When will ENHD begin trading......hopefully very soon..
Good question and this is when many of us feel SIVC will garner the recognition and attention they deserve. ENHD just earned 67 cents per share. A china growth stock trading at a multiple of 30 would put ENHD shares at $20
SIVC owns 428,000 shares of ENHD that would make SIVC's shares worth over 8 million dollars.
That's only one of 4 deals per year SIVC has on their plate.
Now let's follow the ENHD play through step by step.
Prior to the reverse merger ENHD did two reverse splits virtually wiping out the float. Total shares OS reduced to 423,000 shares. That's why ENHD bid/ask is $5 on the bid $325 on the ask.
ENHD
Reverse Stock Splits
In 2007, we conducted two reverse stock splits:
(1) Effective August 20, 2007, the Company conducted a 1-for-7 reverse stock split in its issued and outstanding shares of common stock which reduced the number of the Company’s issued and outstanding shares of capital stock from 13,496,472 shares of common stock to approximately 1,943,812 post-split shares of common stock.
(2) Effective December 14, 2007, prior to our reverse acquisition and financing transaction that was consummated on December 31, 2007, we conducted a 1-for-4.6 reverse split of our common stock.As a result of the reverse split, the number of shares of the Company’s common stock issued and outstanding was reduced to 422,756. Commencing on December 14, 2007, the OTC Bulletin Board began quoting our common stock under the symbol ENHD.OB.
The next step is Barry Kitts and his China Pinnacle Fund
put up 17 million dollars
Institutional and accredited investors participated in a $17.0 million private placement with Energroup Holdings Corporation, paying $4.40 per share.
Now Barry Kitts, Hunter Wise and Roth Capital bring in mutual funds to take a position in ENHD. In order to do this ENHD has to file an S-1 registration statement in order to turn their shares into free trading shares.
From ENHD 10k
On February 11, 2008, we filed a registration statement on Form S-1 in order to register, for resale by selling shareholders, up to 7,727,271 shares of our common stock. On March 7, 2008, we received a letter from the staff of the Securities and Exchange Commission with comments on our initial Form S-1 filing. As of the date of this report, we are in the process of responding to the comments from the staff, and preparing an amendment to the S-1 registration statement.
This is perfectly normal all registration statements get comments from the SEC. What comments are things like
You say you are the largest pork producer in China please include proof of this.
Sometimes they just ask you to add a foot note to your financials.
The company then files an ammended S1 making the corrections the SEC asked for.
Mythbuster got an email from ENHD IR that said they hoped to be trading by the end of this month.
Key points
1) There are two types of reverse mergers....The ones where a company goes out and buys a shell on their own, reverse merges into the shell and begins trading. Then they go out and try and raise money. These are weak deals.
2) The second type of reverse merger the company merges into a shell and simultaneously they do a PIPE financing and raise 10-50 million dollars at the same time. Now you have a fully funded public company with tons of cash on their books.
2b) This is the type of deals SIVC/Hunter wise put together....fully funded China Reverse mergers.
2c) Big money players are very selective who they give 17 million dollars to. Hunter Wise thought they would have to do a road show to raise the 17 million dollars for ENHD. Barry Kitts took one look at the deal and said I'll take the whole thing. Here's 17 million dollars. Barry Kitts had a great eye for value look at these numbers.
Energroup Holdings Corporation reported that revenues for the year ended December 31, 2007 totaled $124.7 million, a 77% increase over the $70.4 million reported in 2006, which was driven by an increase in the average per-kilogram price customers paid coupled by an increase in overall sales volume. All of Chuming's revenues are realized from sales within China, and approximately 78% of its revenues were from fresh pork, 7% from frozen pork, and 15% from processed meats (approximately 2% of which is from seafood products). Each of Chuming's product categories reported significant year-over-year growth. More specifically, fresh pork sales increased 112%, frozen pork sales increased 22%, and processed meat and meat by-products increased 6.3%. Within the processed meats category, sales of Chuming's new processed seafood products that were launched toward the end of 2005, increased 130% as compared to the prior year. Additionally, Chuming began selling its products to over 170 new franchise operators.
Gross profit for 2007 was $20.3 million, representing a 61% increase from the $12.6 million reported in 2006. Overall, gross margins were 16.3% in 2007, compared to 17.9% in 2006. Total operating expenses for 2007 were $6.2 million versus $2.9 million for 2006 and the increase was directly attributed to the addition of new sales and marketing staff, plus advertising and promotional expenses, including television, radio and magazine placements, as part of an overall strategy to support Chuming's brand positioning in the over 3,600 retail locations that its products are sold through. In 2007, Chuming significantly increased its advertising budget from $150,000 in 2006 to $3.8 million in 2007. Total operating expenses for 2007 were 5.1% of sales versus 4.0% for 2006.
Operating income increased 70% to $14.1 million in 2007 versus $9.7 million for 2006, while operating margins were 11.3% compared to 13.8%.
After tax net income for 2007 increased 44% year-over-year to $11.7 million from $8.1 million and earnings per diluted share were $0.67 in 2007 as compared with $0.47 per share in the prior year, based upon 17.3 million shares outstanding.
3) You notice how they did two Reverse splits on ENHD before the merger. The beauty of SIVC is they receive shares after the reverse split. Redwood Capital was issued 428,095 shares of Energroup Holdings Corporation as the equity portion of its payment for provided advisory services for the transaction.
3b) The most beautiful part is SIVC will dividend out a portion of these shares to shareholders.
