Charles, Here, this might help...This is Marcus Eder's and my analysis of GTSM that Marcus pulled together internally for our Website Audioinvestor.com.
And IMO GTSM is a fair risk as an OTC-BB buy now while it's pulling back....
Hi,
Galtech GTSM
(OTC/BB), now at $4.25. No sales yet but no longterm debt either. Solid balance sheet. It's a fully reportingÿdevelopment stage company on the OTC/BB. Filings can be found at SEC/Edgar : <A
href="http://www.sec.gov/cgi-bin/srch-edgar?galtech">http://www.sec.gov/cgi-bin/srch-edgar?galtech</A>ÿ.
Currently 14.6 million shares are outstanding and float is around 5.6 million shares. Their homepage is at <A
href="http://www.galtech-corp.com/">www.galtech-corp.com</A>. The financial status of GTSM is typical for a development stage firm: no sales yet but no debt either. Market cap is now around $63million US-$.
They are covering 2 hot segments: compound semiconductors and motor/generator development.
Compound secmiconductors:
Galtech is working on an improved,ÿhigh-yielding manufacturing process (efficiency 70% instead of 15%) for ultra-pure wafers of Compound Semiconductors.ÿIf you grow larger crystals then the waste of production will be way smaller. They are starting with CdTe because the bottleneck to grow large wafers is biggest with this compound. CdTe
can be used thruought the whole IR (Infrared) spectrum from 1000nm beyond to 4000nm. For this compound, GTSM's contribution would really mean to get rid of a
serious bottleneck. Many military but also electro-optic application are literally callingÿfor high quality CdTe wafers in abundant quanities.
However current production methods just can't keep up with mass production requirements because they are wasting around 85% of the material. If Galtech succeeds with its CdTe wafer manufacturing process, they could minimize the waste down to 15-30% or even less. And CdTe will only be the start. Theoretically their manufacturing process could be applied to any compound semiconductor material. Their planned strategy is also quite shrewd. Since GTSM has all the knowledge how to grow wafers they don't intend to license their process to others. They want to capitalize as much on their value chain as possible. So, if their trials are succesful GTSM plans to start mass production themselves and ship to those fabs that need a supply of large wafers: (I guess they mean Nichia, Cree, Emkore, Rockwell...)
Motor/Generator:
don't count this out. They bought patents and the technology on this one and have a demonstration prototypeÿbuilt into an automotive platform. I didn't research this one as deeply as their compound semiconductor plans and Mr. Tunnell indicated that to develop this technology further R&D dollars would be needed. Compound semiconductors clearly are considered as the short to midterm priority of GTSM.
However in view of the fact that the area is quite hot right now, don't write this division off. If you happened to notice that in this fieldÿthat were once cursed by the market are finding its way into everyday life's products I do think that longterm this division may have a bright future. Look at Turbodyne (<A ref="http://www.turbodyne.com">www.turbodyne.com</A>). In the US they were relegated to the PinkSheets but they were allowed to stay at the Easdaq in Europe. They finally did the right thing and partnered with Allied Signal, now Honeywell (Nyse: HON). Their Dynacharger and Turbopac products ARE a motor/generator application (look up the way the Turbopac and Dynachargers actually work) and Turbodyne will supply Honeywell with those motors. If GTSM has to offer something, this division might go a similar route longterm...
My take: I finally had a chance to hook up with Bill Tunnel who is their IR person atÿ(623)825-2550 and Iÿconsider him as really open andÿstraightforward. According to him, they won't do any kind of dangerous financing deals like floorless convertibles or equity lines of credit. He further indicated that GTSM will move to the NasdaqSC as soon as possible. The net tangible asset requirement should not be a problem because GTSM has no longterm debt. Just a $4 closing bid price for 30 days wil be required. Financing for the mass production facilities described above would be conducted with non-dangerous methods like private placements or innovative constructions like a swap of a credit agreement for facilities to be serviced byÿlarge wafers of compound semiconductors produced. Let me say I like that company. It's sort of a BET with a fair chance to get a good reward, not yet aÿcompany with revenues but they finance solidly and if they make it they will be BIG, really big..
I won't sell my shares below $10 (marketcap of 146 millions) . Ultimately this one could go to $20 (marketcap of $300million) if completion of production facilities are near. I arrived my targets by looking at the marketcap of other compound semiconductor companies. All do have sales but are mostly in the BILLIONS (plural !) with their marketcap statistics..
regards
Marcus Eder aka CROSSY |
