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

To: David Colvin who wrote (20122)	5/31/1998 6:37:00 PM
From: Little Engine	Read Replies (4) \| Respond to of 27968

No earnings? Possible. Since they haven't released any earnings statements, it's hard to figure. No assets? Well, they must have some assets. But not many. Their main assets would be a) whatever cash has been generated by selling tons of stock; and b) accounts receivable. But what if debts are twice assets at this point? Then the amount of assets hardly matters. See BOST to find out what a heavy debt load can do to a company, not matter how fast revenues are increasing. IRS could have let them purchase Myriad as long as they were sure they would get paid. This is a different question than whether FAMH is in strong financial shape. Personally, I think the Myriad deal went down like this: 1) FAMH issues lots of stock to Myriad, tied into the "credit line," as they called it, though it sounds more like an equity investment. I am unsure on how much Bristol would make off the stock, and how much off the interest on the loan. 2) Bristol coughs up $4.5 million for the Myriad deal. 3) Ira gives the IRS $1 million, while FAMH sets up an escrow account with the other $3.5 million, to assure the IRS that the debt will be paid. No need, then, for Firamada to open its books to the IRS. As if the IRS would have much interest in unaudited figures, anyway. So: the IRS gets an assurance it will be paid, Myriad has leverage (in stock) so that the loan gets paid back, and Ira Monas gets to claim that "no stock was issued to acquire Myriad -- it's an 'all cash' deal". Fairly clever. I'm trying to say, David, that FAMH is an overhyped stock, trying to stay afloat until they make a decent profit, and enjoying the opprtunity to gather cash via issuing millions of shares in stock. In other words, your average BB company.