Kaire Holdings - $0.50 stock- $3 to $4 Book Value Message Board

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Microcap & Penny Stocks : Kaire Holdings - $0.50 stock- $3 to $4 Book Value

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To: JIN CHUN who wrote (553)	10/12/1998 9:49:00 AM
From: Stephen Goldfarb	Read Replies (1) of 1640

Jin: I believe Baldur's post was to exemplify the kind of thing that could happen, not necessarily what is actually happening with KAHI. The major influence that we are aware of is substantial convertible debt. I don't remember the exact figure, but I believe it was in the high hundreds of thousands of dollars. The holder of the debt could create shares and sell them into the market as a means of regaining cash. That would cause downward price pressure. It also has caused an extraordinary increase in the outstanding shares. After the split, there were only a few million shares. These are now reportedly increased to somewhere in the range of 12 to 16 million shares. I don't know actual figures. Another issue is the financial condition of KAHI. They do have a blood monitoring company. It is reported to be profitable. It was described to me that this company is what paid the bills for KAHI. According to a KAHI official, by cutting KAHI expenses to the bone, KAHI was able to make a slight profit. I believe this was in the most recent quarter. I don't have specifics. The other issue related to the future fate of KAHI has to do with its attempt to acquire Kaire International. Kaire International is in a turnaround situation. They have suffered multiple year losses. Their accountant questioned the ability of the company to survive as a viable entity. Among other things they need cash. KAHI initially acquired something in the neighborhood of 80 or more percent of Kaire International. They then could not make payment on the acquisition, and had to raise cash by selling to another entity. That may be the entity that has been converting shares. Don't know for sure. Therefore KAHI's holdings were reduced to about 22-23 percent. As far as I know, everything hinges on Kaire International's ability to successfully complete the IPO. That gives substantial assets to KAHI, which presumably can be used to pursue other acquisitions. I believe it is necessary to complete the acquisition of a portion of Potomac Chemicals. To paraphrase one official, he didn't believe KAHI was a good investment unless the IPO for Kaire International was completed. That was a couple of months ago. Ordinarily, one would expect anticipation of the IPO to create demand and accumulation. It is unclear how much this is happening in view of the dismal price action. There is no "red herring" (preliminary prospectus for the IPO) as of yet. I believe an assessment of the potential viability of the IPO needs the "red herring." The bearish and volatile market climate creates hesitancy and doubt. Other factors about Kaire International may create wariness. Hard to tell what is driving those who exhibit unbridled enthusiasm for the stock. Some people are just of an enthusiastic disposition. Of course one is always wary on these BB's of the motives of posters, one way or the other. This is my understanding of what is happening. This scenario may already be known to you from previous posts and your own research. Steve

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