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  • ezdeek ezdeek Jul 4, 2013 2:25 PM Flag

    Phil Frohlich, Prescott Capital, NOL's

    Gee, Wally, do you think that Mr. Frohlich has a plan to utilize the NOL's? DO you think that plan was hatched in 2010 when Prescott got seats on the board and immediately allowed the shares to go to the pink sheets?

    Do you think they can orchestrate a return on their 4.5 million investment from 2009? They also have invested thousands and thousands of hours. I wonder if it would be a good idea to buy shares at 50 cents, knowing that Frohlich and Prescott got theirs at $1.90 and cannot buy now due to insider trading laws.

    Phil Frohlich is the founder of Prescott Group Capital Management, L.L.C., an investment management company for high net worth investors. He was formerly president of Siegfried Companies, Inc. and a tax principal with what is now the international accounting firm of Ernst & Young. He received a BBA in economics from the University of Oklahoma, an MBA from the University of Texas at Austin and a law degree from the University of Tulsa.

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    • Remember, that Prescott's 4.5 million investment (2.4 million shares) was worth just 140K during the dog days of December, 2011, when the shares hit 6 cents for a few days. Once the verdict came out, everything was in place. At that point they know, that in time, their 18 percent ownership will be worth more than their original investment, as it is simple math......NOL's are worth tens of millions alone, and their 18 percent is worth more than their 4.5 million original investment. Throw in the Lehman potential windfall, which would be gravy, and Prescott can take out 15 million here if all goes well. But even with no luck at all, they are practically guaranteed to get their 4.5 million back at some point in the next two years, either by way of a $2 stock price, or other payout/liquidation/sale, etc.

      But if the shares are worth so much more than 50 cents, why are the shares trading at just 50 cents? Well, the verdict was out on December 29th, and Prescott new about the verdict and could have bought shares on December 30th and 31st of 2011, but obviously they couldn't, as it would be insider trading, and it would also jeopardize the NOL's. Don't you think that they would have loved to buy shares at 7-10 cents at that time?

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