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Technology Stocks : JMAR Technologies(JMAR)

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To: henry jakala who wrote (3649)	10/24/1997 11:11:00 PM
From: Arthur Radley	Read Replies (1) of 9695

Being a new investor in JMAR (I added to my position three times this week) I would like to add my two cents to the news release. I'm not a CPA but as they say, "give a Texan 15 hours of accounting and he thinks he can balance IBM's books in 30 minutes" 1. When a company owns over 50% of another company there are special accounting rules that apply as to how this company's earnings are reported by the controlling company. There are many companies that have such investments..example is Harcourt General owns 53% of Neiman Marcus. These accounting rules have been changed this year and earnings are not allowed to be reported by the controlling company in ways that are as lucrative as last year. Someone has suggested that CATS be spun-off from JMAR. No way will this happen. No one will underwrite such a deal involving a company worth less than $2M plus a company that is lossing money as is apparent with CATS. Not knowing how JMAR accounted for CATS last year the best thing they can do is probably show it as a discontinued operation and write it off as an asset which is probably what they are going to do by the fact that they are not funding it with any more money. Someone posted a question as to whether or not this $3m would show up as extraordinary income next quarter and the answer is no(IMO) because this is not income in any manner. Is this announcement benefical and the answer is yes(IMO). First it indicates that they recognize that by not funding CATS with anymore money they can redirect this cash outflow to better opportunities elsewhere in the corporation. By stopping the bleeding now it enhances growth in the potentially more profitable areas. Also anytime you can reduce outstanding shares without spending money it only enhances shareholder value(this is assuming that they accounted for this purchase last year and at the price of $2.00 a share or there abouts) and now at a time in which the stock is trading at $4.00 plus a share. Bottom line is I think they will totally write off the CATS operation this year and technically they still have ownership and just if by chance someone would like to buy them out at a future date any proceeds would be "gravy". I think it remote that such a deal will take place. 2. Someone posted earlier this week that Schwab will now allow you to buy JMAR on margin. This is not the case but they will allow your position to roll over into a type 1 account when and if JMAR goes above $5(IMO this is only a matter of days)and they will allow your account to stay as Type 1(margin) if the shares drop below $5 but if the shares drop below $3.50 it get out the checkbook time. Good announcement yesterday and when the x-ray demos are done before the end of the year as Mr.Martinez indicates , it will be rocket ride time for JMAR shareholders. These are just my opinions but remember I'm just a TexasDude that has dropped the e on occasions.(:>)

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