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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: DaveAu who wrote (12078)	2/8/2003 9:46:49 AM
From: Ron Nairn	Read Replies (2) \| Respond to of 14101

The current price vs. the price at announcing the RO reflects dilution at approx. 100% take up of the RO. Volumes have been insignificant so none of the larger holders have been exiting or playing games. I believe REK chose the RO at this time for several reasons and I believe she expects it to be sufficiently subscribed to meet the company's needs going forward. Failure to pull it off is not an option. I believe she still directly and indirectly influences control over sizeable blocks of shares. Holders of this stock are not supportive of more Aqua type dilution at this juncture (shall I say "on the eve of commercialization") I believe she is in the drivers seat with respect to choosing a new GB partner. The delay is being managed pending NA marketing approvals. I suggest that the pending legal claims from Provalis could be read in a positive light. It is still legally saleable in GB and if (1)it were not saleable or (2)it doesn't have significant potential in GB, why would Provalis concern and consume itself with frivolous litigation. If it were a dead product, they should be satisfied to just cut their losses and be done with it. It was REK's decision to drop Provalis, simply they didn't deliver and accordingly they lost the opportunity. Perhaps Provalis too, expected an earlier approval in NA from which to tag their marketing efforts and successes to. We'll hear more from Provalis post NA approval and selection of another GB marketing partner. Until then, they have filed claim and will wait. I believe the 'approvable" status in Canada confirms it will be marketable in the very near future. Does she want more/better labelling terms & conditions? I believe the answer to that is "yes" and so long as she feels she can financially manage the delay to get what she wants, that's her chosen path. The FDA process is an open process with respect to exchange of information between the FDA and the applicant. Lack of virtually any mention of FDA in recent PR's or conference calls is curious but understandable if final stage discussions are happening. This too, plays well into the RO scenario. Most commercial mortgage lenders make primary lending decisions on 3 factors. Market value, replacement cost and cash flow value. They generally benchmark the amount approved on a weighted average or the lower of the 3. Generally, mortgage lenders are primarily concerned with cash flow. Without sufficient cash flow, the lender will become a property owner by default to protect his investment. People who make mortgages generally don't make money by foreclosing on "specialty" properties. Unless the property is in generic high demand, like a single family residence, it quickly becomes a cash flow "liability" for the lender. (insurance, taxes, maintenance, litigation, security etc) DMX financial situation would have been scrutinized by the lender IMO and the company was sufficiently able to satisfy the lender that it was not on the verge of insolvency as many would suggest it is. Being "able" to get a short term mortgage for cash flow purposes could be viewed as an endorsement of expected cash flows. The lender "chose" to get involved. Lenders have many opportunities to lend and generally do not do so in anticipation of foreclosure...especially on "specialty" (limited resale market) commercial properties. I suspect REK has a figure in mind that she expects and will get from the RO. If she expects full subscription the company will either announce a white knight or positive news to boost the stock price. If no white knight is announced, we should expect favourable news pre expiration of the RO. That is assuming that full subscription is her desire. Alternatively, if she is comfortable say with 25% subscription and knows she has it, then her sphere of influence S/H's will be the supporters that she needs and will benefit alone with less dilution. Other S/H's will have "chosen" not to participate and will have no basis to complain. As for Tom Stanley...mutual funds report returns quarterly and annually. He cannot afford to buy a sizeable stake in an illiquid (low volume) stock. He is not in this for a double in 2 years. He has taken a sizable stake with a much shorter horizon than most investors. His DD supports my belief that good news is very near. That's it for my Saturday morning musings. As always, just my opinion, nothing more. Rondo