This board is quiet. I will use it to record my thoughts about Fonix. I will not provide opinions as to the stock going up or down in price, I want to record the facts.
Fonix a company with a viable product that will soon be in demand. In telematics (On Star), games (XBox), telephone answering (Sears has voice, don't know who the developer is) when I call it is similiar to talking to the computer on Star Trek, text to speech (I Speak), voice recognition, and others.
Fonix has hired a new vice president (Bruess)that was with Siemans to head up Fonix International (Fonix Domestic & Fonix Korea)this appears to expansions (telematics in Europe -autos & trucks on GPS voice)Fonix has the smallest footprint and fits well in embedded chips. Why would a successful VP join a company with no or limited future. Revenue increasing every quarter at triple digits percentage.
Employees working six months without pay (limited pay) with an opportunity to take Fonix Stock in the next 24 months in lieu of money. Why? The Fonix engineers cannot find employment at Nuanance or Speechworks and telecommute. Maybe they signed non-disclosure statements and cannot work for anyone other than Fonix. Is something going to happen within the next 24 months?
Operating expenses in the future will hover around $12 million a year (50% of 2002 3rd quarter times 4 operations expense) There is no debt. There are some financing arrangements: Series D Debentures with Breckenridge for $1.5 million for a six months (October 02 - April 03)with repayments of $250,000 per month starting in Dec 02 with a caveat to covert the debentures into common stock anytime before 1 April 03. Colleratal was 83,333,333 shares, so managment must think $.018 per share the bottom of the dilution ( 1,500,000/83,333,333). In addition a
discount (interest) of $404,444 was recorded (7,777,778 x $.052). This equates to a 27% (404,444/1,500,000)interest rate for 6 months or 54% a year, Fonix can replace those shares today a 9% (7,777,778 x $.018 =$140,000/$1,500,000 or 18%. The 18% is a reasonable rate. Appears management thinks $.018 is a bottom for the stock. The amount $1.5 million is approximately the same amount as the line of credit draws to Unveil with an additonal advance of $100,000 in October 2002 (a time when Fonx was having cash flow problems, ?? Unable to pay employees. These amounts is for a license agreement and a 12% interest in Unveil if Unveil is unable to pay the note.
All this shows that Fonx can owns 26.7% of Audium, 12% of Unveil, and the assets of Force Computers. All this at a time when Fonix had cash flow problems. (All Fonix R&D is paid for?)
Appears that Fonix will continue in business and the dilution has stopped at $.018. There will be a reverse split for 40 to 1 in March (pre-dates the Breckenridge 9 April 2003 conversion date) which will put outstanding shares at 15 million. If Fonix in 2003 has sales of $15 million and cost of 12 million, there will be profit of 3 million or $.20 per share. New investors may drive the pps up to enable re-listing and at a time when money managers will be looking for companies to invest in.
Reader, if you can provide some further insight based upon factual data from a different perspective or expand on my comments, it will appreciated.
