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 : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: Bald Eagle who wrote (12940)	12/19/1998 5:18:00 PM
From: Mags	Respond to of 44908

Why do you want TSIG to pay off all of its debt so bad? Doing so will reduce TSIG's risk, but will also reduce return because of less leverage. Also, the good thing about debt is that it is tax deductible so that the government subsidizes a portion of TSIG's interest costs. There has been a ton of debate about the appropriate capital structure (debt/equity mix) that maximizes the value of the firm. The best case is that the use of debt is good in terms of the tax benefit, the worst case is that personal taxes wash that tax advantage out. In short, the biggest thing for TSIG to worry about and invest in is expanding their business, improving their website, and signing more deals. Paying off debt should be the least of their worries because doing so really won't amount to a hill of beans.

To: Bald Eagle who wrote (12940)	12/20/1998 1:07:00 PM
From: David A. Irvine	Read Replies (3) \| Respond to of 44908

TO ALL, PLEASE READ AND HELP/COMMENT!!! I have been reading posts on this thread about TSIG being over $30 million in debt for a while now, but I have never said anything because I am not an accountant. But, I cannot sit tight here any longer. I may be totally off base here, but I don't believe TSIG is $30 million in debt. I believe TSIG has an accumulated deficit of over $30 million. Big difference. Debt is money that needs to be paid back. TSIG doesn't have $30 million to pay back. Why does everyone keep saying they do? (Again, I am not an accountant, hence the "please read and help" statement. Correct me if I am wrong, please.) An accumulated deficit is NOT money that TSIG owes, it is a result of operating loses, most of which were paid for by issuing common stock. For example, from the most recent annual report (April 15, 1998) (http://www2.edgar-online.com/brand/yahoo/gdoc/?doc=A-0001035704-98-000261&nad=0): **** To all new or potential investors in TSIG: It is important to note that the information in the most recent annual report was the result of the old management team. The current company has new management, new products, and a new marketing plan. In fact, the net loss for the most recent quarter has decreased from $2.8 million last year to only $800,000 this year. Quite an improvement. Anyway, back to the annual report: "As of December 31, 1997, the Registrant had a negative stockholder's equity of $5,193,925, an accumulated deficit of $26,066,383, and a working capital deficit of $5,597,256." The net loss for fiscal 1997 was $18 million. This was mainly paid for by the issuance of common stock. Specifically, in fiscal 1997 8,096,091 shares of common stock were sold by the company to finance the operating loss, generating approximately $13 million in proceeds. [Sidebar: A few days ago someone asked how we can be sure that the company will stop issuing stock. The answer, beside that there is new management, is that the company no longer has $18 million operating loses that need to be financed!) Back to my point: The company is NOT $30 million in debt! The company has a $30 million accumulated deficit. What does that mean? Well, it means the first $30 million the company makes will not be taxed! That is a huge advantage. What is the highest corporate income tax rate these days? 40% or so? That means the company will save $12 million in taxes in the coming years, thanks to the horrible job of previous management Take care, we have a gem in TSIG. -Dave