>>Maybe it is the start of something good.<<
Yes, hope springs eternal.
I have around 6000 shares, but hold it for entertainment value only.
In retrospect, it would be educational to discuss what went wrong. OK, the big Y2K mad rush failed to materialize. However, other factors contributed as well.
For example, regarding cost containment, why did they expand prematurely onto another floor at their San Francisco location? Did they get poor advice from the consultant firm they paid big bucks? Also, I heard rumors their "partnership agreements" backfired as the "partners" would review Forecross bids and offer their own bids for the same job at a lower price. Is there a germ of truth somewhere in that?
Anyway, the reality is grim. For the year ended 9/99, revenues fell 52% and net loss amounted to $.23 per share. I expect little real upward price movement based on the following snippets from their last quarterly report. It appears FRXX needs a bucket full of $2M contracts to turn matters around (e.g. pay off its debts).
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SNIPPETS...
"Year 2000 services and related revenue increased from 42% in fiscal 1997 to 62% of our total revenues in fiscal 1998 and 88% of total revenues for the year ended September 30, 1999. Should the demand for our year 2000 solutions and products decline significantly as a result of new technologies, competition or any other factors, our professional services fees and license revenues would be materially and adversely affected. We anticipate that demand in the year 2000 market will decline, perhaps rapidly, following the year 1999."
"In order to provide cash for continuing our operations we commenced the sale of common stock through a private placement. A portion ($100,000) of the expected total funds was made available in December 1999, and additional funds should be received in January 2000. Although we are offering up to $1,000,000 of stock in this private placement, it is uncertain how much additional cash we will be able to raise, and whether such amounts raised will be sufficient to fund our short-term working capital needs."
"The Company has not historically been profitable, and as of September 30, 1999, we had suffered cumulative operating losses aggregating to $10,723,000, and at September 30, 1999, we had a net capital deficiency and a net working capital deficiency. These conditions raise substantial doubts about our ability to continue as a going concern."
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Maybe there is a future for Forecross in the XML technology arena. FpML is moving right along, snowballing into an unstoppable force. Recently the FpML steering committee is asking for membership in their Products and Architecture Working Groups.
Despite Forecross' announcement of their involvement, are they truly involved in this new technology? What have they done so far? Do they even have capital to move into this arena? (R&D is very expensive). And with regard to Y2K matters and mainframe migration, one must consider all the competitive technology and alternative procedures available to potential clients (matters I tried to discuss without getting tar and feathered). Is the pie still big enough to slice umpteen ways?
In the final analysis, it takes money to make money. Will Forecross get enough to refocus and recover?
- mark |
