SACM is drowning . . .
edgar-online.com
Here are the highlights:
SACM reported three month revenues of $14,738 against costs of $862,221. Cash on hand: $131,580. Cash and equivalent burn rate for last three months: $337,160. Not surprisingly, the SEC filing notes that SACM is expected to be out of money in September unless there is additional financing and "The company believes operating losses will continue for the foreseeable future." SACM estimates it needs $3-4M to stay in business to June 30, 2000, and any additional financing to get there will result in "substantial" dilution . . . I estimate it could about cut present stockholder equity in half.
SACM's one big asset is an entry of $900,000 for an "unrealized gain on available-for-sale securities." Huh? It turns out that SACM is part owner (600K shares) of a newly reverse-merged OTC:BB company (Inter-Con P/C, trading as of June 1999), and although SACM holds restricted shares locked up until June 2000, it used the OTC market value for Inter-Con without discounting for the restrictions, the limited public market for the BB stock, or its large bloc holding. To get an idea of how phony this valuation is, the SEC filing also notes that a SACM stockholder in February acquired from SACM 600K shares of Inter-Con for only $90K. (Looks like Wendt has moved on to a new stock sale scheme.)
In May SACM started laying off workers and reducing salary expenses, and in August left its leased premises for a cheaper place. The company did not include the ongoing 3 year lease obligation as a debit in its report, although the old place hasn't been subleased and SACM is still on the hook. Finally, the company has delayed a new product launch until 4Q99.
SACM stock is now selling for under $1 per share. Anyone remember how it started out a couple of years ago at about $15 per share and about a $100M market cap -- almost the size of IDX? |
