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

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To: neverenough who wrote (911)	6/4/1998 12:35:00 AM
From: JEFF BERRY	Read Replies (1) of 44908

Nigel, Sorry for the slow response to your post. I have been away and just caught up on the string. The CCI deal will not solve any of TSIG'S short term cash needs. CCI is also in need of cash before they can even begin to take the first step of their ambitious business plan....The TSIG/CCI deal calls for TSIG to provide $250k at final closing as well as make available another 2 mill. for use at discretion of the CCI board. It should also be noted that the TSIG/CCI is not yet a done deal. According to the filings CCI must first provide audited financials for fiscal 96 & 97. The deadline for CCI to provide these is 60 days from the 8-K filing of May 15. Based on the results of the audited financials TSIG has the option (in their sole discretion) to unwind the entire transaction,or make modifications to the purchase price by a formula not laid out in the filing.....The 6 million shares for CCI nor the 1.1 million shares for Mr. Piercy will not be issued until TSIG is satified with the audit results.....It is unlikely that TSIG will make any substantial investments (in the event they are able to raise the needed cash)in CCI until these issues are resolved. This could likely delay the website and the planned CCI launch. It is my feeling that there could already be some problems with the deal. The much highly touted earnings fiqure for CCI of 1.4 million for fiscal 97 that Mr. Piercy represented to TSIG as referenced in March announcements, as well as in the interview with Vista Quest has already been reduced by almost 60% to $800k as noted in the April 30 press release. The 800k is also an unaudited number. This would indicate that there were some obvious errors in the financials that were originally relied upon....When the financials are finally subjected to the rigors of a true audit and forced to comply with g.a.p. standards it is highly unlikely that earnings will be adjusted north of $800k. It is far more likely they will be adjusted downward.....It is typical for many start up fast growing companies like CCI to focus on sales and marketing.Accounting is far down the priority scale,especially if they have not been required to provide audited financials. It is also typical that such companies in many cases fail to properly accrue expenses or make provision for contigent liabilities and uncollectable accounts recieveable.....It is also common for owners to pay them selves a small salary or none at all,borrowing from the company instead so as to meet personal needs so as to reduce expense and increase earnings. All of these "commons" and many others will likely come into play during the audit which will no doubt result in substantial adjustments. It is realistic that the unaudited $800k could be halved or worse. How this will affect the deal is yet to be seen. It is unlikely (in my opinion) that TSIG will unwind the transaction since it is the only support they currently have to keep share prices from hitting rock bottom. Respectfully, JAB

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