Veltex Corporation (VLXC)

[Growth And Value]

KCA Ownership and additional shares-Some Thoughts

I am no insider, so I don't know the facts. But, I can think of possible ways the K.C.A. Garments acquisition occured.

1) Follow the sales! VLXC sales increased dramatically in the first quarter of 2004. The acquisition did at least begin in early 2004.

2) I'm not a lawyer, but don't a lot of companies assign performance goals along with the total acquisition value? Let's say VLXC pays $2 Million cash up front no matter what. They had to invest 1.8 Million due to the Bangladesh "tax holiday anyway". Either they reinvest or they pay taxes, so reinvest is a good answer.

3) K.C.A. probably would rather have 1.9 Million shares at about $2 per share than 190 Million at $0.02 I would think. So, let say K.C.A. meets the sales goal after six months, so they are awarded the shares. They are given the shares post R/S.

4) Matin probably didn't give up 50% ownership, so maybe it goes something like this.

6.8 Million Total Outstanding
3.45 Million Matin
1.9 Million K.C.A.
1.45 Million (float) Us Individuals

5) Perhaps some of the nearly 5 million shares were used in 2004 were to convert debt to equity and the other part were issued to K.C.A.

Just my thoughts, I don't know, but this makes sense to me.