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Microcap & Penny Stocks : DCH Technologies (DCH) -- Ignore unavailable to you. Want to Upgrade?

To: Alan Brezin who wrote (588)	2/17/1999 4:58:00 AM
From: Laurens	Read Replies (1) \| Respond to of 2513

For Sid: Great analyses - I am following the meaningful discussions on this thread with awe...... Would expect such time consuming attention for stocks that are really worth something, like Merck or big bue. Never mind - I am following this thread like a prime suspense movie....

To: Alan Brezin who wrote (588)	2/17/1999 10:47:00 AM
From: Sid Turtlman	Read Replies (1) \| Respond to of 2513

Alan: You are correct. A venture capitalist may well wish to finance this company. The ones I know that have money, though, didn't get that way by being generous in what they are willing to pay. My scenario of the company being forced to sell many millions of shares at pennies per share is really the venture capital scenario. The "strategic partner" scenario is the one where the financing party might be willing to pay higher prices. The SG&A expenses that you mentioned are all in what DCHT calls "expenses", I presume. Actually, I was being very generous to DCHT in my analysis. I was assuming, lacking any evidence to the contrary, that the excess of assets over liabilities that it claims to have had in December was all in cash. If you have ever taken a look at a balance sheet, you will notice that liabilities tend to be things that require writing a check, like accounts payable, notes payable, etc. Assets, on the other hand, involve many things that are often not easy to convert into cash. That would include things like inventory, plant and equipment, capitalized R&D, etc. So the differential between a company's assets and liabilities typically is much greater than its actual cash available to pay bills. That means that DCHT probably has even less cash available than I gave them credit for. Unless the numbers DCHT has on its website understate its true financial wherewithal (not likely, but they are unaudited) the only conclusion that one can draw is that it must raise a lot of financing in a hurry, and drastically cut expenses, or it will go under. If anyone can interpret the numbers differently, I would be interested in seeing that analysis and, hopefully, change mine to a more optimistic one.