Here are some very good questions that were send to me via e mail and my answers:
(1) It seems to me that the ability of the company to get their product to market in a timely fashion will impact how much revenue and earnings they reap from it toward their end of year earnings reports. This leads me to two questions: first, who is going to be manufacturing the CAPSCAN device for EVDS? Do they have the facilities available and on-line to begin production themselves or have they contracted another company to handle the manufacturing? Depending on that answer: (a) if themselves, do they have the working capital and factory capacity to turn out a meaningful quantity of CAPSCAN devices in order to keep up with demand? (b) if another company, is a contract in place? how will this affect EVDS' margins on the product? is the other company going to be a reliable, stable source of production?
EVDS already has contracts in place with three separate companies to manufacture the CAPSCAN device. They are all either ISO 9001 or 9002 certified. The production capacity at each individual company will be for at least 6,000 CAPSCANs a month but more could be made. So you see EVDS has already contracted to provide more manufacturing capacity than deliverable product. This will not adversely effect profit margins because it has always been factored into the company's earnings estimates. I was told that they have plenty of working capital so there is nothing to worry about along those lines. I can't say for certain but it seems to me that the product has been fully tested at a regional headquarters for Texaco. I find that pretty impressive. There may be some initial orders already in place but not announced. Who knows? But it does sound like all the ducks are in a row.
(2) When does the company plan to begin full production of CAPSCANs? Do they have a firm deadline in mind? Are there any obstacles that are currently in sight that could affect the company's ability to begin full-scale production and distribution on time?
I asked this question earlier when I was doing my own due diligence. As I said in an earlier post they will have the first 100 done and ready for trade shows before the end of September. Full production will begin in October. They will begin delivering CAPSCANs by November 15th and certainly hope to sell enough product to meet or exceed the 6 cent estimate for the fourth quarter. No obstacles in the way that I am aware of at this time.
(3) You've mentioned that the company also has a traditional construction and remediation arm that has already booked a sizeable contract. With the potential for the CAPSCAN so great, I'd hate to see the company held back by other ventures that could possibly suck earnings and resources away. Is this construction/remediation business stable and profitable? A large contract doesn't necessarily mean large, if any, profits. What are the company's plans for this part of their business and do you and/or they see this segment of their operations conflicting in any way with CAPSCAN or could there be a beneficial synergy between the two?
EDSi Construction and Remediation is indeed profitable. The lowest profit margins that the company would ever accept would be in the neighborhood of 10%. The $4.5 million contract for the 50 fast food service stations construction should result in around 18% profit. There is no doubt that these businesses are synergistic. Each of these stations will have 4 USTs in need of CAPSCAN devices. Furthermore although it has not been announced who the contract is with I think it's highly likely that there will be a deal for CAPSCAN devices for the entire service station chain. Admittedly I am putting my imagination to work here but is that all that far out of the range of probabilities?
(4) Finally, I've noticed there isn't much activity on the SI thread. Of course, this doesn't necessarily mean anything, but do you think EVDS will be able to attract investors interested in the company's product and stock? It seems that many investors, and certainly institutional investors, won't even touch BB issues. I'm afraid that this could undermine the possibility for any serious appreciation in EVDS' stock price. You mentioned that EVDS will attempt to become listed on the NASDAQ. Do you have any information on what kind of timeline they have in mind? How do they plan to accomplish this? Do you think they can achieve the $4 price requirement anytime soon?
Actually if you compare the EVDS thread to many others it's not that slow. Many people merely lurk rather than post even if they have the ability to post. I know several of my friends who have bought stock in EVDS simply let me do all the work on the thread. Shame on them!
As for EVDS being an OTC BB stock and the question of institutional investors? You are right, some institutions are not allowed to buy until a stock reaches a certain price level. Some can't buy OTC BB stocks at all. This is not the case for every company or institution. Once again let your imagination go to work. If you believe as I do that EVDS has an exceptional product in the CAPSCAN, with incredible earnings potential, then you will see why it's possible that institutional buying is already waiting in the wings. All we need is a rise in the stock price. It seems to me that if EVDS can show they are going to actually earn that 6 cents in the fourth quarter then the stock price will rise to the $4 necessary and perhaps higher before year end. EVDS plans to be fully reporting by December 31st of this year. That means they intend to meet all the necessary requirements to achieve a NASDAQ listing. Can they do it? Time will tell. Oh one other thing. I asked about the web site and I was told 14 to 17 days. The hold up right now is customizing software for online orders of CAPSCAN devices. If it happens that quickly the company will actually beat the one month estimate I was initially given.
InvestRight
Regards, Jeff
|
