OK David, here is your task. Why don't you go back through all the SEC filings to tally how much money this company has taken in from all their financing activities.
I haven't dug through them all but let's take the information given in just the most recent 10Q.
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The Company through private placements of its convertible preferred stock and its 8% callable, convertible debentures raised net proceeds of $32.4 million during the six months ended October 31, 1996 which are included in the net cash inflows from financing activities. Warrants to purchase 342,021 shares of common stock at prices from $8.13 to $18.00 were also issued in these placements. (See Note J to the Unaudited Consolidated Financial Statements contained in Part I herein which more fully describe the Company's convertible preferred stock and debentures).
The Company through private placements of its common stock and convertible preferred stock raised net proceeds of $12.7 million during the nine months October 31, 1997 which are reflected in the net cash inflows from financing activities. Warrants to purchase 75,000 shares of common stock at $8.00 and callable warrants to purchase 782,888 shares of common stock at $7.50 per share were also issued in these placements. (See Notes J and K to the Unaudited Consolidated Financial Statements contained in Part I herein which more fully describe the Company's convertible preferred stock and terms of securities placements).
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OK, so let's tally it up. For the 9 months in 1997 they have $12.7 million raised. In the 6 months in 1996 they have $32.4 million raised.
.......$12.7 million
.....+.$32.4 million
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.......$45.1 million raised for those 15 months described. (Who knows how much else was raised for other time periods).
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In the same 10Q the company says:
At October 31, 1997, the Company had net worth of $41.3 million, with total assets of $83.2 million. Of these assets, current assets totaled $44.8 million including $3.4 million of cash and cash equivalents, $16.1 million of accounts receivable and $21.2 million of inventory. The Company's working capital at October 31, 1997 was $6.7 million.
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So the company in only 15 months raised over $45 million from debt issuances, private placements, etc yet the whole net worth of the company is only $41.3 million!!! And $21 million of that is listed as inventory!! They had to depreciate about $5 million of that or inventory would have represented closer to $26 million. Another $16 million in "assets" are unpaid account receivables.
Where did all the money go? To acquisitions? So let's get this straight. FIBR has tripled the shares outstanding in the last couple of years yet had y over y sales declines last quarter. Yeah, those acquisitions are really contributing to the top and bottom line.
The company in the same 10Q shows cash and cash equivalents of only $3.4 million! They sure blew a lot of cash in a hurry yet have nothing to show for it. How is the company going to pay for this 2 million share buyback that people are talking about with such little cash? Was it $2 million dollars or 2 million shares?
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Look at the pathetic cash flow for this company:
The Company's operations provided a cash flow of $344,000 during the nine months ended October 31, 1997, as compared an operating cash flow deficit of $990,000 during the nine months ended October 31, 1996. This increase in net operating cash flow is reflective of the net cash outflow from operations after adjustment for non-cash income and expense of $5.6 million reduced by the net decline in current assets and increase in current liabilities during the nine months ended October 31, 1997. During the nine months ended October 31, 1996 net cash outflow from operations after adjustment for non-cash income and expense was $500,000.
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I'm not missing something here am I? Did I forget to add a few zero's? Do they mean $344 million? Is this $110 miilion company trying to say that they only had $344,000 in cash flow? Or am I just not thinking clearly and it is truly $344 million.
Looks like FIBR shareholders have their equity significantly diluted with the skyrocketing in shares outstanding, the company has bleeded most of it's cash, the company had less sales in the last Q than in the year ago period, insiders have been selling or registering to sell shares at prices much lower than 5 or 6, (and this is not some outside shareholder baloney, I saw registrations by the President of Osicom filing to sell shares), this company has exposure to Thailand, is more than likely going to see shares hit the open market (probably some did hit today) from conversions, blah, blah, blah, woof, woof.
All this adds up to a downward spiral for Osicom. Obviously management isn't going to get more people to give them money from issuing shares through placements if those people can't sell those shares for anything on the open market. Hence the need for a bump in FIBR's stock price so the convertable holders can sell and be on their merry way.
Oh, and one other thing. I haven't read how the deal is structured with Osicom, but generally the people who engage in these financing activities are permitted to engage in short sales, (to preserve gains) and then permitted to cover their short with the restricted shares once the restrictions are lifted. This does nothing to help out the price of FIBR either. |
