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Microcap & Penny Stocks : SFDA....Stratford

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To: MCorbley who wrote (59)4/30/1997 11:53:00 AM
From: David Wideman   of 75
 
Michael,

Some answers, to the best of my knowledge:

<<Does year 1 refer to a time beginning about 60 days from now as
mentioned earlier in this thread when the plant begins functioning?>>
Year 1 = fiscal year from June97 - May98.

<<Does this also mean that the company is currently not producing any Novacrete?>>
Correct. Plant should be completed by early June, with production to begin
shortly thereafter.
Evidently, prior management had the technology but resorted to hyping vs.
actually manufacturing/selling. Opening of manufacturing facility represents
fresh start.
On one hand, it's easy to say that this fresh start is from "Ground Zero".
However, we do have a few inherent advantages, including what sounds like superior
technology & A-1 management. Although previous announcements - $200K revenue from a
licensing agreement, $900K licensing agreement w/Phillipine co., $4M profit from
joint venture in Greece - are not valid (per Greg @ ICC - "Throw all of the old
press releases in the trash can"), I would think that these acqaintances are still
in place. With new management & pre-existing product awareness, thoughts/hopes
are that we'll be able to "hit the ground running".

<<Are they still planning to generate additional revenue by
licensing the "recipe" to other companies?>>
Although the marketing plan will probably change under new management,
it would seem that the company would continue to utilize some sort of
licensing agreement. IMHO, revenue projections contain all revenue sources,
whether product sales or licenses.

More FUN WITH #'s (from a conservative? standpoint):
From Year 1 projections on report posted on yesterday's report -
Revenues: $16M Assume $10M
Net margin: 25% Assume 10%
EPS (8.6M shares): $.465 $.116
With a EPS of $.116 and a PE of 20, stock price = $2.32 (a 4+ bagger in
one year).

Note: If company shows that it has anywhere near the potential to increase
revenue to $250M by year 5 (as stated in report), market should value stock
at significantly greater than PE of 20 (maybe 40, 50, 60?)

Hoping the best is yet to come,
David
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