Letting a fool say anything they want is OK by me, as long as they do it out of my sight, hearing and reading.
I take it you haven't looked in the mirror lately.
Seriously, and with all due respect, this may be a case of 'it takes one to know one'.
I refer you back to LUMM's most recent earnings release:
freeedgar.com
>>>>
Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999
The Company is a Development Stage Enterprise, which has not, during the three months ending March 31, 2000, realized any revenues from operations. Interest income, consisting of interest on cash and term deposits, earned during the three-month period ending March 31, 2000 amounted to US$89,968 (CDN$130,400 compared to US$901 (CDN$1,370) for the three-month period ending March 31, 1999, an increase of US$89,067 (CDN$ 129,030). The increase is due to the fact that the Company had more cash on hand during this quarter than the same quarter last year as a result of capital raised through private investments and the exercise of warrants and options.
Research and development expenses for the three-month period ending March 31, 2000, net of research tax credits, were US$107,942,080 (CDN$156,451,251). Of these costs, US$107,527,160 (CDN$155,849,866) are non-cash expenses resulting from the issuance of the Company's common stock in consideration of certain services rendered by Molex Incorporated ("Molex") under the terms of a Teaming Agreement dated May 19, 1999 between the Company and Molex for the joint development of certain products related to the Dense Wavelength Division Multiplexing ("DWDM") market and other photonics markets. The common stock will be issued to Molex on partial exercise of a Services Common Stock Purchase Warrant for 5,800,000 common shares granted to Molex in connection with the services to be rendered under the Teaming Agreement. The warrants expire in June 2001 and are subject to Molex fulfilling its obligations under the Teaming Agreement. During the quarter ended March 31, 2000, based on Molex's estimate of the cost of its work under the Teaming Agreement, 3,425,280 common shares are issuable to Molex at the average monthly market price of the Company's shares during which the services were rendered.
The Company's research and development expenditures, other than those recorded under the Services Common Stock Purchase Warrant, net of research tax credits, were US$414,920 (CDN$601,385) during the three-month period ending March 31, 2000, compared to US$46,330 (CDN$70,468) for the three-month period ending March 31, 1999, an increase of US$368,590 (CDN$530,917). During the comparable period in 1999, the Company incurred little research and development expenses because it was not yet engaged in full operations (almost exclusively financing activities). At March 31, 2000, the Company had an existing operation consisting of a research and development staff of 24 employees, a facility, a Teaming Agreement with Molex and an expansion project underway. During this period, Lumenon designed new DWDMs products and Wide Wavelength Division Multiplexin ("WWDM") products, developed materials and processes and produced prototype devices.
General and administrative expenses (including foreign exchange and interest expenses) were US$914,687(CDN$1,325,747) during the three-month period ending March 31, 2000, compared to US$69,257 (CDN$105,340) for the three-month period ending March 31, 1999, an increase of
US$845,430 (CDN$1,220,407). The charges for this period consist mainly of salaries as a result of the increased number of administrative personnel and related expenses to manage the increased activities of the Company from its expansion project and implementing such expansion project. As a result of the above, the Company's overall loss for the three-month period ending March 31, 2000 amounted to US$108,766,79(CDN$157,646,598) or US$4.17 (CDN$6.04) per share, compared to US$114,686 (CDN$174,438), or US$0.0070 (CDN$0.0106) per share for the comparable period in 1999. . . .
Cash and cash equivalents. . . $ 1,279,966 [that is not in thousands and does not reflect the more recently-announced financing.]
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As I've said all along, there is nothing wrong with a company being in start-up mode. But there is something wrong when management expects public shareholders to finance what should have been private-placement shares at public equity valuations. Considering the risks involved, shares should be appropriately priced.
Of more immediate interest, note the vesting schedule:
c) Warrants:
The following warrants are outstanding at March 31, 2000:
Warrants Expiry date Exercise price per share
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1,210,000 August 2000 $ 1.30 (US$0.90)
282,000 September 2000 8.70 (US$6.00)
21,500 September 2000 13.04 (US$9.00)
10,700 September 2000 8.70 (US$6.00)
10,000 October 2000 14.49 (US$10.00)
43,011 December 2000 33.34 (US$23.00)
960,000 June 2001 2.17 (US$1.50)
500,000 August 2001 1.30 (US$0.90)
1,664,851 August 2001 *
400,000 October 2001 1.30 (US$0.90)
30,000 October 2001 1.30 (US$0.90)
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5,132,062
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Pat |
