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Non-Tech : Littlefield Corporation (LTFD) -- Ignore unavailable to you. Want to Upgrade?

To: Jonathan Brown who wrote (6025)	12/27/1997 12:51:00 PM
From: Market Tracker	Read Replies (1) \| Respond to of 10368

Jonathan, Thanks for the analysis, both TA & FA. Looking at BNGO from no other point than cash in hand, we have a warrant call that produced 2.4/3.3= 72.7% of a potential $16.5 mil. or $12.0 mil. from the call. Mid 4th Q we had ~ $1-2 mil. cash on the books. Some minor cash can be added from DMS and G/S poolings. ( Always wondered why companies with a high free cash flow rates had such small amounts of cash on the books at the time of buyouts <g>). Will also assume 4th Q earnings have entirely been used in operations as a fudge factor. So at this moment, I AM GUESSING, we must have as a minimum $13-14 million $$ of cash on the books. At ~ 6% long bond rates = $ 780,000 pretax interest. At ~10% ROE = $1.3 MM AT ~20% ROE = $2.6 MM At ~30% ROE , (the company's stated goal), and I assume they are not playing semantics games, and are stating their projections as AFTER-TAX 30% ROE = $3.9 MM. These are my assumed rates of return on "new found money", which is basically money we didn't actually have in hand this time last year. If the company has progressed to this point from their initial public offering of $5.0MM in around 3 years, (even with the Fla. setback), they have shown me a couple of things, they know how to put money to work successfully, and turn it into intermediate-term growth, even overcoming ST obstacles,(FL). They have an enormous, (to me), stake in this game. The direction of their business model has remained unchanged since I first looked at the company 10 months ago. Their problem was they couldn't carry out their growth plan with their existing capital base. They had to get additional working capital to simultaneously fund current businesses, and expansion plans. Now they have that capital, (as painful as that process was). Yes there are risks, however those risks could be quickly and significantly diversified by putting say, $10.0MM into some form of a major Canadian project or the like. I like this one for the next 1-2 years as a start. Always do your own DD, and ALWAYS remember proper diversification theory. Gary