Reader Interaction - 20-23 May 2006

A Look at Cash-Flow and Debt Questions...



20-23 May 2006
EB Reader & PK Correspondence


PK,

Stumbled across this company by accident, and have bought a few shares.

Looks very interesting, but they are a little short of cash, and it looks like they are quite a ways away from positive cash flow. Do you think they can survive this period without taking on significant debt, or without substantial dilution?

Have you ever seen any predictions for revenue for 2007 and beyond?

Thanks


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EB Reader ~

On the positive side, you stumbled in with good company.

Congratulations on joining the shareholder team, though many here have their own interests at stake--for the moment, we are each focused on one singular target . . .

'the success surrounding ElectriPlast and Plastenna, and the eventual price per share.'

As for your question regarding predictions on revenue, some who have posted here, or emailed me privately, have spoken often about a Mr. Tolbin Smith's interest in this company, and praise his ability to forecast/pick stock plays and the details associated.

Unfortunately, I am not that caliber of an investor. I research companies, their products, the potential impacts, and the trends and histories of the company management. All this is done in order to predict a logical path of probability for the company and its prospective future.

In this company, I have seen a gambit, but I have seen the management learn from former lessons and resolve not to make similar mistakes.

One thing that gives me hope, actually two things, are:

the solid stance on obtaining PATENTs on their IP despite some missed opportunities--which in many cases turned out not to be opportunities at all.

the potential impact surrounding the product at hand. Intel is huge today because of its one-time niche market. Now they are trying to expand in other areas--their WiMAX foray for instance is an example of their ability to adjust with an ever-changing marketplace.

With over 100 patents and patents-pending, Integral and their ElectriPlast IP material, have a similar synergy, and the will to take whatever market(s) it exploits by storm.

The debt question you pose is key and has caused a few some concern, especially during the recent proxy vote. If you are asking for my opinion, I can say that the company has the funding--without touching those added shares--to push their product to market.

In other words, Money Is Not A Concern. If you are asking whether or not they are frugal about their funds, or better, will this recent influx of cash go to the company management's heads?

Once again I would have to say NO.

What many do not understand is that the management and some of their employees (in the early days of this company) went to work without pay, no yearly bonus, no nothing. Home loans were used to support the company; some employees were paid only in stock for a time.

Even today, were you to visit the company in Bellingham, you would find their offices sparse--no frills, no outlandish expense accounts.

I would describe their money management as learned and frugal.

I say learned because they survived something that spelled doom for many other companies about 6 years ago. DEBT.

Integral had a Debt Agreement with a company called Schwartz. Although made in good faith, Integral at the time hit upon two stumbling blocks that most companies never bounce back from--a drastic turn in the stock market due to the Dot.Com bust, and a frivolous lawsuit initiated by IAS Communications. The lawsuit was bogus, but the fact that it tied-up Integral's resources, and held up their planned marketing campaign to an emerging WiFi market hit hard, and many investors were scared away by the onslaught of this double whammy. Triple if you count on the fact that the loan with Schwarz had already been initiated.

Learning from their various lessons, Integral came back and resolved not to fall prey to any of the issues which almost lambasted the company--hence the PATENTS; hence their association with Preston, Ellis & Gates; hence their association with QuanStar and a number of financial firms and advisors.

Sorry for the history lesson and numerous spelling errors, but to be honest, funding is not a problem--and if what some of those who report what Mr. Smith notes is true. . . Well suffice it to say, debt not even a distant worry.