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Technology Stocks : NUKO INFORMATION SYSTEMS
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To: Joseph Beltran who wrote (2143)6/12/1997 10:54:00 PM
From: kolo55   of 3509
 
No. They have enough credit to last almost 4 months.

Check my notes from the annual meeting, post #1897. Here is an excerpt:

Burn rate:
They say that they have reduced the burn rate to $1.3M with the latest expense reductions. They have $3M out of $6M, left on their credit line and $1.9M in cash. Later they said that they were hoping to get by, but the financial auditors were putting some pressure on to strengthen their balance sheet cash situation. Given their growth plans they will need cash. (I got the impression that they will cut expenses until they have a good quarter, and hope the stock recovers, and then look at various means of raising their equity position and strengthen the balance sheet.) They are renegotiating their credit line with Silicon Valley Bank, but have nothing to report so far.

Given the $3M unused from the credit line, and the $1.9M in cash, this should last about 4 months. If the rumours are true that SVB has raised the credit line, this gives them more time to get to positive cash flow. With a reasonable infusion, the company could go another 4 months for a total of 8 months. I think the sellers are expecting them to hit the wall sooner. I think they are wrong.

This is the first of three things that I believe will cause the recovery of these shares. The second thing is the realization of the $4M in revenues from the last Q. The third thing is increased revenues from the alliances.

But it is hard to buck the emotional selling frenzy.

Paul
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