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Gold/Mining/Energy : Image Processing Systems (IPV-TSE)
IPV 4.310-4.0%Jan 24 4:00 PM EST
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To: Luc N. who wrote (393)8/26/1998 9:52:00 PM
From: John Wright  Read Replies (1) of 658
 
Luc, easy now the class action stuff. All I'm saying is that I believe the company had an 'immediate' fiduciary duty to disclose to shareholders any accounting irregularities that may have arisen during fiscal 1998. I'm not so sure the company 'immediately' disclosed the irregularities when they came to light. My losses in the company have been relatively small so I will not be allocating any of my limited time to pursuing the issue. I will, however, make the following points:

1) Terry Graham may have grown the company's top line (i.e. sales)
however he has left the company in such dire financial straits
in terms of liquidity (i.e. cash flow) and profitability that I
really question the company's ability to continue as a going
concern. At fiscal year end the company had $3.4m cash on hand
with operating loan advances of $3.2m. Additionally $2.4m of the
company's cash has been assigned to the company's bank. In short
the company's cash balance at year-end was 200k! Obviously more
cash will have to be raised.

2) During fiscal '98 the company raised $15.5m in new equity and
amazingly squandered all of it by massively overpaying on the
Tisma acquisition.

3) The company says they will put in place additional debt and/or
equity (really now!!!!) funding to strengthen their cash position.
My question is "Where do they ever expect to raise new equity
from?" Who will take such substantial liquidity risks for what
would seem to be a tenuable(sp????) payoff? When 75% of existing cash on hand is already assigned to the bank who will provide the
company with more debt? No one?

4) As I mentioned in my earlier posts, I'm astounded that Terry
Graham has been so lucratively rewarded for running the company
into the ground. How does anyone justify a 30% pay increase and a
bonus for all the crap that happened in fiscal '98? He might be
great at P.R. and Sales but I think that's where it ends. Or a
least that's what the fiancials show.

5) In my opinion the company will not secure any cash, debt or
equity, will be delisted from the TSE and will be operating in
receivership before fiscal '99 is through.

Thoughts, opinions, anyone?

John




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