For those who are still following the TLPE situation, quarterly numbers came out today, and they were hardly what the company forecast last year, but nevertheless quite healthy.
TLPE, like NWKI, has also entered into a debt restructuring that is favorable to shareholders. However, unlike NWKI- there’s still has a conversion feature.
Revenues for the quarter were $6.5 million, up from $563k the previous year. Earnings from operations were about $250k, so they continue to run a profitable operation.
The number of shares I&O increased from 86 million to 110.5 million during the quarter. If the financier has been converting debt to equity and selling the shares, that would help explain both the additional shares I&O, and the recent swoon in the stock price.
According to the 10Q filing, about 1.85 million shares have been converted from debt to equity in the last six months. If it has been done over the last two months, it would help explain the consistent selling pressure on the stock.
This has proven to be another easy money situation- the stock has bounced from the new all time low of $.14 to about $.20 this week.
I don’t have a relationship with management on this one, so I can’t get answers to questions. However, comments and questions are welcome. I’ll try to give accurate answers.
I still have 10,000 shares of TLPE and have been following it as close as possible. So where do you stand on it now that the quarterly numbers have come out and actualy make the company look pretty good.
Editor: I am so so on it. I guess you would call it a hold. The company’s convertible debt continues to be the big problem in my mind. There was about 2 million shares converted so far this year. That creates excess supply in the market. There could be a lot more to go. Fundametally, it seems as if they are headed in the right direction. Another issue- shares I&O went from 85 million to 110 million in last quarter- also makes it tough for the stock to trade well. When the dilutive issuances come to an end, the stock will probably trade much better. One big positive- they are in a sweet spot in the market.
I recently started viewing your website and have been looking through some archives. TLPE has caught my eye and I was wondering if you think it would be worth picking some up at .12 or less for the long term. The company seems to have many positive prospects but do they offset the negatives. Curious as to your thoughts.
Editor: If it were my money, I would still avoid it. There is nothing wrong with the company, but I believe there is a lot wrong with the stock- all related to their massive convertible debt with the most aggredious microcap financier out there. They have huge convertible debt, which suggests the supply of stock could be endless. Two quarters ago there were 86 million I&O- next quarter 110 million, this quarter 115 million. I don’t know if this is all coming from conversions because it would take a lot of digging into the 10Q- I did note they have been awarded huge numbers of warrants starting with conversion prices of $.11- also suggests massive supplies- This company really needs to start delivering huge numbers and the stock needs to trade a lot more volume for me to believe the stock has a shot. The company is doing ok. If you are interested in the MVNO space look at Titan Global (TTGL)- they have huge sales, the ability to add subscribers, and a much stonger balance sheet and lower market cap. Lots more upside there.