Supurva Healthcare Group Inc (SPRV): Wtctexas, with WRNW & its Valuation......

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Sunday, 10/28/2007 2:24:23 PM

Sunday, October 28, 2007 2:24:23 PM

Wtctexas, with WRNW & its Valuation...

Thanks for posting WRNW as it looks very promising if they close everything as publicly announced. Heck, if for not your mention of it in here, I would have completely never even heard of WRNW.

You say WRNW is worth at least .005 per share, but from that last deal, they are worth about .0072 per share from doing some quick math in my opinion. This is not considering if they have closed any other deals, mergers, etc. that might be going on. From considering their mergers/deals that have been on the table for closing, as some already have their audits completed, WRNW would be worth and trading much higher. I’ll explain how further.

It looks darn good from doing some quick research, but I do see how there might be a little reservation until a little more is confirmed. Here’s what I have so far.

Before we explain the derivation of some WRNW Fundamental Valuation, let’s first consider some key people’s credentials. I like the fact that their CEO and CFO both have some awesome achievements that are very legitimate and should not go ignored:

David Rees, the WRNW CEO, has achieved the following below as being an Advisor…
** Advisor for Lyondell with annual Revenues of more than $20.9 Billion and $16 Billion in Assets and trades on the NYSE at $47.25 per share under the ticker of LYO.
http://www.lyondell.com/Lyondell

** Advisor for Potomac Energy a major research project to develop an electrical generator that only requires liquid nitrogen to operate.
http://peswiki.com/index.php/Directory:Potomac_Energy_Projects,_LLC

** Advisor for Entergy which has annual revenues of over $10 billion and approximately 14,500 employees and trades on the NYSE at $118.97 per share under the ticker ETR.
http://www.entergy.com/
**** In 2007, Entergy was named to the Forbes list of America’s Most Trustworthy Companies.
**** Entergy was the only electric utility to make that list from 8,000 public companies.
**** Entergy is the only U.S. utility to make the Dow Jones Sustainability Index 5 years in a row.

** David Rees affiliation with these companies mentioned above alone is a huge show of confidence for investors to believe in the direction he will be taking us.

** And something very important for WRNW… David Rees has specialized in mergers and acquisitions as well as structured financing.

Ok, so I’m convinced that WRNW shareholders are in good hands. That’s enough good to outweigh any bad that I can think of for my personal risk meter; to each its own.

Harry Martin, the WRNW CFO, has achieved the following below…
** Managed the accounting department of a $500 million division of CBS.
** Vice President and General Manager of a division of Hanson Industries.
** Controller of a $100 million subsidiary of Kaiser Industries.
** Was a Captain in the Air Force (So you know I love that part!) and during his tour of duty was responsible for four audit offices in Turkey.
** Holds a BBA degree in accounting and finance and an MBA in finance.

Ok, I’m convinced that we are in good hands here too.

Initially I thought this deal was some kind of shares exchange of nothing being exchanged for nothing. I think the clue light might have clicked on a bit after going back and researching a bit further.

I might be wrong and I hate to say it like this for DVFI shareholders, but it looks like WRNW is going to use DVFI to dilute to raise capital to keep from diluting WRNW. That’s good for WRNW shareholders, but bad for DVFI shareholders for the short term… maybe.

I do see how as high as WRNW goes, later, DVFI could be reverse merged into WRNW on a 1 for 1 basis to bring immediate valuation back into DVFI and out of the grey sheets after the fact since WRNW has an Outstanding Shares (OS) count of 800 Million shares which matches DVFI Authorized Shares (AS) count of 800 Million shares. Also, since they transferred over the entire TEAM of WRNM to be the new management for DVFI, they will have a vested interest in the success of both companies.

It’s actually a good plan for the growth of both stocks, especially since it appears that the audits are done for some of the mergers. Here’s what I have concluded as far as valuation given the closing of the mergers mentioned in their LOIs.

PR for merger with Team Services LLC
Friday May 18, 9:45 am ET
http://biz.yahoo.com/pz/070518/119827.html
** $14 Million in Revenues.
** Approximately $4 Million of that $14 Million to be Income.

PR for merger with Cementers Well Service, Inc.
Thursday May 3, 9:45 am ET
http://biz.yahoo.com/pz/070503/118744.html
** Annual Income of $3,000,000 from Revenues.
** If I had to guess, considering that $3 Million is the 25% standard Profit margin from the Revenues, then that would make the Revenues to be in the amount of $12 Million.

PRs for merger with Midwest-Based Oil and Gas Cementing Company
Tuesday May 29, 11:13 am ET
http://biz.yahoo.com/pz/070529/120409.html
** Annual revenues are in excess of $8 Million, with net margins of over 30%.
** 30% = $8,000,000 x .30 = $2,400,000
** This company's operations are modeled after Halliburton, where most of the senior management was trained.
http://biz.yahoo.com/pz/070503/118744.html

Current WRNW Market Cap is:

800,000,000 Outstanding Shares (OS) x .0006 = $480,000

This is significantly undervalued in my opinion given its recent deals closed and pending. If all of the deals close, the new Market Cap from Revenues would reflect below:

$14M + $12M + $8M = $34 Million

800,000,000 x X = $34,000,000
X = $34,000,000 ÷ 800,000,000
X = 0.0425 Per Share

Now that’s just from the Market Capital Analysis. The total anticipated Income to come from the Revenues of those deals to derive an Earnings Per Share (EPS) is below:

$4M + $3M + $2.4M = $9.4 Million

$9,400,000 ÷ 800,000,000 = .011 EPS

Now let’s consider a “conservative PE Ratio” of 12 for the growth rate for its Industry and Sector that it trades within:

12 PE Ratio x .011 = .132 Per Share

Now the above prices are Fundamental Valuations as to where WRNW should trade given the closure of the merger deals that are already on the table, of which some have already had their audits completed. That is the risk in which why we are here deciding to take.

I’m guessing that it would be fair to not expect any kind of dilution from WRNW since they are expecting to close the deal for $1.8 Million with USA Superior Energy, Inc. which trades at .85 per share as USSU on the OTCBB as indicated in the PR below and since the due diligence process has already begun:
http://biz.yahoo.com/pz/070808/124527.html

Also, when you have audits on file as completed with other audits submitted pending closure with the SEC, the share structure must remain in tact from the due diligence procedures involved with the SEC.

For these reasons above, I think WRNW is safe from any kind of dilution or increase in the OS.

With considering all of the above, WRNW and DFVI might have had some skeletons in their closet if I had to guess which is what contributed to them getting down to these levels. I have just come to simply expect that with every pink sheets stock in the market (LOL). That’s why we should be glad that such is the case as we might not have given WRNW any attention if it were already trading in the pennies after all of these things had transpired. Level II looks very strong from the bottom up at the “Ask” with WRNW as the pennies really don’t look too far away.

I and anyone else do not know where WNRW is going for fact or how much it’s actually worth, but .0006 per share seems like a steal at these levels given all of the coals they have in the fire. I think WRNW is still on the ground floor as an existing opportunity for many to take the risk for some potential rewards. I think it’s worth picking up a couple million shares. Thanks again for bringing it to the forum.

v/r
Sterling

Sterling's Trading & Investing Strategies:
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