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I believe the law says they must make the filing, but if they did have other choices they might have been wise. What concerns me is not hearing about other aspects of the deal. The REGDEX may have been premature if the partnership isn't being completed, if it is, I'll be happy to hear about it.
Gary
Orangeman, I think the answer's simple, and it's been said, whoever it was that wanted stock structured the deal to get him the stock at the current price. If you simply gave him $150K and said, go buy stock, a buy of that size would drive up the price, and he'd get far less stock. Furthermore, if you announced the deal before funding him or providing the stock, the news of the deal would drive the stock up even further.
I've seen other deals that offered other company's stock, typically they can opt for the stock at the time of their choosing before a certain date, the stock is typically priced at the average closing price over the previous 3 to 5 days.
I like the fact that a partner or seller wants shares, it's a statement that they like what they see in the company and believe the stock will eventually be worth far more then the current cash equivalent in time.
Gary
Penny, while I think you're right about the millions, the thing I'm having trouble with is earnings. If the company is truly making substantial money and growing every year, why is it necessary to acquire more funds by issueing stock at the extremely low prices it's bringing.
I realize they've added substantial equipment, that takes money, but what's needed is showing what we're earning. If CTKH is earning money, even if they're turning around and spending it on equipment to increase capacity, if the earnings are displayed, the stock will be worth substantially more, and substantially fewer shares can be issued to acquire additional funds as needed.
Gary
Geoly,
I agree with you, we all sometimes believe we heard something that wasn't said, likewise at times we say something that we deny saying, that doesn't make us liars, just humans.
I know of many cases where CEO's said something unofficially that created problems, was denied, and later was proven true, but I've also seen it go the other way.
CTKH has many unknowns, partly because it isn't a reporting company, but also partly because it appears to have several irons in the fire, it won't necessarily complete every partnership or acquisition, but I suspect that eventually one or more will come to fruition.
Gary
Thanks King George, I've heard that Fayiz keeps some tremendous hours so it doesn't surprize me that he's there on the weekend. What I don't know is whether someone is there checking that everything's running properly at all times.
I know we've all left the house with the oven on, I just don't know if you'd do it with 12 of the type of ovens that CTKH has.
Gary
Orangeman, I'm frankly not concerned. What concerns me is the ovens are fully utilized, and I gather they are. As I said, I would think they'd have the facility manned while the ovens operate, but I'm not certain of that.
To me operating two or three shifts doesn't matter, it's product that matters. If the ovens are fully utilized they're getting as much product as it's possible to produce.
In spite of doubling their capacity it appears that CTKH will shortly need more, and I believe they're working on that. Yesterday I linked an article that mentioned Samsung found the market for LCD Displays to be down, however, if CNT's are as good as they say, and if the price of producing them is lower than the LCD's or Plasma's, I think the demand will be far greater then for the current technology. I expect that by the year 2010 CRT's will be hard to find.
Gary
Orangeman, we know the ovens operate around the clock, seven days a week. I would think that someone's there all the time, but honestly I'm not certain that's true. If it is the case, it may be what JS was referring to when he indicated multiple shifts.
As I gather it, the process has been refined to the point that the unloading and loading of the ovens routinely occurs during the day shift. I'm not certain if schedules are such that ovens don't require action over the weekend.
I certainly don't know much about all the different media's they're producing. I would think that different media would require operating times, temperaturs, etc. What's exciting is in spite of the differences, CTKH can time the critical event so they can be done during the day shifts.
Gary
Orangeman,
I've not seen the actual document and I'm no expert on SEC regulations, but if I were looking to negotiate an acquisition that partially used securities to fund it, I believe I'd rather give warrants giving the right to say a half million dollars worth of stock at the closing price a year from now rather then $150K worth of stock at current prices. That would send a strong message that I expect the stock to more than triple in a year. Of course I very much doubt that Fayiz could say that he gave warrants vs. shares, but I think we'd be able to get the picture.
By the way, here's a link to where Fayiz might want to polish up his CEO training.
Enjoy,
http://www.borowitzreport.com/archive_rpt.asp?rec=1081&srch=
Gary
Here's an interesting article on LCD demand.
http://story.news.yahoo.com/news?tmpl=story&cid=581&e=1&u=/nm/20050307/tc_nm/tech_korea_...
I really wonder if people aren't waiting until they can get higher quality flat panel displays for less. From what I've seen the LCD's don't offer the brightness or clarity from almost any angle that plasma does, but they last a lot longer than plasma without degrading substantially.
As I understand it, the CNT based displays will both be clearer, last longer, and use less energy than either of the other technologies. I just hope it's not to long before CTKH is acknowledged as a leader in the development of CNT based displays.
Gary
King George, I'll agree with you. I think Round was given information confidentially that he was told would be made public. Unfortunately, I believe the situation at CTKH changed, the information wasn't made public, and eventually, partially out of frustration Round revealed more of what he knew.
What we don't know is whether the situation a CTKH has changed so much that what Round knew is no longer true, or if they're still working on what they were when he visited them.
I've been involved with other companies who've successfully executed partnerships that took years to complete. Investors tend to think these things take weeks or a few months to consummate, but some times they take years.
I believe that both Fayiz and Round have been truthful about what they thought they had said, however sometimes what's said and what we hear are two different things. No one is lying when he expresses his belief as to what was said, but if you had a recording to listen to you might find that neither represented exactly what was said properly.
Gary
Chucker, you're welcome to forward my thoughts to Fayiz, however, I've got to believe they're well informed and have a plan of action. As I understand it, the Attorney that attended the Annual Meeting has an excellent reputation in the field of corporate law, I'm sure he would have discussed the potential of doing an IPO on DisplayTek as well as other possibilities with Fayiz.
I believe Fayiz is actually biding time until he has further news on acquisitions and the books have been audited. I believe that much can be expected from CTKH over the next year but it will only happen when Fayiz and his staff are ready.
Gary
Orangeman, look at where DisplayTek might be if Fayiz established the company with say 50 million authorized shares and current CTKH shareholders received one share for every 200 shares. That would put something over 20 million shares in existing shareholders hands and give Fayiz a great deal of fundraising flexibility with nearly 30 million shares available to him.
I would hope that if the DisplayTek rollout was properly done, the company could bring $2 or more a share, equating to one cents a share in CTKH. If it did, Fayiz could potentially bring in over $50 million by doing an IPO. The key IMHO is bringing the stock public with a major brokerage responsible for the IPO. It's possible that a major brokerage could create enough interest in the new issue to generate much higher prices, and therefore more than $50 million. However, if I were Fayiz, I'd keep some of my powder dry and only authorize perhaps 10 million of the new shares in an IPO, the lower outstanding shares could also generate a higher offering price.
It's just my honest opinion but it's very possible that the shares in DisplayTek, even with only one for two hundred, may be worth more then the shares in CTKH, the parent company.
Gary
Orangeman, as I understand the process it takes days in the ovens to yield the media. The timing may be such that all ovens can be turned over during the normal day shift so additional shifts aren't required. In that the ovens are working 24 hours a day production may be at its maximum even with one shift, however, I'd be surprised if nobody is present while the ovens cook.
My point is that additional shifts are of no benefit if the ovens use is already maximized. We don't know that for a fact, but in the past that's what's been indicated. If the cooking time is essentially three days and the start times are staggered, four ovens a day would have to be emptied and refilled in order to keep production maximized.
Gary
Geoly, the one reason Fayiz would need to open the books would be if the purchase involved stock or warrants in the company. In that the attorney apparently filed the REGDEX, it sounds like some stock was part of what Fayiz was proposing to pay. Whether it was Valley Design or someone else they're talking to, if I were the one being acquired and was taking a substantial part of my equity in stock, I'd insist on seeing, or even auditing, the books.
Gary
Jerry,
I doubt if we'll get to Signal Hill.
We're very close to Manchester and Lincoln, if you're going to be nearby let me know. You can reach me at skitahoe@yahoo.com.
We have a place in Incline Village just above the parking lot at Diamond Peak/Ski Incline. I wish I were there but doubt if we'll make it there for a month or two.
Gary
Jerryrth,
If you can get on Scottrade's streamer I believe you get real time quotes on the pinks. I'm not certain whether you must have a Scottrade account.
By the way, we're neighbors, I'm in Westchester.
Gary
Garden Rose and Geoly, I believe both of you have the right idea about how a R/S can be done to the benefit of shareholders.
R/S's are disasters when companies trading for pennies or less decide to get to a dollar or more with splits like 100 to 1 R/S's with the thought they'll have credibility by getting back to a dollar. I've seen several where they were back to pennies in a matter of weeks.
If Fayiz is able to build the share price to 25 to 50 cents investors should support a decision to move to a more prestigeous exchange through a resonable R/S, I like 10 to 1 or less. I believe if an R/S brought the stock to $2 or more it would take little time to build it to over $5. True, we'd only have one tenth the number of shares, but who of us wouldn't be thrilled with 50 cents today.
The good news is if the stock gets on the Nasdaq by reaching $5 it won't stay there very long. $10 and beyond could be just around the corner if Fayiz continues growing CTKH at anywhere close to the way it seems to be growing now.
Gary
There were a number of people last week who said we could expect 2 PR's this week. The one we saw this morning had nothing to do with an SEC filing. Hopefully the next one will clarify what was done, and why.
I'm hoping it involves the Valley Design or other acquisition. From someones comments Fayiz wasn't even aware that it was filed. It was probably something he signed as part of a much bigger picture action, but legally it probably had to be filed before the bigger action could occur.
Tomorrow might be pretty bloody if there's no information about why it was filed however we might be overjoyed when we learn the reasons.
Gary
Jim, that may currently be the case, but in the long run if they can supply the large flat panel displays of the future, I think TV's and computer monitors should be a major part of there business. I would expect that a 4 ft. by 4 ft. media would be worth far more than 16 1 ft by 1 ft media's. I would also think they could make the media in precisely the 16 x 9 widescreen format that's currently used for high definition TV.
I don't doubt that Fayiz has plenty of orders, and you don't want to turn down business, but I hope the future is filled with lots of the larger media that should sell for several hundred, to perhaps thousands of dollars each. On the smaller side, the internals of fuel cells may provide an opportunity that's huge as well.
Gary
It seems to me that if Fayiz is truly buying back shares while making a healthy profit, the less he says about it the more he can buy with a fixed amount of funds.
I find what he's saying encouraging, but as usual, it can't be quantified.
Could someone clarify why the 12 inch media would be so popular. I gather it can be cut up to make smaller devices, but it's to small to be used in most laptops, desktops, etc.
I would think that a somewhat larger size would give far more applications.
It also sounded like the newer material they're working on can be joined to build the really huge displays. That's great, but I would really hope that they're working on ovens that can deliver a one piece media that's 60" or larger.
Gary
There are no rules preventing them from giving numbers, other pink sheets do it. To get off the Pinks they'll have to give audited numbers, I think for three years as well as other information the SEC will need to process the registration. The good news is what they present to the SEC pretty much becomes public.
Gary
I was previously told that the best days for PR were Tuesday, Wednesday and Thursday, I believe the reasons are that brokers and investors sometimes take long weekends and come in late on Monday, if at all. Friday is traditionally when bad news is dumped, generally after the close, it gives people a weekend to think about their actions rather than acting impulsively.
I'd be happy with a PR after the close, especially if Fayiz would like to build some sort of rapore with the MM's. If he issues the PR before the open, the MM's could certainly be caught in a more serious short squeeze, but they have long memories. I like the idea of gradually moving up and continuing to do so.
Gary
Geoly, do you have a feel for whether the PR will be issued before the market opens on Monday, or after the close. I'm not overly concerned, but if it's before the open I may want to roll out of bed early. Here on the West Coast the market day begins at 6:30, I'm usually not up that early.
Would you care to comment on the importance of being on the Nasdaq site, I'm not familiar with where that may take us.
Gary
Penny, nothing would please me more than a really substantial buyback, but I'm talking about billions of shares.
I agree with you, there are many things you can do to raise funds that are better then issuing them on the open market, but that's hindsight. The problem with most of the things you can do is they take time, if Fayiz thought he didn't have the time, I can understand what he's done.
Does anyone know if he placed the shares in his own hands, or those of people he trusts. If he did that, it may almost be like making a loan to the company, for the good of the company they may sell them back at a reasonable profit.
If he's buying back the stock in a private manner he can do so with virtually no effect on the stock price. Of course this isn't at nearly as great a benefit to investors as buybacks often help the price, but in the long run we're better off if he can buy back more shares.
Let's hope the company's making so much money that it's able to use some of it for the buyback, but before that happens, I'd rather see them close the deal with Valley Design.
Several people have indicated that two PR's are expected next week, I think they have it from a good source. Let's hope it moves the price to a substantially higher trading range.
Gary
Penny, the only time I've seen successful R/S's is when the shareholders fully understand the reason and fully support it. I'd say if Fayiz took the actions needed to build the shareprice to somewhere around 50 cents while moving us to the OTC, if he then asked for shareholder support to move on the Nasdaq by doing a one for ten I believe investors would probably support it.
The key to success is first elevating the share price to a level where we can accept the decision to do a reasonable reverse split. If shareholders do accept it, the price will rise before and after the split in anticipation of going on the Nasdaq, or other exchange.
The R/S's that are killers are the one for a hundred types intended to bring the share price up to a few cents, or perhaps even a dollar. I've yet to see one where the price didn't fall practically to where it was before the R/S.
If you want to see a R/S that worked properly, take a look at Able RX. Another that's currently in the process and may have substantial price growth is CEXI, the R/S was almost a year ago but it came with a buyout and registration which is just in the process of concluding. I was out of Able before the split but am currently holding CEXI with a small profit though I know people who need $10 to break even, I hope it makes it.
Gary
I understand that Fayiz has indicated he would never do another R/S, he did one once that didn't go well.
There are credible posters on Yahoo indicating there should be two P.R.'s next week. They don't know the subject matter but I would hope that one will involve Valley Design and the other be a quarterly update.
Gary
IL Padrino,
If CTKH actually wants to move off the Pinks by the end of the year they should file with the SEC by no later than Summer, or sooner. I say this based on experience with another company that took a year to get it done and still haven't move off the Pinks, but are through the SEC.
Certainly it can be done faster, but the SEC practically always has questions that must be answered after an initial submission, no less than four months should be allowed.
Gary
Dickhertz, I doubt that we'll ever know if a particular product has CTKH inside unless it's clear that our product is not only superior, but a major producer essentially contracts with CTKH announcing that all of a certain model will have CTKH media. I very much doubt that this will happen.
As I understand it, the media that we produce needs little, if any machining, unlike our competitors. While I gather that machining does diminish the quality of the media, it's unclear whether you can see it, at least if you're at a proper viewing distance. If it's like a flaw in a fabric that can only be seen with magnification, it might diminish the price the tailor will pay for the fabric, but I doubt if it will diminish the price of the suit.
Manufacturers may be willing to pay slightly more for CTKH media, or they may want more of it, but unless CTKH can supply all the media that they can possibly conceive of using, they won't want to limit their supplier to CTKH. From what I gather, companies like Sony, Toshiba, etc. like to have multiple suppliers of practically every component that goes into their devices that they don't manufacture in house. The media we supply may, or may not go directly to them, but regardless, you can bet they have multiple sources for getting it.
The good news is that as long as our quality remains good and our prices competitive, we can get all the business we can handle. That's a nice position to be in.
Gary
Penny, if Roundmot were off by 50% and profits were 50% of sales, that would be $20 million in earnings, or to put it another way, nearly a half cent in earnings per share. I think a P/E of 20 would be fairly conservative for a penny stock that has earnings and no outstanding debt, that would give a stock price of a dime.
If Round were more accurate, if profit margins were higher, or if the P/E was substantially higher you could probably make a case for up to perhaps fifty cents, but I think that's a stretch, a quarter, however is a real possibility on $80 million in sales.
Of course we'd actually have to see figures, saying we're up 500% over last years figures wouldn't hack it. If Fayiz is serious about getting off the pinks, we'll see the figures before the year's over. If not, we might just be the most profitable sub penny stock in history.
Gary
Dickhertz, have you ever looked inside a TV or computer, if so, I'll bet you were surprised at all the different companies and places that supplied parts for it.
I believe confidentiallity agreements prevent CTKH from saying many of the companies they provide materials to. Equally important, what we provide has no label, it's inside something that may be provided by someone else. You really will never know if you have a computer, TV, cell phone, camera, etc. that has media provided by CTKH, or anyone else for that matter.
DisplayTek could be a different matter. I don't know if DisplayTek will ever fully fabricate a device for sale to the general public, but if what they do provide develops an excellent reputation, manufacturers and distributors will want to say they use DisplayTek flat panels, etc.
I certainly hope that in the future we'll learn at least some of the key corporations we supply, but even that may not tell us where our media are used. I doubt if Sony purchases media for their flat panel displays, they probably buy the entire assembled flat panel from dozens of suppliers, mostly names we'd never recognize. Some of those suppliers probably buy their media from CTKH. I don't know this to be the case, but when I visited Japan some years ago I was told that's how they do business. It was also explained to me why Japanese products were more expensive in Japan then in the US because of the number of hands they passed through.
I don't know the odds of most of us having something made by CTKH in their possession, but I suspect it may not be as high as you'd think.
Gary
Il Padrino,
I have no idea of the cost of a substrate, I'm sure it's substantially lower for a cell phone or camera then for a laptop, and very much higher for a large flat panel TV. I also don't know CTKH's capacity, but I'm sure that it's fairly substantial, especially with the 6 new ovens.
What I am fairly confident of is that 1.6 million substrates is a small number when you compare it to the total number of cell phones, laptops, monitors, flat panel TV's, etc. that you routinely see being sold. We need to remember that CTKH sells internationally, and these products are being sold internationally.
When I think of all the people here in the U.S., I'd be willing to bet that at least one quarter of the population buy one or more devices that contain a substrate a year, that would be about 50 million devices. The U.S. certainly represents a wealthier part of the world, but if the numbers are more like one in ten worldwide, the number is still huge, but look at how it should grow in the next ten years.
I suspect that in ten years you won't see a single CRT any more in the stores. Practically every new car will have both navigation systems and entertainment system. We'll all still be trading our cell phones every few years for the new ones with more whistles and bells. The average home will have at least one large flat panel TV, probably more. Etc. etc. etc. Then if it turns out that most batteries in portable devices are replaced with fuel cells, and fuel cells include some ceramic media, you get some idea of the potential.
Now I certainly don't expect every bit of media to sell for $50, I suspect that in many cases it won't even sell for even one, but the numbers will be so big that the profit potential will be huge.
CTKH doesn't need to get much of this business, just a small percentage could make us all wealthy.
Gary
Penny, I was including all materials used when I put a 10% figure on it. I figured to maintenance costs etc. in figuring the other 10%.
I have no idea how close I could be, but I believe most manufactured products are marked up about double their cost so if I'm correct, I believe I'm in line with normal commercial practices.
I would expect that if CTKH were earning $5 million a year much of it would be reinvested in the business. The demand seems so great that they'll need to be adding ovens each year for the foreseeable future, and I suspect they'll want some of them to be larger than anything they've built to date. Flat screen displays in the 50" to 65" range are becoming very popular, if CTKH can provide media in that size for the next generation of flat displays they should generate substantial revenue.
Gary
Penny, perhaps there's a way to roughly estimate their costs. I doubt if the material used in a product exceeds 10% of what they sell it for. If we figure the average employee costs them $100K a year, that's $2.5 million if they have 25 employees, a number I've heard in the past. That would leave what they pay for the facility, which I understand Fayiz, not the company, owns, as well as utilities, taxes, etc. which might equate to another 10%. This is very rough, but if it holds out, I believe it's saying that something over 50% of the selling price is profit if they're selling somewhere around $10 million a year. The more they sell, the higher the profit, and they're probably break even if they sell $4 million or less.
This is certainly not an accurate estimate, but it seems like a reasonable place to start. It certainly doesn't take in substantial executive salaries, but at this point in the company's development, I would think they're getting some major stock options, not major pay. I would hope that most employees are seeing substantial stock, it gives them a big incentive to see that the company succeeds.
Gary
Penny, are you saying that on $80 million in income they'd only earn $10 million. I believe you're being very conservative if you are, I think they're positioned to earn 50% or more, but most of what they earn will be invested in expanding capacity.
I don't know where Round got the $80 million figure, but if it's true, I believe that stock prices in the dime to quarter range are possible.
I also agree with you that placing stop losses as the stock moves up would probably be a prudent approach. I've seen emotion carry a penny stock to over $20, but emotion cannot sustain a stock price. If CTKH has earnings that justify a dime it's very possible that emotions could carry it to a dollar or more. If you take advantage of emotion and get out near the high, you may be able to take a huge profit and still have double, or more shares when the stock price settles back to where it belongs.
Gary
Penny, are you saying that on $80 million in income they'd only earn $10 million. I believe you're being very conservative if you are, I think they're positioned to earn 50% or more, but most of what they earn will be invested in expanding capacity.
I don't know where Round got the $80 million figure, but if it's true, I believe that stock prices in the dime to quarter range are possible.
I also agree with you that placing stop losses as the stock moves up would probably be a prudent approach. I've seen emotion carry a penny stock to over $20, but emotion cannot sustain a stock price. If CTKH has earnings that justify a dime it's very possible that emotions could carry it to a dollar or more. If you take advantage of emotion and get out near the high, you may be able to take a huge profit and still have double, or more shares when the stock price settles back to where it belongs.
Gary
Chucker, I'd be very happy with the Jets.
My daughter live in Chelsea, but she wouldn't have the foggiest idea of what she was looking at if she went to CTKH.
I just wonder if we don't have any investors in the New York area who could visit CTKH and get a feel for what's happening there. I doubt if they'd get a complete tour, but they could see enough to confirm all that Fayiz is saying.
I know Round's been there, but that was several months ago, it seems that they now either have many additional capabilities, or they have access to them.
Gary
You have two teams in New York City, it's certainly an exciting place, our daughter's living there and we love visiting, but couldn't you spare us a football team here in L.A.
I have no idea how much of a commute it is from NY City to Cetek's facility, I gather it's well away from the city.
I gather that Cetek doesn't exactly welcome investors to tour the facility, not unlike other companies I've heard of. It would be great if someone knowledgeable could examine what's happening there, but I can understand Fayiz wanting to guard how he's able to do what he does.
I believe that on Monday we could get a quarterly message, I hope it has some meat in it, but regardless, it's better than no information at all from the company. If Fayiz is serious about getting off the pinks, I believe he'll have to supply something like three years of audited data, in that it becomes public when he does. I don't really think it matters that much what the data says, the fact that we get data will be huge for the stock.
Gary
Many years ago my favorite football team left L.A. because a number of commissioners wouldn't fix up the restrooms. Since then we've had the Raider's move in and out because those very same commissioner's didn't live up to their promises.
You guys at least have teams. Here in L.A., probably the biggest market in the country, we cannot get a team because of all the politicians arguing about where to put it and how to pay for a stadium.
I still love pro football, and am still a Ram's fan, but I cannot get terribly excited about the Super Bowl this year. I probably will as the game approaches.
In the mean time, San Francisco continues to move toward L.A. at a rate of a few inches a year, I don't know if the politicians will get us a team before San Francisco becomes an L.A. suburb.
Gary
Il Padrino, you're right, the Jet's should have won, but of course if the Charger's made a fairly routine kick they should have never been there. I just hope the Super Bowl's a good game, I really don't have loyalties toward either team.
As for buying back shares, anything in the billions of shares is an awfully big number if you want stock prices that go into the dollar range. I don't want to see a reverse split, but even if Fayiz eliminates a few billion shares, it will still be discussed. I'm all for buying back shares, but not at the expense of corporate growth. Let's hope they can do both.
Gary