DRDF.OB***Sector: Technology***Industry: Computer Peripherals

[domination]

needs big volume
these guys ever going to r/s?

[gmarc66]

News on Feb 22 had finally made this stock go for a very nice run. The next day there was a 29% pullback...today up 22% from that pullback.

I bought in at .0085...was wondering if some TA experts (Setravis ) and any others who would like to give their take on the future outcome of this stocks pps would be much appreciated. Not sure if i should just be patient and hold on to my position to see a possible further rise or just take a loss. I know that the float is pretty low and as i have heard it is very undervalued...this was once a 3sf penny pick by David.

Also, the 8-k was released today...perhaps that is why the pps rose some today.

http://www.pinksheets.com/quote/filings.jsp?symbol=DRDF

Thanks very much,

Julia

Dalrada Financial Reports Second Quarter Results
Wednesday February 22, 9:20 am ET 
- $17.8 Million Revenues; $3.3 Million Net Profit -

SAN DIEGO, Feb. 22 /PRNewswire-FirstCall/ -- Dalrada Financial Corporation (OTC Bulletin Board: DRDF - News) today announced its financial results for the second quarter ended December 31, 2005. The Company reported revenues of $17.8 million for the quarter, a 263 percent increase over the prior year period. Net income for the second quarter was $3.3 million.
ADVERTISEMENT
 

For the six-month period ended December 31, 2005, Dalrada reported revenues of $29.9 million compared to $9.4 million in the prior year period. Net income for the six month period was $3.1 million.

"We are especially pleased with these results as they are indicative of the direction we set for the Company two years ago," said Brian Bonar, CEO. "Our balance sheet continues to improve and our business prospects are positive moving forward," he added.

Dalrada provides employer business solutions to small and medium-size businesses. Its customers outsource many administrative tasks associated with human resources management to Dalrada. Services include payroll processing, workers' compensation insurance, employee benefits (including 401k and health insurance plans), and business risk management (including general and professional liability insurance), and staffing services.

Dalrada provides these services through its subsidiary companies and operating groups, which include: SourceOne Group, Heritage Staffing, The Solvis Group, M&M Nursing, MedicalHR, and CallCenterHR. Its Solvis subsidiary also operates ImageTech, Inc., whose proprietary products include ColorBlind® software and PhotoMotion(TM), a patented color medium of multi-image transparencies.

About Dalrada Financial Corporation:

Dalrada Financial Corporation provides employer business solutions to small to medium-size businesses. The Company assists clients in providing a wide variety of management and employee programs that increase business efficiency. These include: payroll and human resources support, staffing, employee benefits, risk management insurance (including workers' compensation and business liability), financial management, and other business management products and services.

Information on the Dalrada family of companies is available at: www.dalrada.com, www.thesolvisgroup.com, www.mandmnursing.com, www.colorvisuals.com, and www.color.com.

[gmarc66]

Hey Lucas Scott ...i know ur in this too...do u have any thoughts on this? Bought this on the recent run up...not sure if i should just sell and cut my losses here...or do u think this could have a possible turn around soon?

Any thoughts appreciated....technical assessments also would be much appreciated.

thanks very much

glta

julia

[Lucas Scott]

Hi Julia - I am long from .0081, so I'm quite a bit underwater, but I'm not concerned about it. I have a GTC order to double my position at .0051 should it hit there. A bullish pennant has formed on the chart, which is a positive sign technically.  If the price falls below the bottom of the pennant, then it becomes a flag formation, which would still be bullish. But all TA jibberish aside, the fundamentals tell me to hold. They just had a great quarter. It doesn't look like a one time thing as they've shown top-line growth going back to '03. I'm impressed by the improved gross margin percentage in their last quarter. If they can maintain a 20% margin, DRDF should be a 10-bagger eventually. I'm willing to wait for it to happen. My stop loss is 50% (I would sell at .004).

Whether you hold or not depends on your capital situation. I am in a position where holding DRDF has little impact on my ability to buy other stocks. I think the next run for DRDF could begin in a day or could take up to 2 months, and I have no problem holding this for a couple months.

As David Randolph would say "I will continue to hold <stock name> no matter what." (of course a lot of times he'll then sell the stock a few weeks later LOL).

[gmarc66]

Hey Lucas, thanks for the TA and your imput   When i see the pps continually dropping (i bought at .0085, stop laughing) it always freaks me out, especially when it drops a significant amount. So, u made me feel better at least, I will hold as well then..as i often sell in panic(then get all depressed and go sulk iin a corner and scarf down an entire cake),then the next day the thing takes off...Not, going to happen this time! Good idea...maybe I will avg. down too...why not...i'll buy the whole dang company...its a lower floater/market cap. i hear...so how much could it be really?

Great...so, i will just copy you if you don't mind.  You seem to do well.....like ur style...you got good TA (technical ability)

As David Randolph would say "I will continue to hold <stock name> no matter what." (of course a lot of times he'll then sell the stock a few weeks later LOL).

You're so funny, you remind me of one of my brothers...exact same mischievous, wicked sense of humour,..such an instigator....I bet you were a little devil as a kid... it's ok...so was I.    

thanks a bunch LuketheNuke...cause ur always dropping little ignited comments everywhere...lol    

julia

[Lucas Scott]

It went as low as .0052 today, but they wouldn't let it drop .0001 more so I could double up on my position   The hammer candle could be a reversal and the stock may start moving back up now. We'll find out soon.

[gmarc66]

Good to hear Lucas...i was waiting for it to drop further too to add a little. Although, everytime i see it drop I turn green...I just wish DRDF would too

gl to us

julia

[poorman1]

I'm on board with DRDF.ob.  Bought in this morning at $.059, although NITE and UBSS were reluctant to fill my limit orders at $.006 (above ask).  Appears solid at the 10 day moving average.

[stockhunter2004]

I bought 400,000 shares of DRDF when David recommend it at about $.0036 pps.  I decided to sell today at $.0051 pps because I read the 8-K filed on 2/24/06 describes a convertible note transaction with the potential for significant dilution.

According to the 8-K:

"On February 13, 2006, Dalrada Financial Corporation issued convertible notes to various investors in exchange for Gross proceeds of $5,000,000, with $4,384,800 of net proceeds going to the Company. $1,757,902 of the net proceeds were used directly to pay debt settlements.

"The convertible notes mature in two years, at a 15% per annum interest rate and call for monthly interest payments with the principal due on maturity. If Dalrada defaults on the interest payments, the investors will have the right to convert the notes into common shares at a seventy-five percent (75%) discount to market price. In addition, warrants for 1,352,000,000 shares of common stock with an exercise price of $.005 were issued to the investors as part of the funding. These warrants expire in seven years and have a cashless exercise provision."

Here is a link to the filing:

http://www.sec.gov/Archives/edgar/data/725394/000126606806000032/0001266068-06-000032-index.htm

Because there are so many warrants exercisable at $.005, that exercise price could be a ceiling on the PPS for the near term.  If the price exceeds $.005, the warrant holders may just sell the warrants and bank the profit while holding onto the convertible notes.

[shipman]

Ok,
     Nice post on the 8k.  5 million bucks at 15% per year= 750,000 dollars a year or 62,500 a month.  1.5 million in total interest.  Total 6.5 million for the notes and interest.    If you calculate the number of shares sold since the 02/13 date they are approximately 350 million shares,  if you average them at .005 that equals 1.75 million dollars.  That takes care of the interest plus a quarter million left over.
     So how many more shares of the some 800 million float would have to trade at .005 to offset the other 4.75 million dollars (included was the interest) answer= 950 million shares.   Well if you average that out over the next 24 months you get some 39.6 million shares a month they have to sell at .005 to take care of the notes. 
     Let's say they can keep up their earnings with no growth (I suspect there will be growth) for the next 2 years.   3 million a quarter,  and they applied those profits to bringing down the liabilities (currently 30 million), you would have a company just about to be debt free when these notes come due.
      This doesn't appear to be that rosey....but, the company could grow.  And, I suspect that they wouldn't be leveraging out unless something was in the pipeline and they need some more cushion for expanding business.  So all it would take is one or two new big accounts to come on board to boost their revenues, validated the leverage, boost the share price, cut the above figures in half, and overall justify the notes and the recent spike in share value.  And at the end of the term, No dilution. 
       Anyway--this is all speculation and I am not a CPA.  Just some conjecture on why the chart looks like it does, and a possible scenario that may be underlying.  Good luck to everyone,  FYI, I'm holding out for the next PR.
      .005 just might be a floor not a lid, then again I've been wrong  before                          
                                                       Do Your DD
                                                             Ship   
     

[Lucas Scott]

My GTC order of .0051 finally got filled today. My average price is now .0066. The pennant has become a flag. That's ok I like flag formations better than pennants. Full steam ahead! 

[stockhunter2004]

Ship, you said...

"Let's say they can keep up their earnings with no growth (I suspect there will be growth) for the next 2 years.   3 million a quarter,  and they applied those profits to bringing down the liabilities (currently 30 million), you would have a company just about to be debt free when these notes come due."

The problem is that the $3M/Q was not from continuing operations.  Base on the 10-Q, it looks like most of the profit came from restructuring of debt...only about $0.5M was from new business.  Take a look at http://www.sec.gov/Archives/edgar/data/725394/000101968706000428/dalrada_10qsb-123105.txt

[shipman]

Stock,
       I looked.  You're right .5 mill from operations.  Still, doesn't mean that there isn't something brewing.  I'm watching very carefully.  My comments were more or less just thinking out loud,  not a genuine analysis.  Thanks for your eagle eye.   Not too rosey.   Let me give you your first Applaud.  I love criticism. 

[gri64]

I'm still holding with 0.007. I see we have a new support at $0.0045.
Do someone know any news? What happened today? 
Thanks for any TA and any thoughts.

By the way, is there anybody also as me long in DRDF?

[john b mcginnis]

I'm not an expert, but I think if we can break and hold above .007, we would be on firm ground. We need volume increasing and sustainable. And, some good news wouldn't hurt.
I'm holding 300,000 shares. Bought @ .0036 and .0044. I'd like to hold out for .03 to .05.
I plan to hold for awhile.