The Figures and the Triggers, page-93

Hi Vmk Research

I have thought a bit about your approach to LVT. Your ability to analyse the balance sheet and to make reasonable projections is better than my ability to do so. However, I think that way of seeing things is premature for this company.

At this point in time, I think the key elements are to analyse the business idea, the business structure and the qualities of the board. Your analysis has highlighted the recent weaknesses concerning growth in sales and a lack of discipline with cash burn. To my way of thinking, the board is well qualified for the business they are running and the company is very well positioned in its corporate relationships. That, I think at this stage, takes precedence over money management issues because the fundamental questions are... is this a real business and does the management have the skill set to make it work. I believe the answer to both questions is yes.

The money management is a skill set which can be learned. If in a year's time the same concerns about how the management handles money persists then that would be the time to start worrying about it. As the company grows, I would like to see a CFO appointed to the board.

In general, I don't think a tech company is any different to any other sort of business... it only boils down to whether the business plan has identified a genuine need in the market and whether the company is addressing that need. As I see it LVT ticks both of those boxes... so there is a bit of slack available regards the management's learning curve to get the execution correct.... imo.