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James Emerson, CFA

 
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  • Fusion Increases Second Quarter Revenue by 63% [View article]
    While the headline year of year growth in revenue seems impressive it was almost entirely driven by the Broadvox acquisition. Quarter over quarter revenue growth was a paltry 1%. Potential investors should be concerned that year over year operating cash flow only increased by $0.5 million on the revenue increase of $8.9 million
    Aug 20 02:20 PM | Likes Like |Link to Comment
  • Fusion Increases Second Quarter Revenue by 63% [View article]
    Something is suspect about the announcement which was made on Aug 15. "On August 12, 2014, Fusion Telecommunications International, Inc. (the “Company”), with the approval of its audit committee, terminated the engagement of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm. The Company’s decision to terminate the engagement was based on uncertainty surrounding the time to complete the review of the Company’s consolidated financial statements for the quarterly period ended June 30, 2014." It would seem to me if the company was concerned about timing that they wouldn't change accountants seven weeks after the end of the quarter. Seems highly unlikely that the new accounting firm could conduct a review of the financial statements in the seven days between when they were engaged and when the financials were released. It may be nothing. KPMG is top tier firm and may not have been as responsive to the company as Rothstein Kass was. Eisner Amper is a high quality firm from the same tier as Rothstein Kass just below KPMG. Note: Either firms that I worked for have or I have engaged all three firms for audit/assurance and or attestation work. They are all excellent accountants. KPMG's statement was terse at best "On August 12, 2014, we were dismissed. We have read Fusion’s statements included under Item 4.01 of its Form 8-K dated August 15, 2014, and we agree with such statements, except that we are not in a position to agree or disagree with Fusion’s stated reason to terminate the engagement"
    Aug 20 01:31 PM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    Looks like about $300K worth of equipment was purchased in the quarter, an insignificant amount by any measure and clearly inadequate to commence an open pit mining operation. The real issue is how few quarters of cash this company has left. TRX had $3.5 million of net cash at the end of May. That is probably down to around $2.5 million based on the burn rate. There is absolutely no prospect of commercial production with this little cash in the bank.
    Jul 17 09:07 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    You can document it by looking at the merger documents and by reviewing insider transactions on the official Canadian insider transaction site http://www.sedi.ca
    Jul 17 08:53 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    I got my balance sheet from the official site for Canadian securities filings http://www.sedar.com. The difference between $2.1 million and $1.7 million per quarter is trivial for a company with $3.5 million in cash. The cash burn rate is an estimate and the actual amount is variable due to discretionary expenditures on exploration and mine development activities. The negative cash flow for repayment of convertible debt will not be recurring; however, TRX will have to pay STAMICO close to that amount in 2015 to maintain the Buckreef JV.

    In order to stay in business, TRX needs to come up with money from somewhere. It doesn't matter if Sinclair participates. There is no information content to his actions. He has been a significant net seller of shares over the years, which is odd behavior for the CEO of an exploration company. Previously every time he purchased shares, he sold.
    Jul 17 08:48 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    TRX has stated that their strategy is to commence production at the company's primary asset, Buckreef. I view the odds of the company successfully implementing that strategy as close to zero. They have already missed their progress targets announced at the Annual General meeting in February this year.

    TRX is currently burning about $2.1 million of cash per quarter. As of May 31st, the company had $4.3 million of cash on the balance sheet and $800,000 of payables for net cash of $3.5 million. I estimate that the current cash position is about $2.5 million after accounting for the passage of a month and a half from the date of the financial statements. Given their precarious financial situation, I seriously doubt that TRX will boost the exploration budget. My opinion is quite the opposite in fact, I think that TRX will soon reduce or suspend mining operations in Tanzania.
    Jul 15 06:01 PM | Likes Like |Link to Comment
  • Why Seeking Alpha Embraces Pseudonymity [View article]
    Management of companies has the coercive power to silence critics. The use of a pseudonym protects authors from vindictive managements that have company treasuries at their disposal to engage lawyers to file legal actions. Read David Einhorn's book Fooling Some of the People All of the Time. There would be little to no discourse about short candidates without the protection afforded by annonymity on SeekingAlpha.
    Mar 19 04:54 PM | 4 Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    All the shares Mr. Sinclair sold speak louder than the few he has left. If he and management were at all confident they would have been buying stock in the open market when it was below $2.
    Mar 19 09:20 AM | Likes Like |Link to Comment
  • BlackBerry Is Still A Great Buy In 2014 And What's Next For The Market [View article]
    Just curious, how exactly is the company going to 1) return to the core strengths of enterprise and security 2) implement changes in the Company's Devices business without actually selling any devices?
    Feb 20 10:31 AM | 3 Likes Like |Link to Comment
  • BlackBerry Is Still A Great Buy In 2014 And What's Next For The Market [View article]
    Just some color... My assistant called T-Mobile to order a Q10. The rep. told her that Blackberry is going out of business and she shouldn't get this phone. I tried to get the Q10 in a T Mobile store in midtown Manhattan. not only is the device not available the salesperson told me that all carriers except AT&T were going to drop Blackberry.
    Feb 20 09:13 AM | 4 Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    Sinclair has been a consistent seller in the $3 to $5 share price range. While he may allude to higher prices his actions tell a different story about his price expectations. The CFO sold a significant portion of his stock with a $3 handle towards the end of last year, hardly a vote of confidence.
    Feb 19 11:42 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    Gold less than $3,000. At $700 gold the NPV for Buckreef is negative and TRX will likely forgo making the payments to remain in the partnership with STAMICO.
    Feb 19 11:39 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    I have no position. But, yes I am extremely bearish on the prospects of this company. My prediction is that it will trade below $1 before the end of 2014 and around $0.25 by the end of 2015. I highly doubt that this stock will ever be anywhere near $5 ever again.
    Feb 18 04:55 PM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    Management can target any year to start production. A short list of previous targets; 2013, 2012, 2011. Reality is that the company has not invested the requisite amount of capital to begin open pit mining at the Buckreef project. The PEA from 2012 indicates that the CapEx requirement for an open pit mine is in excess of $200 million and TRX has less than $10 million on its balance sheet.

    Further despite his recemt travels to Tanzania, The CEO appears to have failed in his attempt to have the Kigosi project area removed from the game preserve or 'degazetted' as he says. While TRX possesses a mining license for Kigosi, the game preserve designation prevents the company from actually mining. If you read the Kigosi Access Agreement, you will see that the company is restricted in what it can do within the game preserve.
    Feb 18 04:18 PM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    The PEA prepared by Venmyn Independent Projects (PTY) Limited for TRX dated August 23, 2012 indicates that "the local electrical power supply grid (TanEsco) is located within a 50km to 60km distance of the project." Their estimate is that it would cost "USD8m capital for grid power connection" "The total power requirements for the Buckreef Project mining operations were estimated at 12MW for the BRMA and 24MW for the BZMA."

    There is a great disparity between what the CEO now says and what the paid consultant determined in 2012. Note that Mr. Sinclair uses the word camp and not the word mine. I suspect that the grid power available at the camp is not adequate to operate the mining equipment. I find it highly unlikely that Venmyn would have failed to notice a suitable grid power connection point just 1 km away.
    Feb 18 04:03 PM | Likes Like |Link to Comment
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