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Sunday, July 23, 2006

Bulldog Technologies (BLLD) revisited

BLLD (sec) This is the container security company which is pretty much just starting up. They started operations in Mexico and was working with Mexico to do security for a new port expansion to offload Los Angeles.
Last looked at them here.

Let's see what's happened since Jan 26, 2006:
An anonymous Fortune 500 health care company ordered some MiniBOSS units (BLLD has both MiniBOSS and RoadBOSS GTS). BLLD launched a web-based tracking system called BOSStrack. They reached some vague profitability milestone. An anonymous retailer with 500+ stores purchased MiniBOSS. Trellus Management Company owns 6.58% of the stock.

At the end of Feb 2006, BLLD issued a bunch of toxic convertibles. Looks to be $2 million toxic amount plus around 3 million shares. The stock price went from about $1.10 to 43 cents where it is now. The principal is $2 million and the market price conversion is based on 20 trading days (the conversion is at 90% of that). Right now, the market cap is around $10 million so at this price, the investors will get something around 18% of the company.

Associated with the toxic convertibles, people bailed out of 6.4 million shares, at least a big chunk of it was repriced convertibles and stuff associated with the new toxic converts. And it continues.

A VAR agreement with Smart Cargo Soluciones Integrales in Ecuador. $1.4 million in revenues. And then three more VAR agreements in Latin America: Chile, Venezuela, and Mexico. No dollar amount. Then another press release with a dollar amount of $195K plus $72K in airtime services in Venezuela.

Launched the RoadBOSS GTS.

Late 10-Q filing for period ending Feb 28, 2006.
25 million shares plus all those godamn toxic convertibles, warrants, and whatever. 5.5 million options outstanding.

No surprise that the balance sheet improved due to the huge dilution. But they now have an equity deficit thanks to the unlimited nature of the convertibles. $5 million in assets (up from $2 million in August 05).

Tiny revenue. Huge expenses. Their cash burn rate seems to be over $850K per month. $3.4 million proceeds from convertibles, but operations burned up $2.5 million.

They're going to have huge expenses (est. $4.59 million for 12 months) going forward and it's not clear to me if this puppy will float. And if the stock price drops enough, the dilution will be enormous.

I'd assume something like 40 million totally diluted shares... and even that might be optimistic.

BLLD is working with the Port of Manzanillo in Mexico. It's Mexico's biggest Pacific port. They also are working with the Port of Ensenada.

Director resigns. And then a re-org: CEO steps down to focus on Latin America, CTO becomes acting CEO. CFO is terminated. A consultant will be used. And then, new CEO.

They raised a paltry $750K for 90 days secured by all the assets of the company. Sounds like cash flow panic time.

The latest 10-Q is late.

I'd say the company is worth following just to see what happens, but I'm definitely not buying any shares.

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