Well, if R2R has not changed your mood, let me try.
With the pending holiday, I thought it worthwhile to raise some points of sober consideration regarding another turkey of a different feather – USFF. But first, a disclosure…I am a long time investor and hold many hundred thousand shares; which I have long ago mentally written off as losses. Still, I have been watching and hoping someone will rescue my investment in ways that were possible before Herda decided to listen to his friend Rob and try to capture a lion’s share of the financial glory with a few cleverless maneuvers. Alas, this combined with the tough economy made lenders reluctant to lend to a little wannabe. And, no matter how much tech innovation has occurred, the type of plant that has been talked about will cost in the ballpark of $250 Million or more. Further, to achieve scale they need more than one plant; all of which raise the question as to what core competencies these people have in the energy industry that would cause a entity to invest such funds?
As it is best to take this in small bites, since it is not very tasty, I may post a few times and answer what questions I can or wish to answer. Before doing so, allow me to offer a combined observation about the “facts” listed on the website.
First, Mr. Bagot refers to developmental activities taking place that include – rail, coal supply, water supply and the permitting process. Well, I hate to address reality, but these things take money. To begin with, permitting is likely to be more than $1 Million and, checking their balance sheet, such funds seem to be a missing asset (their quick ratio is a nightmare). Further, efforts that would establish rail, provide coal suppliers, and customers for product off-take all demand financial agreements that this firm seems to be lacking. Rather than a reflection of reality, this appears to be a statement of hope and, hope is not a strategy. And, speaking about an absence of reality, this includes the letter from Brent Yonts.
Specifically, Mr. Yonts states in his letter of July 26, 2011 that he was “Told by Harry Bagot and others close to the process that a deal is imminent.” I suppose it depends on one’s definition of imminent. But, to my mind, four months and counting is not within the definition. Further, this letter is to Harry Bagot and refers to him in the third person as the individual requesting the letter! Is this not bizarre? And, is it not worse that Yonts indicates it is his “recollection” that the funds supplied through Muhlenberg County exceeds $600,000? Mr. Yonts knows the exact amount because this is money that was never to leave the state – it was to be used for plant development. But, like magic, it has disappeared without any identifiable impact on development. How typical?
The transparency expected of a public company has always been absent. There are reasons for this, none of which are any good. But, that is enough for now. Consider this an appetizer.