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Microcap & Penny Stocks : STRATEGIC SOLUT (Nasdaq:SSGI) -- Ignore unavailable to you. Want to Upgrade?

To: charles messick who wrote (164)	8/28/1998 11:24:00 AM
From: ComSolut	Respond to of 388

Charles: Discussion What did we learn yesterday - POSITIVE 1) TAMSCO is the merger candidate. A high-tech IT company. Combined the two companies project annual revenues of 40 million. Supposedly Tamsco has been profitable for the last 5-6 years. Customer base is complementary for both companies NEGATIVE 1) The merger is still non-binding. "discretionary termination by either party" 2) Expected closing October 30. Time enough for the merger to unravel. Remember - IMHO - if no merger SSGI is worth ZERO - that is a lot of RISK. 3) 8.5 million in EQUITY CAPITAL must be raised. (I return to this issue in my next post). UNCERTAIN: 1) Growth from a new technical innovation in the Aquaculture Industry developed by Tamsco.. UNKNOWNS: 1) Number of shares outstanding at completion of the merger. 2) Expected earnings per share for the first year. 3) Amount of Tamsco profits for the last 5-6 years. 4) Projected growth rate of revenues and profits. Hopefully this will start the discussion off. Next post will deal with the needed equity capital and shares issued. ComSolut

To: charles messick who wrote (164)	8/28/1998 11:44:00 AM
From: ComSolut	Read Replies (2) \| Respond to of 388

Charles, Equity Capital From the press release: "Under the terms of the agreement, TAMSCO"S shareholders will receive other consideration and will own 66% of combined entity on a fully diluted basis with 34% balance owned by current SSGI's equity holders and the investor(s) providing, the required equity capital." Hypothetically: Assume a final number of shares outstanding (whether in float or not) of 10 million. Tamsco = 6,600,000 Previously outstanding = 2,250,000 Remaining balance = 1,150,000 Somehow Tamsco and SSGI have to raise 8.5 million with only 1 million in stock remaining or roughly $ 8 1/2 / share - a rather large premium. Maybe they will use warrants or options? Either way - a company with projected revenues of 40 million must raise 20% of those revenues in equity. Coming back to shares outstanding. If 10 million and say the combined companies make 1 million net profit, that is only 10 CENTS per share. Even with a PE of 20 that is a $ 2.00 / share price fully valued - and no one is going to fully value the stock until the unknowns in the previous post are revealed and the merger is completed. I am not being negative - just trying to be realistic and recognize what we do not know and what the major factors will be in determining a fair price for the stock. Right now I plan to wait - KNOWING THE RISK - becasue if the equity is raised, and the merger is completed, and the company projects some profit for the first year, I believe there is the possibility for a 300% return ($.5 to $2.00). AND finally Malcolm says the stock will be a WINNER. Please feel free to comment on the above - they are my thoughts and everyone sees things differently. ComSolut