Please post the section of the filing where you determined that they only had US $5MM in cash at the end of the quarter.
From the March '01 10-Q:
Cash and cash equivalents, beginning of period 5,713
They have more than a year's worth of cash on hand, and that is before any burn rate reductions undertaken by the new CEO, Gary Moskovitz.
sec.gov
Expenses in Q1/01 were $5.4M US; expenses for 9mos ending Q1/01 were $43.2M US. The following paragraph outlines the non-cash charges which result in G&A of $3M US for the March quarter and $7.6M US for the last 9 mos.
General and administrative expenses were CDN$4,837,000(US$3,067,000) during the quarter ended March 31, 2001, compared to CDN$1,152,000 for the same period in 2000. General and administrative expenses were CDN$12,119,000 (US$7,683,000) during the nine-month period ended March 31, 2001, compared to CDN$2,329,000 for the same period in 2000.
Based on the fact they were in their new facilities only 5 of those months, and the fact they've added personnel in recent months, how do account for $17M being sufficient to last a year?
On October 6, 2000, the Corporation inaugurated its current 53,000-square-foot facility. This state of the art facility serves as the Corporation's headquarters and high volume manufacturing plant and supports Lumenon's capability to develop, micro-fabricate, package and test integrated optical devices in high-volume.
For press release on new facility, go to LUMM's website and click on "press releases:"
lumenon.com
Again from the 10-Q:
Excluding this non-cash item, the increase in general and administrative expenses during the three- and nine month periods ending March 31, 2001 would be CDN$2,785,000 and CDN$8,890,000 respectively. The increase is mainly attributable to our growth during the last year and, in particular, during the six month period ended December 31, 2000. During the nine months ended December 31, 2000, we hired twenty-two employees, excluding hirings in our research and development department, moved our headquarters to a new facility, built a full manufacturing facility, continued to develop our infrastructure, increased our sales and marketing activities, including attending the Optical Fiber Conference 2001 and increased our manufacturing activities to provide sample products to customers.
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It is just this kind of post that has earned you a reputation for distorting the truth to make it fit your preconceived notions
Please explain how I've distorted the truth. Also explain how $17M will last the company a year when the above management discussion indicates expenses are rising.
A couple other issues you may not be aware of. If number three doesn't raise a red flag, nothing will:
1) patent position:
We may not obtain meaningful protection for our technology and products with the patents and patent applications that we own or license relating to our
technology. In particular, the patented technology that we license from Polyvalor and McGill University has also been licensed to QPS Technology Inc. To the extent that QPS Technology Inc. is able to design products competitive with
ours without infringing on our intellectual property rights, we may find it more difficult to achieve market penetration with our products and, consequently, our
potential revenue stream could be reduced.
Not only does LUMM not have its own patents, but their licensing agreements with McGill and Polyvalor are not exclusive.
2) Polyvalor, McGill and Molex control more than 50% of the shares:
As of the date hereof, our management, Molex, Polyvalor and McGill University, collectively own in excess of 50% of our outstanding common stock. Together, they determine the composition of the Board of Directors and will be able to
determine the outcome of corporate actions requiring stockholder approval. This ability may have the effect of preventing a change in control that may be favorable to other stockholders or causing a change of control that may not be favorable to other stockholders.
And 3)LUMM's CFO has left:
As of May 15, 2001, Vincent Belanger is no longer our Vice President of Finance and Chief Financial Officer. Our President and Chief Executive Officer, Gary Moskovitz, will serve as our acting Chief Financial Officer.
Pat |
