Update:
I have recently had the pleasure of speaking with one of the key management
at HARD. Although maybe nothing earth-shattering, hopefully this will serve
as confirmation of what we've previously heard.
A summary of this conversation, plus conversations with Mark @ ICC, and
probably a couple of IHMO's along the way (Preface by the fact that I am
relaying this info as best possible - if I've "missed the boat" at any
time, I would appreciate correction from Mark or others who know):
Equipment is coming into plant.
Within a couple of weeks, NovaCrete will be in "full" production, i.e.
initial production as set forth in business plan.
6 employees currently. More will be added, particularly in area of marketing.
True, 6 employees isn't many. But we're talking about a virtual "start-up"
company with less than a $4M cap and reportedly a great product.
Internal #'s suggest that HARD can be profitable; one advantage = relatively
low cost of raw materials.
Although many competitors are currently in the marketplace, i.e. not so much a
"brand new product" - the first car, microwave, hula-hoop, etc. but rather
a "new and improved product" with which to offer a HUGE market, growth
goals as stated in the Windward article I posted awhile back are not thought
to be unachievable in terms of revenue. In terms of profit margins, the
marketplace will decide.
In terms of product, technical analyses as published at NoveCrete web site
are accurate to the best of management's knowledge.
Product is thought to be "as good" in virtually all cases, and "better"
in many cases. Price will be competitive, possibly incrementally less
expensive. In most scenarios, cost will not be final determinant of customer
choice, most decisions will be based on quality.
One of NovaCrete's primary strangths is that it is mineral-based vs.
polmer-based.
Although contracts listed are not valid, some/most/all of these contacts
are established. We're not starting from "ground zero", in terms of customer
relationships.
From my question, "How is financing of plant being arranged? Doesn't sound
like former management left much cash in the coffers."
Plant has been internally financed on a "pay as you go" plan through shares
and debt that can be converted to equity. More on this later.
Revised finincials have been received. Ready for publication soon, best
guess within 30-45 days. All numbers are in place, hold-up is due to
making sure all "i's" dotted & "t's" crossed for 10-K & 10-Q.
FY = June-May. A loss, though relatively small in nature, will be
reported for FY ended 05/31/97.
Currently, HARD has no money, no debt. Slightly positive shareholder's
equity, as some nominal amounts of inventory exist.
May need $.5M-$1M down the road, to develop marketing team, etc.
Money, if not provided by operations, will probably be raised through
some form of convertible debt. If things go well, maybe debt not needed.
Share cancellation - still in the works. Taken longer than anticipated,
but goal is to complete this cancellation once and for all, with no
ongoing litigation.
Next probable shareholder's meeting, Labor Day +/- a month.
Plant located approximately 10 minutes from Toronto airport, if anyone
interested in visitation. I believe that, with advance notice, we would
be welcomed.
Re: Plant/financing alluded to earlier:
When I heard that plant was being financed on a "pay as you go" basis,
I facetiously asked, "Well, I'm sure this isn't a $1B plant."
Laughing reply, "No, as a matter of fact, you can safely say that this
is even less than a $1M plant."
For a hint, I'll post the following link from EDGAR. I hope it'll re-post
here, since you've gotta register for EDGAR. I'll summarize, just in case:
edgar-online.com
This is link to Form SC 13D/A, filed May 14, 1997.
Indicates that Douglas Friedenberg currently owns 1,317,000 shares, quite
a substantial addition to his original investment. Interesting to
note that Doug's average price was $.35/share. HARD opened this a.m. at an
ASK of $.38.
From the discussion, my general feel (that makes this another IMHO) is
that management is intent on looking at, and seeking out, other opportunities.
I don't think that we'll see a lot of hype, just be able to watch as the
story unfolds.
In reading the bios of the 4 Directors, one senses that this isn't your
typical band of concrete jocks.
At this low price of late, I've averaged down on HARD. Seems like most
investors who are smarter/wealthier than I advise against this, but this
case looks like it may be worth a shot.
Although I've added to my position in HARD, I'm still a couple of shares
short of Doug. <g>
Well, that's everything I know (and think) about HARD. Headed out of town
for a few days. Hope this helps, and that all have a great weekend.
David |
