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Technology Stocks : Brillian Corporation

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To: Starlight who wrote (315)	2/22/2008 12:43:09 AM
From: Tom Caruthers	Read Replies (2) of 361

Hi Starlight, That is horrible news. The risk of the "B" word just went up significantly. What we need to hear from management is how likely is it that SCHOT will pay us. My sense of it is that BRLC is teetering on the "B" word, but the creditors seem to think the company has enough ongoing business and potential to service the debt and continue paying down principal. But they are instituting significant oversight and have the option to pull the plug at any time. I think BRLC has a reasonable shot at coming back into compliance, but the question is what then. It looks like they are going to shut down Vivitar and dramatically scale back operations to regroup. This would explain the discounts at retail and the significantly reduced presence. Li and Hodgson are clearly not up to this task...they've essentially driven the company into the ground. I'm sure that it wasn't "all" their fault. Solitto and Pratt probably got the company into this mess and SCHOT is probably the root cause. But Hodgson needs to go. BRLC needs to bring in someone with turnaround experience. The balance sheet in the 10Q for Q3 2007 is actually not bad. It shows that they have a huge accounts receivable number, mainly due to $98M of non-payment/late payment by SCHOT and other Chinese distributors out of a total $180M in AR with these companies. Provided that they get payment from SCHOT, then most of this goes away. The question we need answered is what is the likelihood of a payment from SCHOT. sec.gov This is probably the best link to read. sec.gov Based on the filing, it looks like $137M is outstanding in principal and only $393K is outstanding in accrued interest. The plan to get out of default is here, starting on page 8. The problem is that Feb 19th has come and gone. The question is whether or not they are now in compliance with these items. sec.gov Afterhours activity - 730K shares. Trade by trade, the stock dropped to $0.83 on very light volume - a few thousand shares. Most of the activity has been in the $0.95 level. At less than $1 per share, my stock is almost not worth selling, but one could argue that something is better than nothing. The question is: sell now or wait until the end of the month to see how this unfolds? Tom

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