Raja,
I'm just curious what has made you bullish on this company. I watched a Business TV segment on International Hi-Tech which is how I came to be aware of the company.
Having done some research on the company, there were far too many redflags that I found. I don't know if you had the opportunity to read the article that I posted clearly indicating that regardless of whether or not there is wrong doing, IHI is/was being investigated by the BC Securities commission. The article goes so far as to label the CEO a "controversial reporter".
Granted, I realise that the reporter in question doesn't have a very good track record for recording facts in my book, but clearly something is amiss -- and there is likely some kernal of truth in the matter.
But here are some of the items that really turned me off on IHI:
- there are significant competitors in the new field of alternative construction materials -- ranging from American Home Products to Royal Group Technologies -- both with significantly more capital to fight for market share
- there continue to be significant delays in getting their construction facilities up and running
- they do not have a big name auditor
- they appear to continue to need financing to fund their development costs and continued operations -- read dilution
- there are far too many related party transactions (major red flag); for instance, a member of management, I would guess being either the CEO or some other person in senior management, was paid $54K -- translating to $216,000 for "project management fees" plus any salary that they are getting on an annualized basis; note that this is ridiculous considering that their salaries should already include their project management and the fact that they are consistently late on their projects
- and then there is the subsidiary that shareholders only own 72% of and that would be sold to shareholders on a "best efforts" basis; this being a subsidiary that holds the technology rights for outside of Canada -- this deal stinks to high heaven because of the unknown true intentions of management, and given that it appears that shareholders will be diluted out of this subsidiary, the question is whether IHI will be able to generate enough profits from Canada alone -- and I would suspect no.
Just a point of disclaimer, I own no companies except for Onex (because of their stake in American Home) who could be construed to be alternative construction material manufacturers in competition with IHI. I was interested in purchasing Royal Group but am wavering for a variety of other reasons.
But my question stands, I'm not quite clear as to what makes this company attractive other than a few promises by management -- who to date have not been consistently forthcoming in the latest in-feuding that involves the BC Securities Commission.
Clement |
