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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)
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To: Skeptic who wrote (7075)12/10/1997 11:46:00 AM
From: Jack Zahran  Read Replies (2) of 31646
 
Thank you for your analysis. I think "shady dealing" is a strong suspicion when all these financial instruments are legal and could also point to shrewd cash generation. In and of itself there is nothing shady in placing warrants, and privat placements. Nor is there anything shady in applying for NMS. What would be shady is if the company gave false or misleading reasons for these actions. That is why good research and investor participation is important. I believe we are doing just that.

As for their core business, I think you need to relook at the numbers. There core business has been experiencing record growth since the new managment took over. Also note the following statement from the company:

"Let me comment on earnings before interest taxes, depreciation and amortization. Again, when you look at our financial statements, keep in mind that we do have significant non-cash charges in the area of amortization expense as well as depreciation. When you add those into our operating income number, we ended up actually positive for the quarter of a positive $42,000, and we are very pleased with that."

I think this is significant if you also add the $500-1Mil cost of the Y2K CD One development. That means that there core business did generate positive earnings.

With that cost absorbed, then we look forward to Core earnings plus Y2K earnings in the future. When Y2K earnings are completed, those engineers will be repositioned to handle the companies growing core backlog and thus continue generating revenu for the company. The speculation is that TPRO's greater penetration will result in growth in the core business. As a contractor, I know that to be true.

Thanks for your observations.
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