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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Captain Jack who wrote (7888)	12/25/1997 11:55:00 PM
From: Jack Zahran	Read Replies (2) \| Respond to of 31646

TPRO had a whole month between news releases. But, it was positive that they held their price for four weeks without any news from the company. I also have been researching the debt situation of TPRO and from a cursory glance TPRO has done a good job of putting their affairs in order. You really got to respect the investors who have stuck with TPRO from June 97. TPRO has reduced their debt from 7 Million to 4 Million in just the past few months. Of the 4 Million, they do not need to start payments on 2 Million till 1999. In the past the company stated (if I remember correctly) that they will use 50% of the money they raise from offerings to reduce their debt. Since September 1, 1997 they have raised approximately $8 Million. I imagine then that the $2 Million dollars they are currently paying on can be eliminated. With the reduction of debt and the protection they set up against bad receivables, they do not look very attractive as a short candidate based on cash flow problems. The next area that makes a stock a potential short candidate is dilution. It appears that this would be a major concern if the dilution happened faster than the market could absorb it. I was encouraged though by the way the company is managing the dilution. Besides the Warrants it appears that the company has taken efforts to manage the dilution. For example, there are 1,694,737 shares that will not be registered that were a result of the ACS acquisition. 99,999 other shares cannot be registered till September 1999. There are conditions and time requirements for the sale of other shares. The company had to register the 133,340 preferred shares or risk further penalties, so 50% of the shares being registered that were not already counted in the oustanding volume, were being registered by force of the rules governing the preferred offering not necessarily by a desire of those holding them to actually sell. In fact the company stated that they contacted those holding the shares being registered and none had intentions to actually sell. With that said, the S-3/A sheds some positive light on the dilution issue. In the past we had assumed that we would have 23 Million shares outstanding by the time the Y2K revenue started coming in. That is actually not the case, with the dilution being slowly poured into the market, it should have a nominal effect on investor value if the company announces more frequently. I am confident that that will be the case since they will have two pilots finished by 12/31/97 as previously announced. As well as all the other January 98 news we hope to read about. It would be a pretty risky position to short TPRO at this point. No wonder the short interest peaked last month and started to decrease. The shorts should be able to eat up a lot of that dilution as they cover on their own. :) Looking forward to 98, Jack Zahran