KIK: I finally took some time to look over as much info as I could find in a couple of hours. conclusion:
- I only have one Canadian stock in my portfolio (TSE:HUM) and it's mainly because it's difficult to get in-depth timely financial info about companies (this one I bought through their listing on NASDAQ). The last financials I could get for KIK were Oct '97! Sales definitely seem good, but look at the bottom line... loss of over $340K (total deficit of over $8M!) Where is the money coming from to keep things going? They could be leveraging your stock to fund the company and you would have a difficult time knowing this. Funding was indicated as being through private placement, even though they did mention they were working with an "Investment Relations company" to "increase shareholder value", it was not in the same paragraph describing the financing. The ATYR 10Q specifically outlined the terms of the loan to finance ATYRs development costs and it is easy to determine the effect on the equity of shareholders (ie. interest payable in stock and redeemable at specific intervals by the financer). If KIK can qualify for the NASDAQ, they will attract a wider investment community and will be considered a less-risky play than an ASE stock. NASDAQ BB stocks are risky, but you can weigh that risk by analyzing detailed financial information required to be filed in a timely manner. I was critical of ATYRs last financial release because they filed a few days late which is taboo. Also, from looking at the KIK trades in May, it seemed like there was a lot of manipulation by big players: They got to buy-in at a premium, draw in smaller investors at inflated prices, then pulled the rug out from under them a few weeks later when the bid was high and pocketed quick gains causing the bid price to sink.
- ATYR has been developing their own Patented technology to capture what we all see as a HUGE POTENTIAL MARKET for flat-free tires. KIK does not have patents because the technology used is Licensed. This is only a agreement that the manufacturing process can be used to produce and sell products and adds no intrinsic value to the company. They must continue to negotiate and maintain the licensing agreement or develop their own process which does not infringe on existing patents. If they are successful, they better have legal protection on that process otherwise somebody will use the same process, call it their own, and the owners (ie. KIK shareholders) will be out of luck. Unfortunately, as we've seen with ATYR, this is a time-consuming and expensive procedure.
ATYR has been doing well this week, and I'm barely in the black with my holdings now. Urethane products have had difficulty taking hold, but the new generation of products seems to hold a lot of potential for competing against traditional tire technology. With successful manufacturing and marketing of the products, these companies will be able to recoup startup costs before giving up too much equity of those who supported the companies in the early stages. At this point, the stock could surge past 8 as it has done before, or sink back down into the 1s. |
