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Gold/Mining/Energy : Markatech - MKD (VSE)
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To: Robert D Curtis who wrote (202)4/12/1998 11:59:00 PM
From: BlueIce  Read Replies (1) of 416
 
I have some more information about MKD now. To avoid spewing too much information at once, I've split it up into two posts.

2-for-1 Price Consolidation
The 2-for-1 price consolidation was necessary for the financing. They would have been unfinancible at their current price of $0.15, so they did the minimum consolidation necessary to meet the requirements. There is a publication from Union Securities called The Informed Investor that has an article about the VSE's status. It points out that with the VSE composite dropping so severely last year and many of the stocks correcting, 1998 would be a year where many companies would be consolidating their share price to get financing or go belly up.

The whole consolidation process by these companies demonstrates the VSE Composite has reached its bottom and is ready to move upwards again.

Now the important part: MKD expects its shares to consolidate in about three weeks. At this level of $0.15, the post-consolidation price would be $0.30. If MKD had to consolidate its shares to get the financing then I have no problem with that. I want to see them move forward and get the CD plant running than experience delays.

CD Plant Location
Markatech has a short list of two potential buildings for the CD plant. Only it's not just the CD plant that'll be located there! I asked about the proximity of MKD's head office, their CD plant and Spinner Records/Company Disc Inc. The answer: same building! They've found two buildings in Vancouver large enough for all of them to relocate to the same location. Spinner Records also plans to build a recording studio in the building they select. Now all that talk about saving shipping costs makes sense. Spinner's new shipping cost? $0.00. The delivery time is quicker than ordering pizza.

Potential Clients
Spinner Records is the first major client. Ted mentioned there's a company in Seattle looking at MKD for CD reproduction of 750,000 units per year. I was told by IR that there is a "tentative agreement" for this to happen already. Lawrie says this can be confirmed with a phone call to Spinner Records. There are other clients in the works that we'll get to hear about as agreements are reached.

Continued in next message...
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