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Microcap & Penny Stocks : THE OZONE COMPANY! (OZON)
OZON 11.600.0%Dec 1 4:00 PM EST
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To: Dusty who wrote (1426)11/21/1997 6:34:00 PM
From: RBattman  Read Replies (2) of 4356
 
Dusty: Your concern about undercapitalization was the subject of my first post here after completing my due diligence. The company's public filings have described among the "risk factors" the prospect that the company lacks sufficient capital to sustain itself thru 1998. The company has been working on that with some success. Recently, the company completed some form of private placement which raised $1.2mm. Based upon the cash burn rate of this company that should be more than sufficient to sustain the company for the immediate future, particularly since they seem to have joint ventured production of the laundry and food decontamination equipment (not to mention the polymer) to ameliorate the capital needs. From what I've seen and heard, 1998 should reflect better cash flow from operations and perhaps a lower burn rate.

I have not yet seen the terms of the private placement. Clearly shareholders have been diluted to some degree and on a worst case basis, will suffer further dilution in the future. Since this company doesn't have access to bank credit at this time, dilution has to be expected as a source of capital. While nobody likes dilution, this company doesn't appear to have a history of it and doesn't qualify as a Reg S queen.

Obviously I'm long on this stock. These comments reflect the results of my DD. Please do your own. I think you will agree that my comments are well taken after you do.
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