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What’s Going to Really Move Genesis Pharmaceutical Enterprises, Inc?
I have a few ideas:
1.News Releases from New Management outlining plans and expectations.
2.Signing up an notable Investment Banking Firm
3.Signing on with a respected PR Firm
4.Release of Q1 Revenue and Earnings by Nov. 15 or Guidance possible beforehand. Are growth rates continuing?
5.Coverage and recommendation by above mentioned IB, or others.
6.Plans revealed for Acquiring additional companies, or announcing such acquisitions.
Did you noticed the new name...Genesis...Enterprises. Maybe the new GTEC will facilitate other Chinese Companies entering the US market through itself. Shareholder meeting expects to authorize 600,000 million shares. That leaves plenty of room for acquisitions...assuming of course the share price appreciates as expected.
All this will take some time. Smart money finds and sticks with value.
It was a Reverse Merger Not a Reverse Split. In the SEC 8K filing it said there will be a shareholder meeting that will decide whether to increase the authorized shares to 600 million...or to affect a reverse split because of the reverse merger. RK
Press Release Source: Genesis Technology Group, Inc.
Laiyang Jiangbo Pharmaceuticals Achieves Public Trading Status Through Merger With Genesis Technology Group
Monday October 1, 6:28 pm ET
BOCA RATON, Fla., Oct. 1, 2007 (PRIME NEWSWIRE) -- Genesis Technology Group, Inc. (OTC BB:GTEC.OB - News) has entered into a reverse merger with a company that owns and controls Laiyang Jiangbo Pharmaceuticals Co., Ltd. (``LJPC'), a Chinese pharmaceutical company. Located in a coastal city in Shandong Province, LJPC underwent an official audit by Moore Stephens Wurth Frazer and Torbet, LLP of Los Angeles, California, in addition to a rigorous due diligence process by Genesis management and consultants.
For its fiscal year ended June 30, 2007, LJPC reported total revenue of $76,000,000; net income of $22,000,000; total assets of $55,000,000; and cash on hand of $17,000,000. Revenues have grown by an average of 187% over the previous two years, and net income has risen by an average of 748% over the same period, based on research by a U.S. consulting firm and merchant bank, which inspected the LJPC facilities in Laiyang City in early September.....
What is the Valuation of Genesis Pharmaceutica Enterprises, Inc?
GTEC has just announced a reverse merger of a profitable Chinese company that earned $22 Million in the last 12 months...and has $17 million cash in the bank. I don't know exactly what numbers you multiply to calculate a companies value...but surely any company must be worth 15-20 times its annual net income. If we do that, we get the following totals:
$22 million times 15 ='s a valuation of $330,000,000
$22 million times 20 ='s a valuation of $440,000,000
$22 Million times 30 ='s a valuation of $660,000,000
On a per share basis that would give us between .83, $1.10 and $1.65 per share.
That's waaaay higher than current share price.....
I think GTEC will see $3-5.00 probably much more before all is done.
PLUS we have a growing profitable pharmeceutical company.
3,000,000 shares have traded in first 11 minutes
GTEC Trading Up Pre-Market
I wasn't sure BB could trade premarket...but Ameritrade Level two is showing increasing bid/ask and recent trades at .329 and .339.
I would love a distribution of GTEC's Shares
GTEC owns a significant percentage (20-25%) of LTUS and SPEH and some others. If those actual shares could be distributed it would be awesome. Why? Because Lotus Pharmeceuticals and Ja Min (Gold Horse) are HUGE in and of themselves. In fact when they completed the private to public process I struggled which made better sense to buy shares of those companies themeselves or to buy GTEC. At this point...GTEC seems to have been the best choice...but the others have solid futures as well. I just may have to plow some of my GTEC profits into those other companies.
Would you have a link to the Euro quote? Thanks eom
Shareholder letter clarification on distribution
In the letter, it states:
"The Genesis Equity Partners, LLC, stock portfolio, the assets earned through GTEC's private-to-public business model, shall exist as a subsidiary of the merged Company, under the direction of an appointee of the previous GTEC Board. This portfolio will be methodically liquidated to cover all remaining expenses incurred by GTEC and GEP, with any dividends to be paid out to only U.S. shareholders in GTEC. More details about this subsidiary will be forthcoming."
So, a cash dividend might be coming to US shareholders. We will have to wait to hear more info.
You are correct about the value attributable on a per share value....my bad.
The reason I've used the 100 million figure is that when the reverse merger was affected...all options and warrants became exercised...I don't know the exact number...but the fully diluted total is higher than 85 million. Also, the 75% to 25% ratio almost requires it. Since the 5.9 million preferred shares are converted at 50:1...which brings us to 299.? Million shares. The other 25% has to be pretty clsoe to 100 million.
Promised Final Shareholder Letter Oct 2, 2007 Posted
http://www.genesis-china.net/
October 1, 2007
Dear Fellow Shareholders:
This will be the final letter that I, as your CEO, write to our Shareholders. After five years of serving in that role, I am honored to turn over this position to Mr. Wubo Cao, founder of Laiyang Jiangbo Pharmaceuticals Co., Ltd. ("LJPC"), one of China's most dynamic and fastest growing pharmaceutical enterprises.
As the "crowning achievement" of Genesis management, your company has officially merged with LJPC, and effectively the Chinese company will guide the merged Company's future. This action was taken after years of seeking a suitable partner and numerous failed attempts. But such delays proved propitious for our Shareholders, as no former candidate came close to the power and potential of LJPC.
Before listing the accolades of LJPC and what the future might hold, I want to explain the structure, the history of the merger, and what present and future Shareholders might expect.
Structure of the Merger
Upon final completion of the merger, signified by the upcoming filing of the commonly called "Super 8K", present GTEC shareholders will own 25% and LJPC will own 75% of the merged entity to be known as Genesis Pharmaceutical Enterprises, Inc. For the time being, the stock symbol (GTEC) shall remain the same.
Past GTEC officers-CEO Gary L. Wolfson, CFO Adam Wasserman, and President Kenneth Clinton-have resigned, being replaced by LJPC management, led by Chairman/CEO Wubo Cao and Chief Financial Officer Elsa Sung. Board Directors Dr. Shaohua Tan and Messrs. Wolfson and Clinton have also been replaced by LJPC appointees, although Independent Directors Robert D. Cain and Rodrigo Arboleda remain on the new Board of Directors.
The Genesis Equity Partners, LLC, stock portfolio, the assets earned through GTEC's private-to-public business model, shall exist as a subsidiary of the merged Company, under the direction of an appointee of the previous GTEC Board. This portfolio will be methodically liquidated to cover all remaining expenses incurred by GTEC and GEP, with any dividends to be paid out to only U.S. shareholders in GTEC. More details about this subsidiary will be forthcoming.
History of the Merger
In May 2007, GTEC announced the signing of an agreement with LJPC, but the actual final decision to pursue the merger strategy did not occur until site visits by Dr. Shaohua Tan and Mr. Wolfson in June. LJPC had been sourced, screened and cultivated by Dr. Tan, who has headed the China operations since October 2005, with pronounced success. Completing a rigorous and extensive due diligence process, GTEC concluded that LJPC was an ideal merger partner. The strength and potential of LJPC, augmented by superior leadership and history, were the deciding factors. On the advice of counsel and because the merger contract could be cancelled at any time during the process, Genesis management and directors were committed to total confidentiality and secrecy until the merger was officially completed on Monday, October 1, 2007.
Because of the size and scope of LJPC, Genesis engaged Moore Stephens Wurth Frazer and Torbet, LLP ("MSWFT") of Los Angeles, California, as the auditor. AllBright Law Firm of Shanghai and Richardson Patel Law Firm of L.A. served as LJPC's counsel; while Schneider Weinberger Beilly, corporate counsel for Genesis since its inception, served GTEC.
On July 1, 2007, the CSRS, China's equivalent to the U.S. Securities & Exchange Commission, imposed Regulation No. 106, which ostensibly required new and complicated government approvals on any mergers with U.S. public companies. This regulation apparently has been viewed, by U.S. financial experts, as a serious obstacle in completing such mergers, as the Chinese government has a history of acting unevenly and slowly in granting such approvals. Yet, when confronted with the challenge and with Mr. Cao's leadership, LJPC became only the second company in the entire country to obtain "Regulation No. 106 approval", and thus joined an elite group to complete a merger in the U.S.
In early September 2007, Dr. Tan, Mr. Wolfson and a U.S. financial advisor returned to LJPC, located in the coastal city of Laiyang, Shandong Province. Over a period of days, the final steps to completing the merger were devised. Upon returning to the U.S., Mr. Wolfson called for a Board of Directors meeting, which resulted in unanimous approval of the final merger transaction.
The merger between Laiyang Jiangbo Pharmaceuticals Co., Ltd and Genesis Technology Group, Inc. occurred officially on Monday, October 1, 2007, creating Genesis Pharmaceuticals Enterprises, Inc. (OTCBB: GTEC).
Profile of LJPC
For its fiscal year ended June 30, 2007, LJPC reported total revenue of $76,000,000; net income of $22,000,000; total assets of $55,000,000; and cash on hand of $17,000,000. Revenues have grown by an average of 187% over the previous two years, and net income has risen by an average of 748% over the same period, based on research by a U.S. consulting firm and merchant bank, which inspected the LJPC facilities in Laiyang City in September.
LJPC's fiscal years, as audited by MSWFT, run from July 1st to June 30th of each calendar year. Moore Stephens will serve as GTEC's auditor going forward.
An independent U.S. financial advisor accompanied Dr. Tan and Mr. Wolfson to LJPC last month and provided the following information:
Laiyang Jiangbo Pharmaceuticals was established in July 2003 and is a medium-sized pharmaceutical company that is currently producing and selling five (5) Government approved drugs with several in the pipeline awaiting final approval. The company is located in Northeast China in an Economic Development Zone, Laiyang City, Shandong Province.
The company has 440 full time sales representatives and 620 part time representatives located in all major commerce areas across China
The company has numerous GMP (Chinese State Drug Administration - SDA) approved manufacturing facilities and production lines and is approved to produce tablets, capsules and granules. In 2007, LJPC produced 300 million tablets, 50 million bags of granule and 50 million capsules. Company's top four products include Clarithromycin sustained-release tablets, Itopride Hydrochloride granules, Ciprofloxacin Hydrochloride tablets, and Paracetamol tablets.
The Future of GTEC
GTEC has become a pharmaceutical company, with a subsidiary that holds the stock earned during its previous private-to-public business model. That stock will be liquidated, over a period of time, and the resulting cash will be utilized to cover existing and ongoing expenses related to the program, with the remaining cash, if any, to be distributed as a dividend to its U.S. shareholders. Upon liquidation, the subsidiary will be dissolved no later than 12 months hence.
The future of Genesis Pharmaceutical Enterprises, Inc. (OTCBB: GTEC) shall be determined by Mr. Wubo Cao, his experienced staff and Board of Directors. In the near future, Mr. Cao will reveal the plans for the Company's future. A new website is under construction and should debut soon.
After five years of serving your Company and 15 years of working in China, I am gratified that we have succeeded in reaching our allusive goal. To call the merger the "crowning achievement" of management is no exaggeration. My own contribution in attaining this reward is only a small part of the huge effort and remarkable achievements of numerous professionals, including:
Dr. Shaohua (Joshua) Tan, whose leadership in China, revolutionized the Company. Dr. Tan, with whom I have worked closely for nine years, is a man of unsurpassed ability and integrity. With his energy and optimism, Dr. Tan infected the entire Company and its support teams with enthusiasm and confidence. Nurturing his network that took decades to build, no one is more effective or influential in Chinese business than Joshua Tan.
Kenneth Clinton, who revamped the Company's management beginning in July 2002, and focused operations on the profitable private-to-public program. Ken never gave up on Genesis, even during the darkest periods when the future was uncertain and problems seemed insurmountable.
Adam Wasserman, who served as a tireless and effective Chief Financial Officer, from the inception of the Company. Adam is among the most respected and popular professionals working with Chinese companies. In addition to his expertise, Adam's humility and sincerity resonant with the Chinese.
Jim Schneider, whose guidance as Corporate Counsel proved invaluable. No one speaks with more knowledge or authority in the public market sector. To complete the merger, Schneider Weinberger and Beilly worked closely with Richardson & Patel and AllBright Law Firms in a cooperative effort that resulted in a smooth and effective transition. The lawyers in all three firms are to be commended.
Steve Sherb, whose firm Sherb & Company served as auditor for the Company from its inception through 2007. Sherb has expertise in working with Chinese companies, and this is no minor achievement. Someone told me that your auditor is more like a spouse than any other professional relationship, and I urge the old adage of "never go to bed angry" should apply to both marriages and auditors. In reality, Sherb & Co. seriously protects the Shareholders and meticulously abides by the arcane regulations of the S.E.C.
Robert D. Cain and Rodrigo Arboleda, who remain as Directors of the merged Company, who never wavered in their dedication to serve all Shareholders. Their credentials, experience and guidance proved of great value in the past year, as the merger strategy crystallized.
Gregory Wolfson, my son who worked in the Shanghai operation during the most contentious and difficult period in the Company's history. Greg has moved on to other challenges, but without his devotion and steadfastness, Genesis may not have been able to reach its success today.
A long list of professionals, both in the U.S. and China, who have performed remarkably with countless challenges from a foreign government and in an economy that has boggled the minds of experts throughout the world.
And most of all, to our Shareholders, who have exhibited great patience and confidence during times that were often difficult and uncertain. We have always been sincerely dedicated to our Shareholders, and we offer our heartfelt appreciation for your loyalty over the years.
Two more groups deserve special recognition, although not as part of the Genesis family, per se. I must express my deep and abiding gratitude to the Chinese people. Since October 1992, they-and their remarkable country-have dominated my life. I have said repeatedly that China has supported my family continuously for the past 15 years, and I cannot put into words what an astonishing experience this has been. The Chinese people are like people everywhere. They want to make the future better for their children. Generally, politics and the vagaries of governments are of little interest to the average Chinese. Yet, they are different from Westerners, to be sure. They view the whole as being more important than its parts, while we have an unshakeable dedication to focusing on the individual. As Rob Gifford observes in his new book China Road, the best book ever written on contemporary China, countries like France have implemented the 35-hour work week, which is often only two days of labor for many Chinese. The Chinese believe that the future is theirs, and the optimism of that country is unmatched in the world today. If you have not visited China, I urge you to witness the dynamo of the 21st century, and, most of all, enjoy some of the most energetic and friendly people on the entire planet.
The second group, and most important to me, is my own family who persevered during very difficult times, especially during my early years in China. Their understanding, faith and encouragement are the only reasons that I could have survived, persisted and reached this final destination.
With sincere gratitude, 谢谢!
Gary L. Wolfson
No problem.
What is the Valuation of Genesis Pharmaceutica Enterprises, Inc?
GTEC has just announced a reverse merger of a profitable Chinese company that earned $22 Million in the last 12 months...and has $17 million cash in the bank. I don't know exactly what numbers you multiply to calculate a companies value...but surely any company must be worth 15-20 times its annual net income. If we do that, we get the following totals:
$22 million times 15 ='s a valuation of $330,000,000
$22 million times 20 ='s a valuation of $440,000,000
$22 Million times 30 ='s a valuation of $660,000,000
On a per share basis that would give us between .83, $1.10 and $1.65 per share.
That's waaaay higher than current share price.....
PLUS GTEC's prior assets will be distributed to GTEC shareholders. Their book value was $7.6 million in last 10Q. With 100,000,000 shares to distribute the assets to, that comes out to 76 cents per share. NOTICE, the valuations they used were minimal not even current market prices. Current market price would put the value of this distribution at buck or two. Scary good.
I think GTEC will see $3-5.00 probably much more before all is done.
PLUS we have a growing profitable pharmeceutical company.
I just can't see selling too many of my shares until this distribution is made.
Food for Thought.....
I think the distribution of shares of GTEC's portfolio companies (LTUS, SPEH, et.al.)----which is part of the exchange agreement, will be worth 50 cents per share!!!!!
I haven't worked out all the numbers....but that's what it looks like to me.
Part of it depends what happens to the shares in the Genesis Partners LLC, which is 51% owned by GTEC.
A Few More Details
1. GTEC becomes Laiyang Jiangbo Pharmaceuticals.
2. Of the new entity former GTEC's shareholders own 25%. Before the acquisition, GTEC had a public float of 72 Million shares. No doubt many of these will learn about the acquisition and will be able to see the value of new company. It makes more sense to be a buyer at this point than a seller.
3. According to today's SEC Filing ( http://biz.yahoo.com/e/071002/gtec.ob8-k.html ) Shareholders of GTEC will receive a distribution of GTEC's Pre-acquisition assets...which included LTUS and SPEH which are profitable companies (and a few others) of which GTEC owned I think 25% of. I posted on this list and RB that I their shares alone should value GTEC between .26 and .53 depending which PE ratio you use, 15-30. I posted it on Yahoo and RB but can't find the Yahoo one... here's a link to the RB
http://ragingbull.quote.com/mboard/boards.cgi?board=GTEC&read=9840
As I recall I didnt' quite have the OS right...but it was pretty close...within pennies.
4. In time the market will realize the intrinsic value being dealt with. It is the valuation (revenue, earnings, cash) that will prevail.
For the details...my working them anyway...check out post #242 and #243. I think my reasoning is sound....However, post merger OS will be in the neighborhood of 385 Million shares. So do your division of Net and cash from their. My initial projections were forgetting added dilution of options/warrants and such. Randy
I relly like ZANE....but this morning I sold out my position to acquire more shares of GTEC. I am hoping that I will be able to buy more shares of ZANE when this thing is done running...which isn't going to be for a while. See my IHUB posts.
That is true for the public float. The acquisition was made with (I think 5.9 million shares of) Preferred stock that will convert to common at a rate of 50 to 1. Randy
BUY 5000 SHARE BLOCKS WHILE YOU CAN
Under 50 cents market makers have to quote at least 5000 share blocks....After this stock passes 50 cents it goes down to 2500 share units. After it goes over $1.00 tehy only have to quote 500 share units. Worth noting. Especially if you are already short!!!!
The only correction...from reading the latest filing is the dilution that will take place by all options/warrants being exercised....
Instead of appr. 340Million....in todays shares...teh number will be closer to 385 Million....but the valuation stays pretty close.
One small correction.. ...
In my PE calculations. ...I used the cash on hand instead of the net income to get .05 per share. Actual earnings per share would be .067...so projected values for PE's of 20 and 30 would be: $1.34 to $2.01.
Also, moneycentral had the story on the front of their newscenter page.
http://news. moneycentral. msn.com/newscent er/newscenter. aspx
I'm still excited. If my valuation is off, let me know.
Randy
GTEC Acquires Laiyang Jiangbo Pharmaceuticals
Here's the link:
http://biz.yahoo.com/pz/071001/127782.html
Here's what I think it means:
This evening at 6:28 PM GTEC announced an amazing reverse
merger with a chinese pharmaceutical company, Laiyang Jiangbo
Pharmeceuticals. , This company is a monster....Audited June 07
financials show revenues of $77,000,000 with Net of $22,000,000.
I've run the numbers and with issuing of 255 million shares...to make
the proportions work out... 75%/25% (which will no doubt be reversed
split to something more managable) there is still profit of .05 per
share.
According to the PR The company is growing at an insanely rate....
198% revenue over the last two years..... and 748% growth on the net
profit side during the same time period.
Running a trailing PE ratio of 20-30 that makes each of these shares
fairly valued...at least from my perspective. ..worth $1.00-1.50.. .
without any future growth.
The company has a bright future from here. Heck...if this company's
revenue and earnings grow at only 50% (almost half of the last two
years) earnings would double to almost 10 cents per share. If you
project a PE ratio 20-30 on those earnings you're looking at a easy
$2-3.00 stock in the next year.
PLUS GTEC has a bunch of shares from the profitable companies it has
already brought through its public to private process.
Some pretty substantial block trades today.... (RB post)
I don't know if any others were watching...but this afternoon there was a series of block trades at .075 that were pretty encouraging.
There was one for 25K, then one for 49K and shortly after this another for just under 100K. Hopefully, someone is finally buying out whoever has been selling at these levels. My theory is that some previous shareholder from the prior shell has been just looking at this as an opportunity for liquidity and has decided to liquidate his/her position. I hoped it was just a matter of time before someone would go buy up however many shares they were hoping to sell. .075 is better than .06. Granted I think we will see some pretty serious upside in the next months...but if they're going to sell I'd rather clean up their positions down here than at a quarter.
Now if we get some revenue projections in the next week or two...lets say...over 6 million we should be encouraged that all is going well.
Does anyone remember even reading about internet sales in the Dutton Report. I don't...at least not directly. Go DRGP!
This and last post were posted at Raging Bull a while back....
Well, I was just doing some research the other tonight on the old SEC filings...and saw a new filing by Barron partnership dated earlier in September:
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5438847&Type=HTML
It says that they disposed of their 11,500,000 shares. This poses a fairly interesting question. From what I can tell (from old filings), they paid around 25 cents per share or between at 2 to 3 million dollars for those shares.
Question? Who did they dispose them to and why?
Potentially good: Someone wanted to acquire those shares and purchased them from them.
Potentially bad: They deemed them virtually worthless and disposed of them to clean up their portfolio. Who knows?
That's about all I have.
Hello,
I've been able to dig some stuff up on the internet. What I've done is search for enucleus 2007 and then variables like India and Singapore. What I've found?
1. In April one of their debt holders Barron Partnership reported an increase in their share ownership (presumably in lieu of debt?)
2. Their Applitech subsidiary Tendercity.com did a relaunch in June.
3. In Singapore enucleus has started placing quite a number of employment ads in the first part of August.
I'm not sure just what it means...but they seem to be reorganizing and restructuring like they said. I'd love to hear some official news from them. I guess we will have to wait and see.
Hey ProfitScout....that was a pretty good observation.....
However, that comment has been in the press releases since May. The announcement being spoken about was probably the June 20 Release about the expanded marketing areas of Procede. Unfortunately, for some reason that press release doesn't show up in recent or older news. Best regards. Randy
What is the relationship between ZANE and Oracle?
I understand that Zane targets users of Oracle software...but is there more?
Excerpts from Q2 Earnings Conference Call
(I posted this on Yahoo Message Board the other day)
I was looking over the SEC filings and noticed that the full text of the Q2 Earnings Conference call was posted. I listened in to the call live and after re-reading it I am as pumped as ever about the future prospects of Zanett.
If you're investing in Zanett because you see its prospects for growth and profitability (and thus appreciation) in the next year or so...this is an incredible opportunity to buy a quality low priced stock.
Below is a link to the SEC Filing. Give it a read for yourself:
http://yahoo.brand.edgar-online.com/fetc...
Here are a few excerpts that caught my attention:
REVENUE
"...we had record revenue and we have continued to set up our infrastructure for future profitable growth."
GROWTH AND ACQUISITIONS
"For the six months, we saw revenue grow to $24.5 million, right on track to our $50 million run rate that we have talked about earlier this year, right on track. In terms of our feature M&A opportunities, we continue to aggressively seek out additional M&A targets to compliment our strong organic growth."
EXPENSE CUTTING
"It's important to note, corporate expenses continued to decrease. These decreases are a result of the expense measures we put in place in early 2006. As we mentioned before, we set out to cut our expenses from our corporate operating model in 2006 and we did so, saving over 700,000 annualized. Late in quarter two we identified more savings, which will then annualized will save more than 200,000 in corporate expenses annually."
INVESTING IN GROWTH
"It's important to note that we have invested an additional 500,000 in selling and marketing expenses this year, as compared to last year. These additional costs represent our commitment to growth. Some of these growth drivers will not significantly influence our revenue stream until future quarters, but we believe in order to gain market share that these street on the feet are necessary to fuel future growth."
FUTURE ACQUISITIONS
"Our deals pipeline remains very strong. Again we are in active discussions with firms that are, in total have about $250 million of aggregate revenues. Our gross pipeline of firms is north of $500 million. I'm quite hopeful that we'll get two or maybe three more deals done in 2007."
FUTURE PROFITABILITY
"In summary, despite the uncertainty surrounding future technology projects and programs created by the war effort, we're very bullish on Paragon's organic growth prospects for later this year and expect these initiatives to pay off handsomely."
DEBT VS. DILUTION
"We continue to focus not only on operations, but on balance sheet management. In fact this past week we have just gotten notice that we've become effective with our debt only registration statement for our notes, which will help lower our cost of capital and also raise money for future acquisitions. We're very happy about that."
One more comment (from rjklynsma)
The other choice to debt is dilution. Right now there's a float of less than 5 million shares. Just think how many more shares there would be if $19.2 million debt would be diluted shares. As a shareholder I'd take debt at 12-15% any day compared to dilution. IMO, if they want to do a capital raise to pay off debt...they will do it at substantially higher price levels. At which level, I am quite confident, we will all be quite profitable!
Good night.
Disappointed with DRGP? Why stock will soon appreciate!
I've been a buyer of DRGP for the last month or so. Fortunately for me I started buy when the stock was aleady under a dime. BUT as they say...if you liked the stock at higher levels .20-30, you have to love it at these levels. I think it makes better sense to average down than sell at current levels. Here's why:
1. From the 10Q as someone referenced below, their sales for July were $1,649,000 for just two products Procede and Clean Between Machine. If you multiply this by 3 months for 3Q you get $4,947,000 (for just those two products...not adding NASCAR...or any of their other products. Plus you'd think there'd be some sales to report from their international sales...which may be included in the $1,649,000. I'm inclined to think we will certainly see revenues between $5 and $6 Million, and probably a bit higher.
2. Annulized Revenue: this would place us at an annualized run rate of $20-23 Million for the year. Here's my math: In the last four Quarters Revenue was $15 Million. I think we can reasonably expect Q3 Rev. to be between $5 and $6 Million. Using the same factors Q4 would then be between $6.1 adn 7.1 Million. That would give us revenues for the year between $18.9 and $20.9.
3. Anticipation of just what these numbers might be will bring the stock price up as we finish the quarter and await some guidance. ALTHOUGH management missed big time with the anticipated profitability comment last July/August.
4. If we hear about a financing on reasonable terms I think we see the substantially higher revenue (and thus stock price) that was projected in the Dutton Report. In fact, being a bit of a conspiracy theorist, I don't doubt the current stock price is closely related to some "one" or some entity trying to get their terms for additional funding. But who knows.
5. There was one comment in particular in the Dutton Report that I liked: "While the Company had planned to raise approximately $3 million in equity capital this year, but management thus far has not liked the terms; it believes that it should require no more external funding with internal cash flows financing the projects." That means the company can grow and pay for its own growth if it has to!!!!! Additional financing would only be icing on the cake.
Oh well, enough for now.