ZYL - Zylotech

[perm]

with the zyl getting into bed with IBM this should start to move

anybody else holding

[Lizard]

Should I admit to be holding? I bought some at 2.4cps last year in a cynical and flippant moment. The logic was based entirely around tiny market cap, a change in management and a possible change in sentiment.

They have some big hurdles to negotiate in the next quarter - the QTK offer and the requirement for more cash. The string of deals and agreements will take a while to show their worth and it is going to take some time and cash before they can create a profitable business. But then this market cap was so small, they could multi-bag just on talk. Is there a real business buried in ZYL? Possibly. What's it worth? No idea!

(I am considering pulling my original stake about now and just leaving the profit money - current price 5.6cps)

[Lizard]

Now 8cps after dumping the (QTK associated) chairman. Indebted to Nat Bank for failing to process my sell order for 50% of my holding at 6.4cps on Friday.

[Lizard]

Sold one quarter of my holdings at 13cps to get my original stake out plus a 25% profit. The rest of the shares can run. Depth is still hot and yet to see if there is something more behind this. If it's just what we've seen to date, I think it's looking fairly priced given they will need to raise more cash. But at least now, it should be at a better price!

[perm]

new chairman annouced... up 78% atm cant complain at that

km

[Lizard]

SPP at 4.2cps just announced. Given it is very unlikely they will open at anywhere close to 4.2cps tomorrow, this is going to be easy arbitrage $'s!!

[Barrel Scraper]

Quick Question..

Was it a 25:1 consolidation and no other dilution since 07/04?

This news was interesting enough to dive into Davies Locker.

[Lizard]

quote:Originally posted by Barrel Scraper

Quick Question..

Was it a 25:1 consolidation and no other dilution since 07/04?

This news was interesting enough to dive into Davies Locker.

25:1 consolidation in May 06. Placement of 12.6m shares to Mark Pallister (also associated with QTK) at 2.6cps on 16 Aug 06.

If you're not up with this soapie, the Chairman of ZYL (until today) has been Andrew Unterwegger - MD of QTK. QTK have made an offer to purchase the Zylotech business from ZYL for $2m QTK shares (of unknown real value). This move was clearly not supported by the ZYL independent directors, but due to the significant holding by Mark Pallister, may have been in danger of being passed.

A flurry of activity ensued, with ZYL announcing a number of new reseller agreements, pilot sales and partnerships. The vote was postponed from an egm to the agm of 19th April. Now the Chairman has been replaced and the much needed cash injection organised - with up to 30% of new capital to be issued, diluting the existing major shareholder just prior to the agm (I am assuming that the new shares will be entitled to vote, though I am not certain of that).

To some extent, you might say this has been an organised "marketing ploy" by the company to both gain the ongoing working capital and to see off the QTK bid. The amount of capital to be raised still only amounts to around $1.3m max, so the chances of them rapidly building a successful business using only this small amount of working capital are slim. But it does give them a further 12 months of operation in which to line up some real achievements and prove whether or not they have really changed their spots.

[Lizard]

Independent valuers report out with regard to the QTK offer puts the value of ZYL at $9.1 - $10.96m (i.e. slightly below current sp).

Interestingly, they seem to have based that on best estimates of 2007 year NPAT (from directors figures, which were thought to be fair and reasonable) of $1.82m and applied a P/E of 5 - 6 for risk.

[Lizard]

Another announcement today in a string of strong contract-win announcements. Is ZYL going to be the one-in-a-hundred-dodgy-spec share which turns respectable????

Talk is easy though - the next quarterly will be one to watch for signs of substance emerging - and a guess at future cash needs...