I just received this from Markatech. It looks interesting.
Dear shareholder
The markets have been pretty nasty in the last while, but we think that a turnaround is coming. The venture markets are getting hit in general due to:
i)gold pricing,
ii)strength of the big boards (with 30%on blue chips why risk the speculative investments?),
iii)the Asian money problem,
iv)Bre-x hangover
Markatech's fortunes are about to improve dramatically in the short run.
We have been on a search since our inception for the right cash flow business to remove our market financing needs and improve shareholder value. We are quite sure that we've now found the perfect venture and the perfect partner, Spinner Records and Compact Disk manufacturing.
Spinner Records is the largest independent record company in Canada. They have researched the CD market for five years to obtain a secure source for CD manufacturing . They are now ready to work with us at Markatech.
Spinner, as our partner, will fill the capacity of the equipment right away! This provides immediate cash flow to fund further growth and expansion. We have found that not one CD plant has
failed, which is an amazing statistic in itself. Even more amazing is the growth rate of the CD industry. The immediate cash flow, mixed with our proprietary technologies (and the capital to market them) will allow us to meet and exceed the best growth rates in the industry.
Markatech will finance the plant through an innovative convertible preferred offering.
The offering will carry 12% interest, and will raise sufficient capital so that additional placements are not required and we WON'T DILUTE THE FLOAT for at least two years. With the anticipated cash flow and our tight capital structure, the financial leverage on today's share price is tremendous.
Compact disk manufacturing is very lucrative. At startup with one machine and a capacity of 1000 CDs per hour at an industry standard profit of one dollar per CD, the power of this business is obvious. Even at a low 80% machine uptime, the business will generate sufficient cash flow to justify a huge increase in shareholder value.
Despite the success of this business, there are no CD plants in the mainstream in western Canada. We will be first. Two companies; Cinram in Toronto, and Amerdisk in Montreal have both experienced huge growth, and have become billion dollar companies in a very short time. They are so busy that Amerdisk has offered us all their business under 2000 units west of Toronto.
Through this exciting opportunity it looks like we'll finally be able to do something for our shareholders. As this process matures and the market begins to understand the results of this endeavor, I think that the price of the stock will reflect our potential growth. We have begun to actively introduce new groups to Markatech and it looks very promising. This has not yet been reflected in the share price, but I'm sure it will be once certain milestones are reached.
Thanks for your patience, please give me a call if I can be of any service.
Lawrie Koyle
Investor Relations
Markatech Systems Inc.
1-800-338-7844 |
