Copied from Rover13 on Stockhouse online:
"Notes from the MRI Shareholders Meeting of January 15, 1998
1. Mr. Talbot started by the highlights of the previous year; he was speaking faster than I could write. What I picked up (hope I did not misinterpret anything):
1.1 Operating profit last year was $154k, 1st fiscal quarter $83k, 2nd quarter not final but estimated at $180k (also see note 4.2 below)
1.2 Forecast procedures for 6 months were 3300, actual exceeded 4400; occupancy since December runs at 93%; staffing was increased to satisfy demand; bookings already taken up to Feb. 2000, New-Year 2000 booked solid; surgical suite being installed; diabetics treatments performed; use of high tech medical equipment available nowhere else in the Caribbeans; not a cent spent in advertising as yet.
1.3 Forecast of $3.4M in Sales for fiscal 99 (excludes Vancouver clinic - I think)
1.4 In Anguilla, proprietary brand of vitamins, medicaments and drugs has been launched;
1.5 Chelation procedures were started in Anguilla on December 1st; some 600 chelation procedures should be completed in the months of Dec, Jan, Feb.
1.6 Vancouver Chelation Clinic has just been announced. Fiscal 99 estimates:
chelation only: revenue $900k profit $110k
total (including dialysis - part year): revenue $1200k profit $160k
There will be no Vancouver clinic estimated results built into the 2nd and 3rd
quarters data; the total year profit in its entirety will be booked in the 4th quarter, after
having been fully audited (to avoid bad surprises like with Healthshield where
estimated profits turned into actual losses at year end). Likewise, the payment for
the Vancouver Clinic (which will include assumption of liability for equipment
leases, cash, shares frozen for 3 years and special warrants at a significantly higher
level than current share price) will be finalized after fully audited year-end statements
are produced for the clinic).
1.7 Little progress in Cuba due to difficulties in dealing with another language and water quality issues.
1.8 Moving ahead for dialysis in England; issues are worked on, re regulations demanding that the head people be British, whereas MRI wants Canadians.
2. Questions period followed (most questions refer to my personal interest):
2.1 What exactly is Seafeathers? Seafeathers is the Company owning the resort. Hotel de Health currently owns 45% of Seafeathers, and MRI currently owns 62% of Hotel de Health.
2.2 What exactly are the "non interest bearing advances with no specific terms of repayment" of $1.4M ($1.38M in 1997) in note 5 to the financial statements?
They represent the amount owed by the owner of the balance of Seafeathers for its
share of the renovations and expansion expenses. Payment is made on December
31. The amount shown in 1997 was reimbursed. The amount in 98 represents new
expenditures to be reimbursed on Dec. 31, 1998.
2.3 How many shares did the insiders sell over the past 12 months? None. He can say so because the company has to file insider trading reports and none have been filed.
2.4 Is there any intention to move MDRE from the OTC to another (real) exchange? Not in the immediate future. While MRI currently satisfies the criteria to trade on the TSE, it takes a 4 to 5 months process to get the TSE approval, and after that, there is a higher level of compliance and reporting required. TSE listing and the support such a higher level of reporting would cost about $80k to $90k per year, compared to about $20k for the OTC.
2.5 Around the same time last year, there was talk of a number of dialysis clinics to be opened in locations such as Halifax, Quebec City, Edmonton, etc…what happened to those plans? The company changed its strategy to the purchase of existing chelation clinics. It is more economically feasible to purchase operating chelation clinics and add dialysis chairs at a relatively low cost, than to create dialysis clinics from scratch, which would require the outlay of significant amounts of cash before the first client sets foot in the clinic. In addition, the company benefits by adding chelation to its services. Chelation is very well known in Europe and S.E. Asia, and there are some 600 chelation clinics in the USA. Plans for a chelation and dialysis clinic in Toronto are currently moving ahead.
3. Other information/tidbits gathered during and after the meeting:
3.1 Mr. Talbot is currently working on a project which, according to US brokers, should make a significant difference in the market. If successful, it should be concluded in about one month. According to Mr. Talbot, at this stage, chances of success are about 75-80%.
3.2 The breakup value of MRI has been evaluated by different parties to be from $0.26 to $0.60 per share. The company estimates MRI to have a $0.36 per share breakup value.
3.3 Insiders own 43% of the stock. As of September 1998, 4.8 million shares were held by 194 US shareholders.
3.4 Mr. Talbot has no idea when the shares will properly reflect the value of the company. The shares are still very much at the mercy of the 7 Canadian MM's which have no interest in seeing the price go up. He estimates, based on the volume of trading over the past year, that they made $3.8M in commissions. He hopes that the Nasdaq BB listing will move shares in US hands and therefore decrease the influence of the MM's. The company is hiring I.R. help to make the company more known, but there is no intention to hire "promoters" again, as they are very expensive in cash and options demands, but what they are doing is not worth the cost. They will attempt to get more exposure in investment newsletters.
3.5 A question was asked about an unpaid bill for reprints of a BLSH analysis of the company. Mr. Talbot indicated that the reprints were intended to be included in a mailing, and that the reprints arrived one month too late and were therefore of no use. They still sit in MRI's office.
4. My personal comments.
4.1 I found Mr. Talbot very open in answering questions; the question period was not limited and ended when no more question came up. He appeared to me as a business man who knows he has found a good and profitable business niche and intends to grow the business, and not as a "pump and dump promoter" (Yes, Peter 41, I know he knows how to manipulate people and I am gullible like a newborn baby, and you are the only trustworthy soul around).
4.2 After the meeting, I went to see Mr. Talbot to ensure my understanding that the significant expenditures in renovation and expenses were directly expensed rather than capitalized. He confirmed. I made the remark that these expenditures are probably contributing to keep net profit at a relatively modest level (my personal opinion), and that, after the renovations and expansion are completed (in March, if I am not mistaken), we should see improved profitability. He concurred and commented that the 4th quarter will surprise many people because, in addition, the 4th quarter will include the Vancouver chelation clinic profit.
4.3 Where does that leave us? As far as I am concerned, I own a fairly significant number of shares and I am satisfied that the company progresses to my satisfaction. However, I think there should be more effort to convey to shareholders what the company is accomplishing (e.g. the quarterly results news release could include a few sentences on the status company current activities/performance). As I have already explained on this forum, my horizon is 2 to 5 years, and I expect the company to have, at that time, escaped the manipulations of the MM's (via shares in US hands and what I expect to become gradually compelling fundamentals) and to bring me a very significant return. Those who expect to see the improving fundamentals immediately translated into a higher share prices, may be disappointed. I don't expect to see such a direct relationship as long as the MM's are in a position to manipulate. And for those who want to flip the shares for an immediate profit, they might better put their money in the something.com of the day. In my mind, this is the time to accumulate, not the time to reap yet.
4.4 I forgot to ask about the 31 million shares being reported as issued on the 1st Quarter results news release. The same number is reported on the Vancouver clinic news release. In my mind, it is simply an oversight on a preprinted news release format.
4.5 I hope I did not misrepresent anything.
I don't plan to enter into a debate with Peter41 and will ignore his valuable contributions. The only thing I am interested in learning from him is: in view of the very small portion of his portfolio represented by MDRE , why does he spend so much energy trying to run it down? Oh! For altruistic purposes!?
Rover13" |
