Footmaxx YFT on CDNX Message Board

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Gold/Mining/Energy : Footmaxx YFT on CDNX

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To: Cush who wrote (14)	1/2/1999 2:46:00 PM
From: Rob	Read Replies (1) of 64

A chiropractor friend of mine asked me to look up this stock prior to investing in it. I otherwise have no interest in this stock but thought I would share my findings for those on this thread to pursue and discuss: Negatives - trades only on OTC exchanges which are subject to greater manipulation and less regulatory requirements - Not likely to meet requirements to qualify for a major exchange anytime in the next year or two. This will not happen until it can show a reasonable chance of profitability and raise capital requirements - 35 million shares issued; probably about 40 million fully diluted - share price $.57 gives it a market cap of $23 million with no positive earnings in site - poor balance sheet and earnings statements - I don't see many value investors buying this one. - net operating cash outflow of almost $10 million a year Based on current sales growth and profitability it would take another 1.5 to 2 years for the company to earn its first positive $ of earnings requiring perhaps another $20 million or so in financing to keep it afloat. (Based on past cash use, its probably almost through the cash received from VenGrowth in September and will be looking for more shortly). This would further dilute the stockholdings to perhaps 70 to 80 million shares with still only the expectation of positive earnings - does not seem like a huge market - its not likely that this company would ever grow its product sales into the $100 million range although those in the industry would be better to judge - selling and admin costs are over 100% of sales - this is a strong indicator of possibly mismanagement - financials - always worth questioning with OTC companies. - strong support from VenGrowth funds who now owns approx 40% of stock but is a small fund ($111 million). Such a large ownership position in a company appears to be inconsistent with their mission of not controlling their investments. The recent investment was largely a conversion of debt and perhaps speaks to the fact that VenGrowth sees no other choice but to start to have an influence to improve management and cut costs to save its investment. - difficult equity markets for these types of junior companies - This company reminds me a little of a VSE company (dba Telecom) with a great product (with much larger market potential) which recently went bankrupt due to a liquidity squeeze and poor management. positives - 52 % gross profit margins - a new director - strong support from VenGrowth funds - a market leading product - not capital intensive - strong sales growth (but not incredible) Questions or issues: - How much support will VenGrowth really provide going forward? At what point does it cut its losses? - Will management become more efficient and better manage costs to make this company profitable? - Is new management required and if so what turmoil would result? - Can management continue improve sales growth to bring the company into profitability? - what is the potential size of this market and what portion can Footmaxx expect to obtain and how quickly? - what are the barriers to entry? Is there a patent? If so who holds it? What are licence fees etc? Bottom line - can the company be turned around before it runs out of investors to support it? If so then IMO it still will not be able to justify its share price in the near future but could rise on speculation, positive sentiment or just plain pumping (then dumping). Note these are only my personal opinions based on about an hour of research - There is much more one could do. There may be more positives and negatives that I am not aware of or more information which would cause things to look a little differently. Good luck and I hope this helps some potential investors to check out the fundamentals further. some sites which I used to get my information footmaxx.com sedar.com./cgi-bin/searcher?profile=pc sedar.com sedar.com bpifunds.com

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