TS or anyone follow the fundamentals? Been a long time since I looked at any of their filings. Any opinions out there as to whether this is a good speculation at .10 or .05?
My preliminary look/see is that they have very little debt, assuming the filings are at least truthful on the balance sheet and revenue level. Fully diluted, they are probably up to 200 million shares. So creditors aren't going to force them into BK. Shareholders should act to get Newmans removed and go after them. If BOD won't do it, shareholders' derivative action against past BOD and management should fly.
Revenue about 12-15 million
(Revenue - direct costs) = perhaps about 3.5 million/year.
How can they justify sales and GSA of 20 million a year with these numbers? Looks like continuing rape. Newmans getting $300,000/year plus continuous options and perks.
Assuming they can kick out the Newmans and flunkies, run at $12 - 15 million, 3-4 p/s = .20-.25. That would seem to be a maxium at this point, so anyone dreaming of anything more right now is continuing to delude themselves.
They could probably run close to cash flow positive without the rape of management. Use some money to go after Newmans, stabilize for a year or so, and then try to sell to a large computer company. R&D is not killing them surprisingly. It's the fudge lines of SGA and Sales & Marketing. Unbelievable that they could continue this charade all these years.
Long term after stabilization and cutting costs to an efficient size, given scope of revenues, could give a market cap of $200 million which would be $1 assuming no dilution. I'm assuming the patent portfolio has a real value, although that will decline rapidly given their inability to ever really ramp up revenues.
Bottom line, my wild ass guess is that I wouldn't buy now above a .10, as the odds are that Newmans will continue to use company resources to fight the SEC and likely class actions so the rape will continue. I probably wouldn't buy above .05. However, if agressive shareholders make a move to get BOD which lives up to its fiduciary duties, then you have a shot at getting a decent return from here.
The regular class action "sharks" are worthless in a case like this. Sounds like enough "meat" corruption to get a hungry outfit to go after management individually for disgorgement, cancel shares and options, return of over compensation and over-expensed perks, void indemnity based on fraud, over-reaching, breach of fiduciary duties. Possibly go after auditors and PIPE financers, but that's a longer shot. Key is eliminating corporate indemnity that gives management a free ride.
Get a tough legal outfit that will take a case that will give them PR & a percentage only if significant results to shareholders, not cookie-cutter class-action firm approach, which leads to pennies for shareholders and millions for lawyers.
Any other opinions? |
