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Post# of 87366
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neilhk

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neilhk

Re: None

Tuesday, 09/18/2007 6:39:42 AM

Tuesday, September 18, 2007 6:39:42 AM

Post# of 87366
HCPC: Even Further DD

This builds on my previous DD posts (see links below):

Part 1 looks at what the current value of Insiders and Major Shareholders personal investment in HCPC stands at today and

Part 2 examines how much cash has been raised in 2007 to date by the RegD Share offerings.

Previous posts:

http://investorshub.advfn.com/boards/read_msg.asp?message_id=22942667
http://investorshub.advfn.com/boards/read_msg.asp?message_id=22943308



Part A. Insiders and Major Shareholders: Current value of their investments in HCPC

A. Gwendolyn Carol Johnson = Invested $495, 606 and received 9, 856, 506 shares: Cost basis of $0.0502 pps: Current value based on pps of 0.0006 = $5913.90 Current 'paper' loss: $489, 692.10

B. First Independent Financial Group (FIFG) = Invested $181, 935 and received 6, 500, 000 shares = Cost basis of 0.028 pps: Current value based on pps of 0.0006 = $3900.00 Current 'paper' loss: $178, 035

C. Ed Johnson = Invested $1, 465, 114 and received 38, 546, 383 shares = Revised cost basis of $0.038 pps: Current value based on pps of 0.0006 = $23 127.83 Current 'paper' loss: $ 1, 441, 986.20

Current Cumulative Paper Loss= 2,109,713.3

Note: None of the above insiders or major shareholders have sold a single share to date.



Part B. RegD Share Offering: Finance Raised by Company to Date

We know the company has had a RegD offering and sales of shares are reported in Q1 and Q2 Financials for 2007. Until the company closes their first loans this is the main source of capital at present.

1. The Mazuma Corporation received 33.5 million shares (10 million of which received in Q1, remainder in Q2)
2. TJ Management Group, LLC received 28,200,677 shares (in Q2)

From Financials:

Q1: 10 million shares issued raised $135,000: Cost basis $0.0135 share
Q2: 51,700,677 shares issued raised $205,400: Cost basis $0.00397 share

So company raised $340,400.00 by RegD share offering in first two quarters of 2007.

Q3: This can only be an estimate at this stage. It is almost certain that further RegD shares have been issued in Q3. We will know how many and to whom, when they file the Q3 statement in mid-October. Based on the T trades for this period, used as an indicator of RegD shares issued, it is estimated that the number of RegD shares issued probably does not exceed 200 million maximum, bringing the OS to c. 430 million and Float to c. 277 million. Caution though as this can only be an estimate at this stage.

Estimate: 200 million shares at say $0.001 share raises the company $200k.

So the RegD share offering may have raised the company c.$540k in 2007 to date. This is really in line with their current expenses operating expenses of $700k year.

Summary

1. Insiders and major shareholders are down (on paper) by over $2 million, but have not sold a single share to date.

2. It is estimated that they have issued somewhere in the region of 260 million shares in 2007 to date, through the RegD offering. This has probably raised them somewhere in the region of $0.5 million. This is in line with their annual operating expenses of c.$700k.

3. The RegD shares have hit the market during this period and led to the pps decline. The delay in closing the loans has led to further issue of RegD shares to date. This has also hit their own personal investments in HCPC and other longer term HCPC longs.

The timing of the closure of the first loans will determine what additional finance, if any, the company needs to raise. At present they anticipate loans to close before end 2007.

4. So based on the data available, I see no evidence of anyone in the company or major shareholders making any money to date. Quite the opposite, they are down substantially on paper.

As far as I can see, their only way out is to build the company and make a success of their business plan and in so doing bring the share price back up again.

If they do what they plan to do, they win....and so do we.

GLTA


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