Dow Jones 9517.23 -70.67 10:08 am PST, September 5, 2003  NASDAQ 1868.45 -0.52 For info, visit access.smallcapnetwork.com S & P 500 1024.46 -3.51 To be removed, please click here Russell 2000 513.71 +1.15 VOLUME 03: ISSUE 51  CEL-SCI, GlycoGenesys and Thinkpath's Death Spiral. Although there's not much public news popping on CEL-SCI (AMEX: CVM) at the moment, the technical picture looks intriguing. At 70-ish cents, the shares have retraced 50 percent from the low in March 2003 to the high in June. We feel that for risk-oriented investors who want a position prior to news coming out later in the fall, this would be a good level at which to begin establishing--or adding to--positions. A tight stop between 55 cents and 59 cents would be prudent in case the market decides to be uncooperative. 'Sup with our readers? Reader 'FinWiz' appeared in our email bin regarding Wednesday's piece with the following observation: "You open your write-up today by saying that of the three under-performers, ISSX still seems interesting.  Do I take it that you view the other two are no longer interesting?" Au contraire, mon ami-- although there are some caveats. First GlycoGenesys (NASDAQ: GLGS). We were early on GLGS and got stopped out of this interesting biotech not once, but twice. In this case, stops were counter productive as the price seemed to dip to the stop and then rise up--whipsawing those who chose prudence over nail-biting. The chart for the last few weeks tells the tale. The company has some interesting carbohydrate-based cancer therapies and, as well, has just raised $4 million in gross private placement ka-ching to fund human clinical trials for its GLC-100 therapy and for the usual corporate expenses. GLGS volumes have been picking up in the last few days and the swings and roundabouts have been vicious. It's definitely a good trader. Risk tolerant investors would be wise to use the swings to trade in and out to lower their cost base. At this writing, Friday, the shares are trading at $1.10. Seems purchases in the 50-70 cents area and partial sales right around here could yield a decent turn. Might want to hang onto a core position, just in case this news driven company surprises and announces something substantive.  GlycoGenesys has no revenues, is still losing money each quarter (obviously) and has a market cap of $42 million. It's an interesting company but not one for the faint of heart. Management releases very little news, so be vigilant. Spikes--both ways-- are the norm with this little one. Don't bet the farm, but the action dictates a few acres might be fun depending on timing, news and the public's appetite for novel cancer therapies. Move toward the light That's one, FinWiz. Now to the Death Spiral that is Thinkpath (NASDAQ: THTHF). Thinkpath shares are now trading at the absurdly low level of $.002, down over 40% since our recent interview. If the company is doing so well, you might wonder how could it trade so low? The answer is in the financing the company entered into last year. At the end of 2002 ThinkPath was nearly forced into bankruptcy. The company had defaulted on its debts, and was facing extinction. Shareholders would have lost everything, and the company would have closed its doors if they had not raised enough capital to right the ship. However, the cost of that capital is now destroying the value of the stock. Thinkpath raised money the only way it could- through a convertible security. These securities have a feature that allows the holder to convert his/her security into common stock at a discount to the prevailing market, no matter how low the market goes. Therefore, no matter how low the price goes, until the conversion is completed, there is always the possibility someone owns the stock at a discount to the market and can sell at a profit.  These kinds of financing instruments are commonly known as "toxic financing" or "death spirals", due to the fact that the stock continues spiraling down as holders convert and sell. The problem is further exacerbated because as the stock goes lower, the company must continually issue more shares for each conversion. Two days after our August 20th interview with Thinkpath CEO Declan French, the company filed a proxy (http://www.sec.gov/Archives/edgar/data/1070630/000090901203000607/t300525.txt) concerning a number of corporate issues. Included in the filing was the solicitation of a shareholder vote at the AGM on October 2nd to raise the company's authorized shares from the current cap of 800 million to unlimited.  Should all the remaining convertible debentures expiring out until mid-2004 be exercised and converted, the number of outstanding shares will exceed 2 billion. Needless to say, the resolution will likely pass.  If it doesn't, the defeat to the amendment--according to the filing-- "would have a materially adverse effect on the Company's operations and financial condition."  If the shares of THTHF were to sink to say, 1/10 of a cent and the number of shares increased to 2 billion, I would have to guess a reverse split would have to appear at some point. Oddly enough, the market cap at the previous numbers would still only be a bit over $2 million and positive cash flow is expected to continue and even rise over the next few months. If, as we have often surmised, the company can grow revenues --which are to average around $15-$17 million this year and next--there may well be a light at the end of this very long tunnel.  With the excess supply gone, the stock should then be a phenomenal buy. The financiers will have made their money. Management will no doubt restructure its compensation package to adjust for the changing capital structure of the company. While less than ideal for the common shareholders, it's better than closing the doors. The ironic thing is that the Thinkpath fundamentals do look reasonable. Apparently though, with the growing number of shares, no one seems to care. Do we think Thinkpath is a reasonable speculation? Sure. Is there a quick fix? No. What we do know is that five minutes after the AGM and Special Meeting on October 2nd, we should have a modicum of clarity--unless the share resolution doesn't pass.  Stay tuned. I'm sure you'll have comments. 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