Saflink Corp. (ESAF) Biometric Software Provider Message Board

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Microcap & Penny Stocks : Saflink Corp. (ESAF) Biometric Software Provider

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To: Dan Shubin who wrote (2446)	12/3/1997 3:49:00 PM
From: GoingHikin	Read Replies (1) of 4676

My explanation for the bottom line loss at NRID... I've been reading their filings a little more closely and talked to their investor relations person last week during the most recent crash. I have some insight into the stock demise. In reading the refiling of the '96 10-K and the most recent 10-Q's I have discovered why NRID's bottom line seems to be getting worse when the company is actually doing quite well. I'll start by supporting the comment that they are doing quite well...NRID introduced their first commercial products at the end of '96 and abandoned future government contracts. Since 1Q97, their sales have grown 30% each quarter, while their operating costs have been dropping. Ok, now look at their bottom line. Its going down because of this lineitem called a "Prefered stock deemed dividend," which is eating the hell out of earnings per share. It turns out that this "deemed dividend" is not a cash payment! It is actually an accounting method of evaluating the dilution of common stock by the conversion of preferred stock to common stock. NRID didn't pay anybody $980,000 last quarter even though it looks like they did on the statement. I was told that the SEC is requiring public companies to start recording this lineitem against common stock earnings per share. So NRID's CFO refiled last years 10-K to revise the earnings statement. The change made the '96 loss greater, but he did it so he could compare '96 to '97 properly. Unfortunately there was no explanation in the filing and it looks like they lost more money. Also, I was told that they are in talks with Lucent to use their algorithm instead of Cogents. This would wipe out the $10 million balloon payment in '99. If I had any cash left, I'd be buying up every last share of NRID at $.40/share.

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