weeks we would know what they planned to use the cash for!!!!
Congradulations to those of you that had the foresight and the kohounos to hold on to your shares during this very turbelent trading day!! For the rest of us, Monday will provide another opportunity to get back in.. Let's hope it doesn't gap in the am on Monday and we can still get in at this great level.....
God Bless, Good Luck and as always Good Trading...
pettycash
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#3-CPA flap and Audited financials...
First let me state my background... I am a cpa,
though not currently licensed (too expensive for
sole practioner) I have worked for BDO Seidman in
the Eighties and have owned a small accounting
practice for ten years...
The relationship between The auditors that signed
the opinion letter and the "6th largest firm" is
as follows: it is a joint venture where they share
education, referrals, multi-location audits, and other resourse, etc... unlike an Auther Andersen that is just one huge firm...That is why you have a different name on the op letter..The op letter is extremely important... If their was any monkey business going on the accounting firm would be held liable.... Much like a doctor can be sued for malpractice....
Income from the debt restructure is in accounting lingo an "extraordinary" item... meaning simple that investors should not rely on it for future earnings because by definition it is a one time occurance.. unlike income from
operations which would be ongoing from year to year...
The calculation is made like this (numbers are not real just pulled from thin air) CO X owes CO Y 8 mill and can't pay... Co Y takes 2 million shares of co X stock with current market value of $1. On their financials, CO X wipes out the 8 mill in debt, transfer 2 million to stockholders equity to record the new shares and the 6 million remaining goes into income as "Income from Debt REstructering" an extraordinary item...
Hope this clears the air, their is no phoney baloney numbers or "creative" accounting going on.. Everything was
done according to GAAP (generally accepted accounting principles) just like the auditors said!!!
pettycash
#4-Just had a 45 minute in depth discusion with Carl Smith. Several MAJOR NEWS releases to come steadily over next few weeks!!!
They will soon have 3 major profit centres of which details will follow in future PR!
Profit centre #1: Real Eastate Division.
They acquired property in North Carolina which contains 1600 lots. The deal has CLOSED. Financing for property done through issuing restricted and free trading shares plus cash. However, they can not recieve title to the property until Dec 01/99---this was part of the purchasing agreement with the prior owner of the property. DRGI have already securred commitments for 1200 lots at an average price of approximately $60,000/lot. Cheques can start being cashed after they recieve titile.
Presently, Hilton is in contract talks to built a 280 room Hotel Resort on the property.
Chrchhill & Banks has 1st right of refusal with DRGI to develop a 20 acher commercial complex.
A golf course developer has contracted with DRGI to build a new golf course!!
Drecker & Folk have signed 1st right of refusal with DRGI
to build a complex of 80 appartments.
Financing was arranged with the Bank of Boston and is closed!!!
THE REAL ESTATE AQUISITION WILL GIVE DRGI ASSETS OF
OVER $30,000,000. Net income is expected to be $5,000,000 per year for the next 5 years!!!!
Earnings per share for the real estate aquisition is expected to be approximately $.06/share for the next five years based on 85,000,000 share o/s!
Profit Centre #2: Battery Division:
THE PREVIOUSLY announced intent for PrePaid Cellular Solutions, Inc. of Melbourne, Florida through DRGI's wholly owned subsidiary, Cordless Power Corporation is
EXPECTED TO CLOSE WITHIN DAYS!!! PR WILL SOON BE OUT!
Under the Agreement, PrePaid Cellular Solutions will purchase cellular telephones and accessories exclusively from Cordless Power Corporation for distribution to its growing network of prepaid cellular customers.
Cordless Power Corporation is completing the packaging, design and equipment needed to supply the prepaid cellular phones, leather phone cases, high capacity cellular batteries, and cigarette lighter rechargers for distribution by PrePaid Cellular Solutions, Inc. to their retail customer network.
"Gross sales are projected to exceed $1,500,000 per month within the first 120 days of the project ramp-up,'' stated Mr. Chris Beck,President of Cordless Power Corporation.
MARGINS ARE IN EXPECTED TO BE 33% (conservative). Revenues expected to begin Aug 99.
Yearly Expected Net Income is $6,000,000. Forecasted earnings for this profit centre is $0.07/share based on 85,000,000 s/o.
Profit centre #3: Pack Shacks--Battery Kiost
A PR REGARDING THIS PROFIT CENTRE IS EXPECTED 2-3 weeks.
Pack shacks are fully inventoried, kiost that are equipted with a computer that accepts payment. The kiosts will be
fully inventoried with cellualr, laptop, "AAA/AA/A type batteries.
DRGI is able to obtain its line of batteries at factory direct prices.
Kiost sell for $30,000 each with 33% (10,000) profit margin. There are several distributors already lined
up.
100 kiosts sales over 12 months is a very conservative target!!!
Net earnings expected to be $10,000,000/year.
Earning per share expected to be approximately
$.12/share based on 85,000,000 o/s.
Profit Centre #4: HIV tester.
DRGI owns the patent and this revolutionary testing device.
Retails $2/tester. DRGI cost is $0.50/tester.
Qunitiles Transnations (QTRN), a $5 billion dollar company, is currently negotiating with DRGI to potentially buy-out this profit centre from DRGI. This makes sense since DRGI does not have the pharmaseuticals resources or competentcies to market themselves. Financing for the
aquisition of this HIV tester and patent is to be through DRGI issuing restricted shares to the selling company (not disclosed yet). This is why I use 85,000,000 s/o in my calculations. Shares will be resticted from trading for 1-2 years.
Other information:
Form 10 to become a fully reporting company has been
filed with the FCC already. The FCC had questions and
asked for explaination. DRGI recently re-submitted
with clarifications!!! DRGI is way ahead of schedule and
will be a fully reporting company anytime now.
Several Institutional investors including HM Myerson, Payne Weber, Charles Swabb, and Corporate Securites Group among many more were in touch with DRGI today!
ALL THIS IS ON TOP OF DRGI's CURRENT REVENUE STREAM GENERATING SIGNIFICANT EARNINGS.
DRGI's current and past revenues from Data One whos name was recently changed to DRGI. Data One sold microchips with revenue in excess of $50,000,000 during 1998. Moreover, DRGI also has a steady revenue stream from it's
battery sales division.
1998 audited net earning were .17/share.
Future Profit Centres: DRGI is currently is reviewing other potential aquisitions of which details are limited at this time.
In Conclusion:
DRGI appears to be tremedously undervalued at current levels (.18)even after the big run-up today.
Over next 2-4 weeks, several HUGE PR's expected.
Presently, DEBT-FREE, profitable with several millions in cash in the bank.
DRGI is a fully reporting company now.
Stong Management team committed to building a solid company and shareholder value.
I hope this DD helps. Call 941-923-1949 to do your own DD
and recomfirm any of the above.
pettycash
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
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