A non emotional analysis
posted on
Jul 02, 2008 03:04PM
Just returned after two days and waded through what seemed like a few hundred posts, many with a touch of personal emotion. It appears as though objectivity sometimes gets lost in the analysis and interpretation of any new company communications.
While some have strong feelings about how positive the recent communications were, the market thought otherwise.
The opinion that the fundamental finances of the company have no current bearing is not supported by the investment community based on the last several months share price activity and volume traded.
We may have invested several years ago based on the patent aspect but the heavy weight investors are not currently doing so even knowing that DM is on board in an attack mode.
We may expect a change in their mindset if and when we see a positive settlement or two.
The added funding primarily came from sources that have made major investments in the past, in one case to the tune of approx 25 million shares.
I suggest that any entity already heavily invested would continue to add to their investment since the alternative would be bankruptcy and a complete loss of their investment. This reasoning may apply to RPs additional purchase of shares, why wouldn't he want to protect his investment as well.
Look at the decision personally, if you did not own shares, would you elect to fund the company on the basis of the past and present losses and that the patent lawsuits may be settled in favor of the company. If this were true, why is it that a lot of high volume and improved share price has not occurred?
This does not take away the fact that they, the current investors, along with management, have every reason to believe that this venture will ultimately be a success and reward all who own shares.
The working capital deficit has long been a major thorn in operations capabilities and no doubt discussions regarding funding have been going on for several months as I predicted long ago.
On the positive side, the comments concerning marketing strategies to other market segments because of the crisis in the airline industry are a step in the right direction.
Also we have seen a turnaround in trust since Blakeley came on board as his statements to shareholders have met our expectations, including a monitoring and reduction of expenses.
As I have stated before, if we do not realize new revenue from product sales and no settlements occur in the not to distant future, than new funding will be necessary as the 750k will not cover the need for working capital.
Depending on how long we continue a working capital deficit, we may see a requirement from the company to ask for new authorized shares, either at the upcoming shareholders meeting or separately, what amount is uncertain.
Finally a date for the meeting, Sept. 17, where hopefully we will be provided with new information as to the progress on the patent lawsuits and perhaps an agreement regarding the infamous Wencor issue. An operational business update would satisfy many ongoing questions concerning internal product and engineering progress.
My opinion, others may disagree