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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today -- Ignore unavailable to you. Want to Upgrade?

To: Lee Bush who wrote (5084)	4/20/1998 11:55:00 AM
From: De Peepster	Respond to of 19331

From my Fav Cabana boy: I finally had a chance to speak with Mr. Murphy just a few minutes ago. To say things are hectic would be an extreme understatement. The entire management team are literally putting in 16 hour work days. Mr. Murphy is co-ordinating 4 sets of law teams presently. Some are working on due diligence in order to close on all the LOI's while others are pursuing legal matters against individual/individuals. He would not discuss any details concerning the latter. Houlihan & Co. are also co-ordinating more possible M & A's. He wanted to make it perfectly clear to everyone that he will not be posting on any public board such as SI anymore for the simple reason that his lawyers advised him not to do so given the fact that DCI is so close to going to the next plateau and that he, in no way, wants to jeopardize any forthcoming deals that are on the table. We also have to remember that auditors are running around trying to ready the Annual Report which in itself is very time consuming. We have also received renewed interest from 3 more Tier 1 Investment Banking firms which Joe will be meeting with shortly. Joe is still very upbeat and positive concerning our future and feels that they are right on track to do what he has promised us in regards to adding valuation to our company before entertaining offers from various entities. He is very aware that everyone is concerned about the current market price of the stock and he does not like it any better than us. However, he reminded me that short-term price is not a big concern for him. Then again, he knows a lot more than you or I in regards to what lies ahead. I also wanted to take this time to apologize to the many people that I have not been personally been able to get back to in the last several days. I fielded well over 300 phone calls last week and to be honest with you, I was exhausted. I will tell you this. I personally have known most of the long-term shareholders in this company. I think it is safe to say that they know the company as well as any of us and they all have one thing in common to a large degree. Practically all of them, including myself, are adding shares at this level. Most of us that have talked to Mr. Murphy on a regular basis will not have access to him as frequently because of the enormous amount of activity that is going on at this time. I hope you can understand this. I will continue to try my best to get updates. "Grupo Brad" {{{{{{{{[SMOOCH honey, ya are de Scoopo}}}}}}}}

To: Lee Bush who wrote (5084)	4/20/1998 12:58:00 PM
From: James Harold Alton	Read Replies (3) \| Respond to of 19331

Lee, I do not know when all of the locked up shares can be legally released, but know that there will be a small number released in June, some in Nov. and that some of the CC shares are restricted out for about 2 years. The obvious intent by the company was to prevent just what we are seeing right now, the bulk selling of those shares within a short time frame which is the reason that we have the low share price we do now. New investors are coming into DCI at the rate of about 250/month, based on the annual increase we have seen, but this influx of buying is not offsetting the selling we are seeing at present. Long term, this is a moot point, since even if the CC shareholders end up selling every last share they have coming, there is a limited number of shares to be sold and so long as DCI as a company remains attractive, the buying will eventually catch up. I have been doing some work on the chronology of the CC shares being sold and while there are several areas I have had to speculate on due to incomplete info, I will share what I have at present. If anyone has additional information to add to this or feels a correction is needed let me know: The CC deal June 17, 1997: All shares of CC were exchanged for: 1. A max. of 494,287 common shares of DCTC 2. 7,002,406 options to purchase DCTC at .20/share 3. 741,432 warrants to purchace DCTC at $4.00/share A. Speculation: It appears that the original (#1 in the list) free trading shares issued to CC were sold shortly after issuance, resulting in the drop in DCTC shortly after the CC deal was closed. B. Fact: On Nov. of 1997, the minority holders of CC began recieving and immediately selling their shares. This accounted for about 1 million shares sold. C. Speculation: The majority shareholders recieved and began selling their unrestricted shares not long after and I estimate that there were about 1.5 million shares involved. D. Fact: By the end of March, first of April ALL unrestricted shares thru these dates had been issued to CC. E. Speculation, ALL free trading shares issued to CC have been sold. F. Fact: 700,000 restricted CC shares have been sold via shorting against the box. G. Speculation: The massive buying we saw early last week, probably accounts for at least 400K shares that had to come from somewhere. This could be a large MM short position but I am rather betting that the MM's have been feed CC restricted shares to sell somehow. H. Fact: None of the $4 warrants have been exercised and aren't a problem for us until we get back over $4. I. Partial fact: We have been told that our problem with the CC shareholders is just with a "few bad apples" and that only a few holders are selling their restricted shares. Based on this and having no real numbers to use, I will assume that we can count on just 2 million of the CC restricted shares being held until the restrictions come off. If anyone has a better number, let me know. So here is the breakdown based on fact and my speculations: Total CC shares, less the $4 warrants: 7.5 million CC shares already sold: Initial shares: 500K (approx) Minority shareholders: 1 million (approx) Majority shareholders: 1.5 million (guess) Known short against restricted shares: 700,000 Supposed addl. restricted shares based on my guess: 400,00 Total CC shares sold:....................3.6 million CC restricted shares being held:.........2.0 million Total accounted for CC shares:............5.6 million Unaccounted for CC shares:................1.9 million If we can assume that at least 2 million CC shares will be held per the restriction per my example above, then the worst case scenario I see is that we will have to absorb 1.9 million more shares. At the current bid, this works out to about 2.6 million $ of buying required to consume those shares. Over the last year, the shareholder base has grown from 1500 to over 4000. If we could assume that each new shareholder brought $5,000 (pick your own number if you don't like mine..it's just a guess) to invest in DCI, then this works out to about 1.3 million/month in new buying, which would mean given this worst case scenario it could take 2 months for the expanding shareholder base to absorb the remaining CC shares. One way I have been looking at this, is back in Novemeber, with about 5 million CC shares to be sold per my example, we had a 20 million $ "problem" with the share price at $4. With the share price now 1 3/8 and being down to about 1.9 million shares to sell per my example, that "problem" has dropped to only 2.6 million. If our share price drops further, then it will take even less time for those shares to be absorbed since the same number of investment $$ coming to the table buys more shares. While partially based on specualtion this example I have presented is the basis for why I believe that we are getting close to finally having the selling related to CC finally behind us for good. I see a few possible scenarios emerging: 1. Worst case, we end up having to absorb all 1.9 million shares via the expanding shareholder base: 2 months 2. We absorb some portion of the 1.9 million shares and DCI steps in with the buyback to consume the rest: less than 2 months (one thing to keep in mind is that there would be more than enough $$ left in the BB to consume all 1.9 million shares) 3. A legal method is found to prevent the sale of any additional restricted DCI shares: immediate 4. A legal method is found to prevent the sale of any restricted DCI shares and the shares that have been shorted are forced to cover: Selling stops, heavy buying to cover results in a strong rally. 5. Some combination of the above scenarios. The question I would like to find an answer to is whether in Canada you can use restricted shares to legally cover an outstanding short position in ones account? Does anyone know the answer to this? James