Dear Dick...or should I say Mr. Crystal Balls?
A. If you really believed what you're saying, you'd keep it to yourself and short the heck out of the stock.
B. Or, you have already shorted the stock and you are the US hedge fund manager who is short 50,000 shares of FRX, as well as a basket of other Y2K stocks, and has been desperately trying to cover his position over the past 3 weeks or so.
Looking at your postings starting April 7th, I have to believe that you are possibly that person. If nothing else, you've scared the Vancouver shorts into covering. This 50,000 short position is about all that is left uncovered as big news and US listing appear imminent.
C. If the bank you are referring to is the Silicone Valley Financial Services, as at the end of September '97, nothing was owing to the bank. If the company has in fact recently borrowed using your figure of $1.5 million at 24% on its revolving line of credit against receivables, then that means the company has that much or more currently in receivables. The bank loans against the company's receivables and the principals' guarantees...not stock in escrow as you imply. The company charges out 24% per year on its outstanding receivables. The cost of borrowing is a wash. The bank holds the accounts receivables as security against the loans - common industry practise. Forecross is fortunate to have an institution that will lend against its accounts receivables. Banks only do this when the borrower is a top notch company and the receivables are owed to it by strong, reputable clients. This arrangement only strengthens Forecross's ability to do business. Remember, accounts receivables are income. Income produces profits. I wish I could borrow against my future incomes - don't you?
D. As to your incorrect and misleading statement about $4 million in liabilities, the figures that I have looked at from the audited statements used by Forecross in their SEC Form 10 filing, show less than half a million dollars owing to third parties as accounts payables. The amounts that your refer to for accounting purposes, totalling $3.3 million (approx) are the deferred revenues from the distribution contracts. They appear as liabilities on the balance sheet for accounting purposes only. The same statements show the company's assets of $3.3 million as well. If your ascertains were remotely correct, Forecross would not have been allowed to file a Form 10 and subsequent Form 12G. The statements clearly show that Forecross paid all its outstanding debts from its income stream and its sales of distribution agreements. Those distribution agreements, however, can only be recognized over the next 2 1/2 years, hence their appearance on the liability side of the balance sheet. Considering their level of expansion in the last two quarters, larger offices, more personnel, additional equipment, and the cost of running tests for clients, Forecross is actually quite healthy. Otherwise, why would the principals not have sold off a few hundred thousand shares at...say $12.00..over the past six months to retire what you perceive as debt. Obviously they would have if they required the cash. Interesting to note your estimate of $2.5 million in sales in the second quarter would give them an income of 100% increase over last year. Also, this estimate is above your previous estimates for income in that quarter. I seriously think that you should try to cover your short position before May 15th as most Vancouver players have done in the past week.
E. Most shareholders know that the last quarter was poor...hence the $7-$8 share price. Old news - big snooze. Look forward, not backwards.
All the above figures have been taken directly off audited financial statements that Forecross has made available to the public. Believe it or not....I actually read these! I think your attempts over the last several weeks using misleading and out of context financial references is nothing but a transparent attempt to scare the uninformed out of their stock. Shame on you!
Doug |
