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Microcap & Penny Stocks : NVEI (Was NVXE) - New Visual Entertainment Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Michael A. Johnson who wrote (449)	4/2/1998 6:51:00 PM
From: Len Giammetta	Read Replies (1) \| Respond to of 2211

Thanks for the additional information. If I understand this correctly, NVXE and Star will be completing a merger sometime this year. Stars average gross revenues are approx 650000/yr through 1997. In January 98 Stars gross receipts are approx 600000 (guesstimate). NVXE is on the other hand broke, generating no revenues, and struggling to raise working capital to survive. Star has revenues and some broadcasting expertise. A meeting of the minds has determined that as a result of the merger, the whole will be greater than its parts. If annualized, revenues for Star can be estimated at 7200000 with a gross profit of 3600000. (Guesstimated and presumptuous). Star is eager to merge with NVXE for 750000 (2000000 shares @ .125/share plus 500000 cash). Assuming combined after tax net income of 10%(simply an estimate), the Newco will net approx 360000 to be spread over 31500000 shares (Common Stock, $.001 Par Value, 100,000,000 Shares Authorized, 17,111,273 & 12,425,227 Shares Issued and outstanding... plus the 2000000 shares to Star) resulting in EPS of approx .011. Assuming a P/E of 20-30 we're left with stock worth .22-.33. Although this deal doesn't appear to be anything to write home about, the results of this calculation are full of guesstimates and doesn't account for additional revenues generated by NVXE itself. Also, due to the verbiage used (pre-tax gross margin) it's uncertain whether this represents sales less cost of sale(gross margin) or net income before interest and taxes (EBIT). If in fact the figure represents EBIT, EPS would be estimated at .114, resulting in a share price of 2.30-3.40 assuming P/E's of 20-30, and not accounting for income taxes. Obviously additional financial information is a necessity before the full impact of this merger can be determined. Opinions, thoughts and criticisms welcome. Best of luck to all NVXER'S