Impact of OIA Deal on ZSUN's bottom line...
1) ZSUN needed strong Cash Flow, as do most Internet start-ups, hence the deal with OIA... Eventually, income from the other operations will catch up with that of OIA... Without this deal, ZSUN would have been hammered into the ground by the SSB's, so one could well say OIA was the Savior of ZSUN...
2) Firstly, let's look at 1999, for which OIA will contribute income for 3 Quarters, which I estimate to be around the $7 Millions mark. Other ZSUN operations should contribute some $2.5 Millions for a total of $9.5 Millions or about 35 cents per share (based on 27 Millions)...
3) A one time windfall sale of a portion of Asia4sale should bring in some $10 to $20 Millions gross, and I am guessing here, probably around $5 to $15 Millions net, which would represent another 18 to 55 cents/share or a total of 53 to 90 cents for 1999. At a PE ratio of 100 (PCNTF is around 180), this give us a $ 53.00 to $90.00 share price or $35.00 without the Asia4sale deal...
4) ZSUN is seriously contemplating, from what I have read in a couple posts, to issue one share of Asia4sale for every ten shares held in ZSUN, as a stockholder Dividend, that should help force the short position to cover...
5) At the end of the first Quarter 2000, the Bonus provisions will kick in and it's quite possible that OIA earn $7.5 Millions more than the original threshold of $2.5 Millions and therefore receive an additional 15 Millions shares, unless the deal is renegotiated. This would result in the outstanding shares numbering 42 Millions, which is not excessive for a Company with the bright prospects of ZSUN...
6) The income for 2000 would then be divided over a larger number of shares and with the Founder of OIA at the helm of ZSUN, there is no reason to expect a slackening in the income Growth of OIA, which should make up for the dilution in shares numbers. With the expansion in the Far East and Europe, it's reasonable to expect that OIA will produce net earnings of some $18 Millions and the rest of ZSUN some $4 Millions, giving us a PROJECTED EPS of $22 Millions over 42 Millions shares or some 52 cents/share, excluding any extraordinary items, such as income from future spin-offs...
Conclusion: These projected figures should only be taken as rough estimates supplied by a Biased and Optimistic Long reviewing ZSUN prospects, in the light of the 10SB for his own purpose... Investors interested in the stock should carry out some extensive Due Diligence, as I am long and likely Biased and remember to only invest what they can lose...
F. Goelo + + +
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