Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : THNS - Technest Holdings (Prev. FNTN) -- Ignore unavailable to you. Want to Upgrade?

To: Kevin McKenzie who wrote (5022)	9/2/1998 11:32:00 AM
From: The Philosopher	Read Replies (2) \| Respond to of 15313

(1) What information specifically would you need to create a pro-forma income statement? Everything? <g> I assume they have a business plan. They probably keep the full plan pretty tightly locked up, but they should be willing to share portions of it with their shareholders. And they may have floated the plan around enough that it is public enough to be shared. Shareholders should also be allowed to see materials provided to venture capitalists if they've raised venture capital money? Some of these questions would be answered if they released current audited financial statements, but I haven't seen any. A few specific questions: Exactly what products and services are they intending to offer? Not simply in general terms (itranet is a broad term!) but in specifics. If a big potential customer walks in the door, what products and services are they offering them now and two years out? Who are their projected customers? What kinds of customers are they marketing to? (copies of their marketing materials and a list of the ads they have placed and where they have placed them, the trade shows they have gone to and the number of people and size of booth they've had there, those should be public record, and disclosed to shareholders?) What is their pricing structure? (e.g. could be $X per corporate or institutional account, $X per individual user (like Silicon Investor), $X per hour of usage (like AOL), some combination of those, or something totally different. they may consider much of this proprietary, but if they're talking with customers they have to be giving out pricing data of some kind. Most valuable would be see copies of contracts which have already been signed. What do they have in place now in terms of capacity to serve customers? How many customers / accounts can they handle with their present capital investment? What will it cost in capital investment to add additional capacity to serve how many additional customers? What is their current capital structure? How are they intending to finance their growth? Borrowing? (and if so, what rate over/under prime are they able to borrow at?) Venture capital? New stock issues? How many stock options are they issuing to personnel, and is that likely to change significantly (must have this to produce diluted earnings). What are their fixed costs (rent, personnel, etc) at this point? What will be their incremental costs to service each additional million of income? These are not by any means all the questions, but they are a start. (2) Is it SOP to create three: optimistic, most-likely and pessimistic? If I were being paid to do it, I would, but I usually don't. My practice, has been to produce a most-likely pro forma and then identify critical inflectors and identify their impact on the bottom line. For example: if you get a pro forma that shows $.17 projected earnings per share, you might say "if employee costs go up 10%, you will knock $.005 off the earnings. If major customer A goes elsewhere you will knock $.06 off the earnings, if sales increase by 15% since costs are basically fixed most of that will go through to the bottom line giving an additional $.03 per share" etc. That's been my practice in the past. (3) Is it too soon to get realistic numbers on product pricing and likely customers? It had better not be! <g> If they don't have a pretty good idea already who they expect to sell for and what they expect they can get for their products and services, what on earth are they doing in business? Numbers always change, of course, but if they don't have a pretty solid set of projections in hand now, why not? I believe strongly in the maxim "those who fail to plan plan to fail." or "If you don't know where you're going, how do you know what road to take to get there?" I hope they already have much more sophisticated pro formas than I could ever produce, but they probably won't share them a) because of proprietary nature and b) because of issues of forward-looking statements. But maybe they will! You never know until you ask. I can tell you this, if they told me that they don't have a business plan or pro forma projections for the near term future (preferably 1, 2, and 5 years out) I would be off this thread so fast your head would spin! Post something specific before Barbara goes to FNTN on Thursday and she may be able to run it by MS, MM etc. (Yes, I know we should never ask insiders any questions about their own company, but at least it would give us a start on product pricing and likely customers.) We should be able to estimate costs to maintain hardware/software and support costs. Barbara - is this enough for you to start with?