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Technology Stocks : Netpliance <NPLI> .com/iopener
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To: Glenn Petersen who wrote (34)12/26/2000 7:27:12 PM
From: Glenn Petersen  Read Replies (1) of 51
 
As of September 30, 2000, NPLI had $76.4 MM in unrestricted cash, or about $1.27 per share. The stock was selling at $.34275 per share, or a bit less than 30% of its September 30 unrestricted cash value, when McHale announced his $.65 per share bid.

The company restructured its operations in October, laying off 38% of its workforce and ceasing its manufacturing and marketing activities. It took a $11.4 million charge for inventory writedowns and booked a settlement of $6.3 million with its manufacturer. Including its restricted cash balance of $11.9 million (which is related to a letter of credit for the manufacturer), the noncash current assets approximate $22.8 million, just enough to offset the liabilities which total $22.3 million.

There is one significant contingency that is impossible to quantify at this time. In July 2000, the company signed a network service agreement with AT&T which calls for the payment of $32.6 million over the next four years. There are some termination provisions in the contract that will probably reduce that amount but I have been unable to find any details related to those termination provisions.

To recap, the holders (all insiders) of 52% of the company's common stock are offering the remaining shareholders approximately $19 million dollars for a company that controls approximately $70 million in cash (subject to the AT&T contingencies) and is in the process of redefining its business plan. A fresh start, minus the public shareholders.
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