Veltex Corporation (VLXC)

[Mastman]

First we hear complaints that Veltex is doing nothing but putting out too many releases that wastes funds. Now we hear compliants that there is not enough information being released.

We know that Veltex is undergoing the 2004 audit. Sure it's late, much too late. No one is going to argue with that fact.

We know that Veltex made some significant individual sales earlier in the year. What we seem to forget is the nature of the core business. Veltex is set up to sell to the promotional products industry through a network of 17+ thousand US and 4000 CN distributors who buy from a group of manufactures. These distributors call in orders when they get them from their customers. Most are small orders for a few dozens of items. Therefore the business is built on a high volume of orders and these do not lend themselves to grandios announcements.

We know that Veltex purchased the PPD of Explorer headgear.

We know that Veltex, through Explorer aquired the rights to sell Top-Flight branded gear.

We know that Veltex acquired the rights to sell John Daly branded products and is in the midst of buying a 50% interest in John Daly Enterprises.

We know that Veltex acquired the rights to the Gidget name.

We have seen statements regarding Q1 earnings, but we have not seen the 2004 audit that, if it comes in as advertized, would give credence to the 2005 expectations. We should expect to Q2 figures soon?

All in all I think we have been given a lot of information. Our continuing problem is the fact that we are not a reporting company and as such there will be no SEC documents forthcoming. All this means one thing. No one here knows if what we are told is absolutely true. If it is, this stock should be worth between 8 and 12 bucks a share.

Facing a fact here, what we are buying is a gamble. Unless you have done some DD on your own that substanciates your investment it is my opinion that you should be cautious whenever dealing with a company that does not file SEC reports. As we have all recently learned, even some of those who do file these reports cannot be trusted.