hat neuen report verfasst. Bitte hier nachlesen:
ANALYST SUMMARY
Given the magnitude and extent of HYRF’s clarifications and corrections to both past publicly disseminated press releases and previous Wasserman Morris reports in a aftermarket press release on 10/26/05, and the fact that the Wasserman Morris equity reports were previously subjected to error and omission review for material fact correctness by Hyrdroflo’s CEO Dennis Mast prior to release, the 10/26/05 recent news release has prompted a Downgrade from Speculative Buy to Neutral. The Neutral Rating also takes consideration of the fact that there were Board member compensation misstatements in the 10K and that the Company had received a second subpoena from the SEC regarding a nonpublic fact-finding inquiry into the activities of other entities not managed by Hydroflo, Inc. and the fact that Hydroflo, its CEO Dennis Mast, and MARTI COO George Moore have received subpoenas in connection with a formal investigation that includes inquiries into the accuracy of Hydroflo's press releases and public filings.
Further, while the Price Target is currently under review it is notable that the valuation rationale only recognized a portion of revenue in the following Wasserman Morris report statement: “it is likely to provide [Hydroflo] with roughly $210 million in revenues for the next two years from the sale of water filters and pitchers in the Chinese Market.” Also, it is noteworthy that the interpretation of these revenues has been clarified by HYRF in the recent news release.
The valuation was based on both current NAV and reported earnings in conjunction with growth estimates that discount potential contract revenue. We also assigned substantial discounts in the valuation approach with a 40% discount to P/E and 30% discount to P/B given the risks associated with an early stage company (specifically the untested contract terms), the OTCBB exchange and the Company’s liquidity. That said, given the complexity of HYRF portfolio of companies with respect to contracts and terms, the sundry restated, corrected and/or clarified developments of 11 specified public statements that involve 13 press releases, we will be cautious about events going-forward.
Below, we highlight the plethora of specific corrections to past press releases. Specifically related to corrective statements by HYRF to past Wasserman Morris reports, these will be subject to interpretation and independent views by Wasserman Morris and separate from management public statements. However, the nature of the valuation approach is more conservative and cautious about prospective contracts, and we would specifically like to correct the term ‘likely’ and revise that term to ‘potential’ to the extent the term was used with prospective contracts. Further, inasmuch as the other specific corrections to Wasserman Morris reports were largely related to previous press releases that have since been restated, we note that our interpretation of the events surrounding the regions around Katrina hurricane-ravaged regions were based on expectation of HYRF’s companies having only a marginal conversion of the disaster relief into products and services, which in-and-of-itself, had no impact on valuation or rating. Der gesamte Bericht kann ueber email : rwasserman@wassermanmorris.com angefordert werden.
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