The lawsuits have been settled out of court as follows (extract from 2nd qtr fiscal 1998 announcement):
<<Also further to the February 4, 1998 news release, NHMC has reached a tentative settlement relating to the conversion of the convertible debenture. Under the terms of the proposed agreement with one of the Underwriters, the balance outstanding for this fund has been converted at the present market price and will be held in escrow and released at a maximum 20 percent per month.
The Company has also reached a tentative agreement with the second fund whereby the fund will only convert up to a maximum 10 percent per month until the position has been depleted. Both agreements do carry a stringent shorting provision to ensure proper selling. This tentative settlement will resolve all outstanding issues between all the parties.>>
While the above agreement limits the rate at which the European funds can convert the debentures and sell the stock, it still means that there is some ongoing selling pressure. However, I view this as an opportunity to accumulate, as I expect that once the European funds will be done and/or when we get future quarters results, the stock should spike upwards...A few days ago, when I sent a note to the company asking them whether it made sense that their 1st fiscal half 98 had actual revenue of $5 million, and their total fiscal 98 year revenue was forecasted at $23 million, I received the following answer:
<<NHMC's revenues are increasing rapidly on a quarterly basis. The 3rd and 4th quarter sales will continue this trend and will show more growth as the investments we have made over the last 2 years in acquisitions starts to pay off.>>
While this does not specifically say they will make exactly $18 million in the 2nd half, it does not say that their forecast is out of line. If they end up meeting their $ 23 million revenue forecast, that would give credibility to their fiscal 1999 revenue forecast of $100 million (if my memory does not fail me).
In addition, in view of their technical advances in robotics, I expect to see more announcements in the future like the one we have seen today.
To summarize my opinion, the stock price may be subdued for a while, but when it is ready to take off, watch out! Cheers.
Saverio |
