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Microcap & Penny Stocks : TPII - Year 2000 (Y2K); Groupware; Client Server Migration -- Ignore unavailable to you. Want to Upgrade?

To: Neil who wrote (9340)	11/17/1998 12:43:00 AM
From: Jeffrey S. Mitchell	Respond to of 10903

Re: Consulting Costs: According to the 10K: For Fiscal 1998 and the 1997 Fiscal Period, cost of consulting services accounted for $1,314,356 and $11,271, respectively. The cumulative cost of consulting services for the Development Period accounted for $1,325,627, or 19% of total expenses. The Company anticipates managed growth in this area as people are added to satisfy consulting services provided to our customers. As the employment market has become more competitive as the result of channeling human resources toward the Year 2000 problem, the Company has ad to pay a premium for skilled consultants and engineers. These consulting services have been allocated to projects in which the Company has signed contracts.... ...The Company relates the variable cost of consulting services, transformation services and software developments to revenues. The Company believes that, as a percentage of revenues, these costs will vary due to the nature of the project and the specific services required to satisfy customer requirements. The Company anticipates that revenues based on a mature service offering (e.g. client/server migration services) will yield a higher profit margin, while Year 2000 remediation and groupware development projects may require a higher degree of manpower and travel costs. Transformation services and Year 2000 remediation services are based on the number of LOC to be processed or repaired, while consulting and application software development services are provided on time and materials basis to assure profitability. ===== Of course I have to mention that the SEC has recently tried to clamp down on "consulting" related expenses. Seems some companies were paying off "friends" and hiding it under consulting. Doesn't it strike you as a bit odd that a company can spend 50% more in consulting than it takes in in revenue? After all, you don't pay consultants unless you have work for them, right? And you don't charge less than you pay them, right? Hmmm.... - Jeff