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Biotech / Medical : Continental Home Healthcare -A Demographic Play -- Ignore unavailable to you. Want to Upgrade?

To: Edward W. Richmond who wrote (57)	7/3/2000 11:47:53 PM
From: Edward W. Richmond	Read Replies (1) \| Respond to of 69

I attended the AGM in Vancouver. Probably the best news item is that stock options have not been re-priced downward as the stock has declined. The second best news is that the 4,823,463 warrants exercisable at $0.60 will likely expire worthless on August 28, 2000. This would remove a huge stock overhang and, in my opinion, let the stock price begin to appreciate. I see a number of positive developments in the last year. 1. British Columbia, now producing only about 10% of the company's revenue, is now about to become profitable in spite of the closing of the Kamloops and the Kelowna operations and the settling of a minor lawsuit. The 30% growth in the Vancouver branch is commendable. 2. The expected launch of the e-commerce program in the year 2000 will provide another avenue for business. 3. The "preferred provider" status that CHT enjoys with several hospitals, national insurance companies and managed care organizations such as Blue Cross Should provide significant, ongoing revenue. 4. During 1999, 55% of revenue was funded by provincial, state or federal governments. We may not like them, but they do pay their bills. 5. Rental revenue has grown to $3.47M in 1999. Rentals can be a very lucrative business in the healthcare industry. 6. The P/E ratio, fully diluted is $0.53/$0.037 = 14.3. This is pretty conservative for a company that is growing both the top and bottom line. I would expect to see some P/E expansion when the warrants overhanging the stock expire. Any observations or opinions would be appreciated. Regards, Edward