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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: ED S. who wrote (31526)	6/20/1999 3:28:00 PM
From: Tom	Respond to of 44908

Ed: Since Zeev hasn't responded, perhaps you can answer your own question for us? How "do" and "can" companies defend themselves?

To: ED S. who wrote (31526)	6/20/1999 3:35:00 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 44908

Ed, once corporate management signed on that dotted line, they are at the mercy and good will of the bandits. The only recourse is getting non toxic financing. With a company like TSIG with what $30 MM in negative book value, or accumulate deficit (I am not sure which one anymore), the risk to a lender are great and thus they would not lend. That is why when you hear of "plans" to get hundreds of millions in sales, you should always be extremely careful and ask yourself a simple question, where will the money come to support that kind of sales increase. As a rule of thumb, you need at least an additional $.30 in working capital for every dollar of additional sales, that has to come from the bottom line, but before you have a bottom line you must have financing. At the time, when the company accessed the bandits' PP channel of money, they could have possibly gone to the shareholders with a "right offering", that would have circumvented the need for secondary issue. But they did not chose to do that. In all fairness, the gobbling of shares by Gordon did not help either, being an insider, he was the ultimate floorless bandit, loaning money to the company at $.15/share or so and selling to the public above $.40 or so. Furthermore, he repriced many of his options after failing to get the company off the ground at prices in the $.15 to $.2, and he was extremely generous to himself with these options as well as with the free grants of shares. When you see a CEO doing that, forget about the dreams he is telling you about and keep away from the company. The fact of the matter is that even if the two business can generate the hundreds of millions in sales both David Gore and Suzanne were told about, they will not have the working capital to support these sales and go down the drain, IMHO. Cash is what makes business run, not wet dreams. Zeev