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[QUOTE]Originally posted by chrispete: [QB] I was going through the 9/30/03-10Q for Bentley and it's an interesting critter. Just wanted to send my observations to the board - I was switching between windows and typing in train of thought when I wrote this, so I'll put it in a list format as I go through the 10Q: (1) The company is listing an increase in accumulated depriciation, suggesting an aging plant. (Not a real problem at their current size.) (2) The company saw a dramatics drop in operating expenses (about 66%) from same Q last year (very good thing in a tech business, means they are probably outsourcing many things.) (Hosting outsourcing has been confirmed by a bit of checking.) (3) Creditors are taking common stock in lieu of payment, meaning that they attribute value to the stock - a very good sign that management has been able to produce. (Another look at this one made me think that there were debt instruments that had a timeframe for automatic conversion to common stock, I'm digging a bit to verify which situation is the most likely. If it was an automatic conversion, it could or could not be a good thing, toss of the coin.) (4) The company has issued no preferred shares - a good sign that they are not stealing value (percieved or otherwise) from common stock. (5) The Crump deal is set up very interestingly - the license purchase was made by common stock, and the royalty agreement provides for $166,660 per quarter barter based income before being renegotiated at $1mil annual income. (6) Management was thinking ahead with the decision to kill the FNIN deal, the new national "Do-Not-Call Registry" would have severely impacted that company. (7) The company is broke but has some deep pockets that are "angeling" for it, dumping in capital. (A good thing, someone really believes in this company at a level that the board can say, "We need money." and the investor(s) close to the situation say, "Yes." (8) Confirmation of the company outsourcing (thus reducing expenses) can be seen in the "Risks and Uncertainties" section in which they state that a wildcard factor is, "the level and use of the Internet." This means that they almost certainly are using a colocated server. (This has now been confirmed) (9) The last part of the "Risks & Uncertainties" section puts them in a class with most other "dot.com's" in regard to future success. A potential bad spot, but survivable. (10) Ouch, point 5 of the synopsis of "R & U" states that management may not have time to manage the company properly. A serious potential problem. (11) Lawsuit - hrm, sounds like garbage - been there, done that. (12) One creditor took these shares at a par value of $0.10 per share in exchange for a debt. With markup in a service-based business, that'd be a realized value of between $.02 and .05 per share. (13) A range was established of between $0.02 and $.10 per share for creditor payoff/investor conversion. In the final analysis, I'd say that this is a typical company that has fought like hell to stay alive despite markets collapsing on them, leveraging investors (private and public) to stay alive. There is no evidence of significant bank loans bearing interest or any significant debts owed. With the conversion that under my assumption included moving from a (content/Internet/application) service provider class to a company utilizing the resources and thus flexibility of others in this arena via subcontracting they have significantly decreased their operating expenses (while I personally feel are still a bit excessive for monthly operating, suggesting an amount of hidden debt or excessive personal withdrawls) and set themselves up in a "pay per use" situation for many of their technological resources. I think that this will give this company a great place to start from, but will not sustain them forever. I think that they will indeed have to eventually start up their own service plant again (at great expense) but with the full service capabilities of current "colo" providers this should be a path taken far after they have gained a financial situation that will cover such expenses. Clicking out of analysis mode, I think these guys have a great idea. Barter was the first form of trade and was the basis for currency as we now know it. I think that as currency becomes more electronic, barter will mesh back into the system. [/QB][/QUOTE]
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