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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG)

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To: neverenough who wrote (862)	6/1/1998 6:36:00 PM
From: JEFF BERRY	Read Replies (3) of 44908

Nigel, My decision to pass on tsig is based on a number of factors.The foremost being short term cash requirements.It is no doubt apparent to anyone reading the 10q and the 10k that liquidity poses a serious risk to the sustained operation of the company. With revenues virtually non-existent cash continues to be consumed at an alarming rate. Where will the cash come from to sustain operations? The tsig bulls are convinced that management will continue to fuel the cash furnace until the company is able to sustain self. I agree that it is a positive sign to see management and in particular Mr Gordon putting their own money on the table, and I would not expect to see them throw in the hand if they do have a mountain of cash waiting in the wings. However there is nothing to indicate to me that cash will be available. On the contrary I am convinced that indications point to a drying up of cash that could result in negative consequences for all tsig investors. One such indication is the obligations due the I.R.S. as of 12/31/97. It is apparent that this obligation is not for income taxes. At the very least it represents an obligation for the companies portion of F.I.C.A. At the very worst (and in my opinion most likely it) it represents failure to pay federal payroll withholding taxes. It is quite common for cash strapped companies to fall into this trap. If this is the case it is cause for serious concern. For one,such obligations carry stiff penalties and are rarely excused against responsible officers of the company. Even in the event of corp.bankrupcy responsible officers remain personally responsible for these obligations.......If the obligations due the IRS were strictly related to the company's portion of fica the amount, although carrying stiff penalties as well, it would not have been a huge sum and I believe it would have been paid prior to year end so as to not show up in the notes. The 10k published in May does not indicate (as it could have in the notes)that the 12/31/97 oblligation has been satified. This leads me to conclude that it is a sizable sum. It may also help to explain what appears to be a shift in 98 to paying many of those in management as sub-contactors as opposed to employees (another "potential" IRS problem.) ........I discussed these as well as other concerns last friday with Bill Kabesh of Vista quest, tsig's P.R. firm. He stated that he did not have details regarding the IRS obligations beyond what was published,but agreed that the senario described above was most logical.............The question that concerned me most: If the company has available cash resources available from its management,why would management allow such a potentially damaging obligation with continuing penalties to go unpaid?....Especially so when you consider the personal responsibillity of the responsible officers?...... Respectfully, JAB

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