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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today

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To: Pr-Ac Man who wrote (5752)	5/15/1998 3:59:00 AM
From: Bruce Galpeer	Read Replies (1) of 19331

PR, The first part of your assumption that, IMO is incorrect, is that DCI will have to repay any money to anyone upon sale of the company. In the M&A field the buyer takes on the debt of the seller. That is the cost of doing business. If the debt structure is too high then it could result in a lowering of the price being paid. In this case I do not see Joe making any deals that would cause that to happen. I do not expect him to overpay for any of the acquisitions. As for the number of shares outstanding that is still to be determined. The buyback has already taken in over 1 million shares and at current levels can continue to absorb stock. I fully expect DCI to spend the entire $5 million that has been allocated towards this. That would probably mean that over 2+ million shares will come off the table when all is said and done. Another thing about the 22 million shares that were possible before, is that I believe some portion of that number were shares that would have been distributed on an incentive basis. If DCI is sold in the near future, <1 year, then I would expect not to see those shares distributed. The reason being that those divisions will not have met their sales goals to earn the bonus shares. How many? I'm not sure but will attempt to find out. The assumption of 3X revenues may hold true for the industry but each case brings forth its own unique set of circumstances. It is a bit early to even try and guess as to what we will see as an offer until we see all the pieces in place. Also remember that if DCI picks up a few really prime pieces, I think that EDGE is one, potential buyers will pay the extra money for just those pieces. We have a long way to go before we see how this will even start to play out. Bruce

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