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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services -- Ignore unavailable to you. Want to Upgrade?

To: CO who wrote (3056)	2/11/1998 6:57:00 PM
From: Little Engine	Read Replies (4) \| Respond to of 27968

What's Ira been doing with all this money he supposedly has? The first half 1996 financials said FAMH had $750,000 in the bank. If shareholders are to believe the "30 percent net profit" fairy tale, then conservatively they had at least $1 million left over (after expenses, taxes, etc.) from the second half, as well, at the end of the year. Okay, we'll put that in the bank, too. Up to $1.75 million now. What about the stock sales? Going from 20 million to 28 million? I'll give FAMH the benefit of the doubt and assume 28 million was calculated after the 2.5 MM given to Myriad as part of the deal. So FAMH brought in money from selling 5.5 million shares of stock. Let's be conservative, again, and estimate they only got .20 for the stock they sold. There's another $1.1 million. Up to about $2.8 million after that is added. So you are Ira. You are sitting on $2.8 million in cash. The Myriad deal comes along... and what do you do? You pay them $350,000 in cash, and issue 2.5 million new shares of stock! The stock was worth, at the time, about $900,000 I believe. Why in the world would you issue more stock if you a) honestly have lots of cash sitting around; and b) make noises about propping up the price via stock buybacks? Why not just pay them the $900,000 as well.. you still have $1.5 million left, right? Why dilute your earnings if you have more than enough money to avoid that? Why add more shares to an already bloated total? Ira is going to issue more stock, then buy it back? Huh? Why didn't he just buy some back when there was less of it? Shouldn't you, as a company president, USE some of that cash hoard before establishing huge lines of credit and issuing a lot more stock? And of course, per Ira's last conference call, the line of credit involves... issuing more stock. Constantly issuing stock to use in lieu of cash doesn't make sense... unless, of course, you are not making 30 percent profits to begin with.