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Microcap & Penny Stocks : The Henley Group, Inc. (HNLY) undervalued growth company -- Ignore unavailable to you. Want to Upgrade?

To: Psycho Killer who wrote (1109)	3/30/1998 3:58:00 PM
From: Jeff O.	Read Replies (1) \| Respond to of 2232

James, I noticed you are an attorney. I have a problem with HNLY's web site also. They forecast great numbers in revenue, but do not include one ounce of solid information on how they will accomplish this. I hope you are wrong but appreciate your time and research. Let's find out what's really going on with this company. Instead of selling us with great $$ forecast, they should provide more info on their leadership and current work in progress. Not just marketing hype about MM's and the sort which have nothing to do with a viable core business, just the game itself.

To: Psycho Killer who wrote (1109)	3/30/1998 4:28:00 PM
From: Psycho Killer	Respond to of 2232

Is HNLY Mr. Swarzman's personal piggy bank? Anyone considering putting serious money into this stock should first read the last Form 10KSB filed by Advent Technologies, Inc. The Advent filings show a setup designed to enrich management -- specifically, Mr. Swarzman -- whether or not the company succeeded. Mr. Swarzman was giving himself 20 percent annual raises while his company was bleeding red ink. Advent was a predecessor of HNLY. Before HNLY came Orexana Corp., which apparently shut down and then reopened; acquired Advent Medical Services; and then changed its name to Advent Technologies, Inc. Advent later changed its name to NewReach, and then changed it again to HNLY. According to the folks at Disclosure, Inc. (who I called to get the Advent SEC filings, which are not available though the computerized EDGAR system), neither NewReach nor HNLY has made any substantial filings with the SEC. So . . . to get financial info on the company, you have to go back to Advent's last Form 10-KSB (filed 6/27/94), and, if you like, Advent's last Form 10-QSB, filed 2/15/95. A review of the Advent filings shows a few things of interest: 1. Advent kept acquiring companies, and kept losing money. For the years ended 3/1/93 and 3/1/94, Advent lost $1.4 million and $2.1 million, respectively. 2. Advent's tangible net worth was way negative. The company, in its last 10-KSB, claimed shareholders' equity of about $2.1 million -- but $6.1 million of its assets consisted of intangibles such as goodwill. 3. Advent's acquisitions resulted in significant dilution and debt. On May 8, 1992, Advent acquired all the outstanding common stock of The ReMax Group, Inc., a Medicare reimbursement consultant. Payment by Advent was in the form of 1.36 million shares of Advent, as well as a $4.9 million in notes payable. On March 16, 1993, Advent acquired rights to two "devices utilized in the treatment of pain and decreased function associated with inflammatory diseases such as arthritis," and paid about 797,000 shares for these rights. On May 2, 1994, Advent acquired all the outstanding stock of Delta Med, Inc., for $200,000 cash, a note for $150,000, and 130,000 Advent shares. 4. Mr. Swarzman paid himself handsomely, even as his company lost money Although Advent was losing money, Mr. Swarzman -- who had direct holdings of 31 percent of the Advent shares; some additional indirect holdings; and a ton of options -- gave himself a big fat contract. In July 1992, the company entered into a 5-year employment agreement with Mr. Swarzman. (I don't know whether this 5-year employment agreement is still in effect or not.) The agreement gave him: a) an initial salary at the rate of $150,000 per year, "with annual increases of 20% of the prior year's salary or such greater amounts as may be determined by the board of directors" b) A cash amount of $12,500 c) Cumulative options to acquire 250,000 shares at a price of 50 cents per share at the rate of 50,000 shares per year -- with no adjustment in the event of a reverse split. d) "a finder's fee in certain circumstances" e) group medical insurance f) life insurance having an annual premium of $12,000 and g) automobile expenses. There is a lot more interesting stuff in the SEC filings, but it will take a while to sort through it. More later. -- Jim