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

To: Dick Lee who wrote (18936)	5/23/1998 12:42:00 AM
From: Wink	Read Replies (3) \| Respond to of 27968

Dick: Outstanding Shares. I took up your challenge to put some numbers to the outstanding share issue. This is a first cut: Dec 1997: 24M outstanding with a 10M float (best guess based upon posted info) and 14M restricted May 1998: 70M outstanding with a 24M float and 46M restricted. (Note that Mel said that the cc had 28M and 42M respectively!) Difference: 14M Float and 32M restricted. Arif states that (in his fax): "The increase in the shares is due to restricted stock issued to management, stock issued to buy Myriad and the Delaware operation and additional stock issued to collateralize the 12 million-dollar line of credit." 1)The Myriad deal was all cash and a management deal per the April 17 PR. "The final Agreement does not include the issuance of any Firamada shares and will be a cash transaction only. Also per the Agreement, Ted Colo and Steve Fox will continue in a non-principal management capacity with the company under a negotiated 3-year contract." This leaves the shares issued to obtain the $1M IRS payment. If we use $0.33 we have 3M shares issued. (Side Note: Why not use the line of credit if $12M is available? With little debt on the books, why dilute shareholder value? Not a good move for us!) 2) The Delaware operation is a $1M sales organization. If we assume 10% profit and 6 times net earnings for a buyout we get about $600,000. Issuing shares at $0.33 would give us about 2M more shares. (Again why not pay cash? Bad for us again!) 3) Stock issued to collateralize the $12M line of credit. Use $0.50, and get 24M shares max. Assume 10% good faith downpayment in shares for about 3M shares with more as line is used. Smaller acquisitions in NY and CT could have used this line and and doubled this amount to 6M shares. (Reaching here!) 4) Management restricted: 32M more shares?????? (Seems huge!!!) Totals: Add it all up and we have: 3M + 2M + 6M = 11M with 3M unaccounted for. Remember that they may also have used shares for PR and other stuff per some of the postings over the last month. Conclusions: Some of this stuff still looks like a bargain. It seems to me that the floated shares were well spent (to some degree). It is the large number of restricted shares that has ballooned the total outstanding and we don't know for sure who (within FAMH) got these. We do know that Arif has a bunch, and maybe Ira had a "golden parachute" also. All of the above is my opinion and based upon many sources. Do your own DD. Long on FAMH. Wink ;>)

To: Dick Lee who wrote (18936)	5/23/1998 7:51:00 AM
From: TraderGreg	Read Replies (2) \| Respond to of 27968

The two issues regarding the delta between the 48 million and the 70 million are the point you made about the collateral for the $12MM LOC and then there's the collateral put up to cover the $3.5 million owing to the IRS. That would make sense, except not long ago we were talking about the 12MM line of credit being used for the payment to the IRS for Myriad. Those share issuances were to explain the increase in shares TO the 48MM share level. Now, are we now hearing that the LOC is explaining the increase FROM 48 mm TO 70 mm shares? I can accept the LOC of $12MM representing 24MM share+/- issuance. But where did that $12MM go and also what were the other 20MM shares or so used for. Perhaps we need to step back to 1997, look at the share count on 12/31/97 and have management identify the increase in shares from that date to the current. The "average" shares in '97 was 20mm, but how many were out on 12/31/97? 25mm? 30MM? Who knows? So, when the '97 audited financials are finally released, it will give us a start point...but we will still not know what the share issuance in the first five months of '98 has gone to. These issues need to be addressed. TG