Computerized Thermal Imaging CIO (formerly COII) Message Board

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Microcap & Penny Stocks : Computerized Thermal Imaging CIO (formerly COII)

CIO 6.905

+0.2%

Nov 14 9:30 AM EST

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To: chirodoc who wrote (4043)	5/13/2000 12:55:00 AM
From: Prospector	Read Replies (1) of 6039

Thoughts on Dilution.... People seem to be concerned about dilution, as if 100M shares were going to hit the street by the first of July. That will not happen. Management is just as concerned about dilution as other shareholders. They know that they are affected by dilution just as much (often on a larger scale) than other investors. An important consideration is the company's ability to attract and retain the kind of talent that is needed to ensure success. Because of tax laws and other considerations, stock and options plays an important role in the compensation package for key personnel. We need to remember also that the speed with which the company can roll out product is directly related to the resources that are available. Cash is one resource. The company could choose to use the current cash until revenues are available to "self fund" company expansion. Or the company could choose to use debt financing, equity resources and revenue in order to make a big entrance to ensure capturing a market. In addition, there are many instances in the wheeling and dealing of corporate affairs where stock is more valuable than the cash equivalent because of opportunities for relationships or to leverage resources. To ask management to work with cash only is like having a prizefighter go into the ring with one hand tied behind his back. It took the company 13 years to go through the first 100M authorized, most of it way below $1 in the early days. Based on where CTI started, what has been accomplished to date and what will be accomplished with the money in the bank, the first 100M went pretty far. Last year the company had to sell 2 shares of stock for every dollar it needed. Now that was dilution. Today it would get $8 for every share. With that math, the next 100M will go a long, long way, even farther when we are $10, $20 or $50. Don't expect it to hit the street anytime soon. The company knows that it is more valuable to them in the future. Prospector....

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