SHORT Due Diligence Report on NSDR based on 10Q...
Close 6th October 2000 @ $4.62, up 23% on 24,000 shares traded...
1) Stats: Balance Sheet...
+ Outstanding shares: ± 7,083,180
+ Total Assets EXCLUDING Good Will: ± $5,297,875.00, but including...
+ *Receivables: ± $2,579,144.00 on sales of ± $361,972.00!!!
+ Total Liabilities: ± $7,555,689.00
+ NEGATIVE Shareholder's Equity: ± $2,257,814.00 or ± -32 cents/share, excluding Good Will...
+ *Intangible Assets = Good Will: ± $22,840,691.00!!!
2) Stats: Income Statement...
+ Last Quarter (31 July) Revenue: ± $361,972.00
+ Last Quarter (31 July) LOSS: ± $1,086,133 or ± -15 cents/share
3) Conclusion...
The Good Will/Intangible Assets figure of $22.8 Million for a business LOSING tons of Money, is SO RIDICULOUSLY HIGH in relation to the Tangible Assets of $5.3 Million, that one has to wonder what are the real motives for this acquisition... For all intent and purposes, I have ignored the Good Will component in the process of forming an opinion on this Company... So we're left with approximately: $2.3 Million or 32 cents/share in NEGATIVE Equity and LOSSES totaling $1.1 Million per Quarter or around $4.4 Million annualized, which represents about 61 cents/share and is roughly $900,000 less than the total Assets of this Company... The Receivables of $2.6 Million are grossly disproportionate to quarterly sales of $360,000... As a result, I believe the Stock is a STRONG SELL with a short term Target of 25 to 40 cents...
4) Disclaimer: This is only a personal opinion derived from my understanding of the latest 10Q Filing, NOT a recommendation and no responsibility is accepted for errors or omissions. Would-be investors should carry out extensive Due Diligence... |
