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Probably connected to further RegD shares they issued to raise finance for running costs hitting the market.....they are trying to work towards loan closings which will bring them revs, but until then they need finance for operations.
GLTA
http://investorshub.advfn.com/boards/read_msg.asp?message_id=22409456
This is the pr the post referred to. They also mailed it out to shareholders.
GLTA
Agreed. Just hope they can get that first deal closed soon.....for all our sakes...when they do this will fly imo.
Just hanging on here to the positives they mentioned in the shareholders letter last week, which are...... they hope by year end to:
1. Close $740 million in loans: Which would earn them $35 million + $234k month revenue for the 35 year period of servicing the loans.
2. Uplist to OTCQX.
3. Share buyback to have commenced.
4. Also new Directors to have been appointed (not mentioned in the letter but expected at shareholders meeting of October 18th)
We are into September now. Third quarter ends September 30th. Then just three months to year end.
I repeat the quote from the end of the shareholders letter,
"I am pleased about the significant opportunities that we hope to announce shortly. As we do, I believe the patience and support you have shown in Heritage will be rewarded. I look forward to sharing new developments with you in the near future."
Well if they are to achieve the above-mentioned goals in that timeframe, I think we should be hearing something soon imo.
GLTA
bsandy: No probs. What I was inferring by that comment is that we know they have needed to issue a lot of shares to raise finance before loan closing. The OS will have increased above and beyond the last known level of 231.5 million. The float will have increased too. Exactly how many shares have been issued is not known at present.
As and when the loans close they will have cash at their disposal. You correctly stated the fact that a $1 million or two could buyback a lot of shares. They could use that to buy back shares based on the current share structure/ price.
We also know they have plans to uplist onto the OTCQX, as they have stated previously and repeated again in the shareholders letter last week. They want to do this by year end. Another option open to them then could be a reverse split to reduce the OS shares/ float, but also to combine it with a share buyback. The reverse split would reduce the share numbers immediately and increase the price. If supported by a share buyback by the company the value should be maintained and increase. In that sense a reverse split would be neutral to us imo.
This is just a thought and not based on any info I have heard from any other source. If they are looking to uplist and gain credibilty they may look at this as one option to increase and support shareprice quickly to encourage new investors, whilst bringing the share structure back in line with a company with their aspirations.....not one of a typical pink sheet stock. Time will tell of course.
GLTA
The shareholders letter last week offered a lot of positives for what could happen prior to the end of the year. When I read it the potential here still excites me....countering that excitement is what has happened with regard to the shareprice and probable dilution this week, which is is hard for all us longs here who have been in this for a while.......
But it seem that they have needed to raise more finance to continue. The question then is have they got sufficient finance to get to deal #1 without the need for a reverse split? Once the first deals hit we know they will have capital at their disposal. We also know that they plan a share buyback........and agree, $1 million or two could buy back a lot at these prices......they may also take other action to revise the share structure post loan deals, to bring it in line with the next stage of their development. Only time will tell.
The shareholders letter gave us lots of positives to look forward too. Two statements stand out for me:
"Management believes it can deliver more than $740 million in projects for funding before year-end."
"I am pleased about the significant opportunities that we hope to announce shortly. As we do, I believe the patience and support you have shown in Heritage will be rewarded. I look forward to sharing new developments with you in the near future."
The last statement is specifically directed to us, the shareholders. If they really have our interests at heart, they will hopefully have a plan of action that protects us, as well as them. To write such a letter, with that statement at the close, with any other motive in mind would be cold-hearted indeed. I hope, therefore, that they are true to their word. Again, only time will tell.
I hope that in time we will all be rewarded as they have stated. We certainly deserve that now imo.
GLTA
Agree Kyoshi, with no revs until loans close they have been forced to issue more shares by the looks of it for working capital....time sure is the enemy at the moment. I am just waiting now to see how events unfold.....certainly not selling down here as there is no point at this price...imo.
GLTA
Third quarter ends September 30th. Wouldn't surprise me if we hear news this month...would fit in nicely with the 3rd quarter financials being reported/ posted mid-October, which would be timely for the shareholders meeting on October 18th.....here's hoping that's the plan:)
GLTA
Good sign and agree it's unusual for a pink.....they mentioned in an email to me that they were going to send it to shareholders by post as well, so good to see they have been true to their word......shows some class imo.
They have been in development as a company for a long time. I think now they are gearing up and now realise the importance of improved communication. When the first deal (s) close the PR firm Gregory FCA will become actively involved in developing a strategy for HCPC. Think we will then see some significant developments with regard to marketing and communications to take the company to the next level imo.
GLTA
Interesting to note that there is no equivalent HCPC board on either the Raging Bull or Silicon Investor sites.....this supports the view that the stock is not being followed by that many people at the moment.
We usually have board marks in the high 30's of which maybe 15-20 people follow the stock closely, read the posts and possibly hold shares.....of those about 5 or so post on a regular basis......I think all of that will change in the next few months imo.
GLTA
Good week here.....all things considered....
If you have not read the shareholders letter released by the company on Monday 27th then it is copied below fyi:
http://investorshub.advfn.com/boards/read_msg.asp?message_id=22409456
Chart is shaping up too, interesting when you look at the HCPC weekly chart that a clear inverted hammer formed this week. See previous posts for more information on this candle indicating a potential trend change. On the daily chart we closed yesterday above the 20 day MA for the second time this week. For a long time the 20 day MA has acted as overhead resistance. To close above that is another bullish sign imo.
GLTA
Yesterday' trades, two after hour t trades:
t 0.0008 1850000 OTO 16:39:10
t 0.0008 1850000 OTO 16:20:18
0.0008 500000 OTO 12:46:54
0.0007 200000 OTO 12:11:20
0.0007 1000000 OTO 12:11:20
0.001 150000 OTO 11:17:05
Agreed, we need a confirmation day (s).....well the signs are beginning to show that the long decline, or 'the long asault on the bid' as you neatly put it could be over....reversals often take time but there are some tentative signs now that it could be happening imo
The shareholders letter was excellent and set out what we can look forward to in due course....it is important to remember that they have taken 4 years to get to this point.....over the next 4 months I think we could see a lot of progress on many fronts......patience as always is the key, but agree with you that the upside potential could be tremendous imo. The letter alluded to lot of positive news in the pipeline that will bring a lot more attention to this stock......
I've added significantly down here as well of late, as I know many have. The fundamental story has not really changed since I first came across this stock back in February of this year, only the timeline. In fact I think it has actually improved with their talk now of becoming a (Community) Bank. That would put HCPC in a different league imo as they would be subject to strict regulation as I mentioned in an earlier post.
Agree that the risk/reward is in our favour for adding down here imo.
GLTA
Candlesticks: Bit more info for those interested.........
Inverted Hammer
http://www.prosticks.com/education/candlestick_patterns/inverted_hammer.php?sid=92317e800b76782e2f2c....
"Inverted hammers form after a decline, or down-trend. An inverted hammer indicates that a reversal could be due. The candlestick formation represents that the bulls were able to drive the price higher intra-day, but could not hold on to the gains by day's end as there remains selling pressure left in the bears. However, it was an encouraging sign for the bulls."
and a link with some more info on the more recognised candlestick patterns:
http://www.trading-plan.com/ta_candlestick_patterns.html
GLTA
Looks like we have an inverted hammer candle today........they often indicate potential trend reversal after a long decline.........interested in the use/ interpretation of candle sticks but certainly no expert.........:)
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks
Extract:
"The Inverted Hammer looks exactly like a Shooting Star, but forms after a decline or downtrend. Inverted Hammers represent a potential trend reversal or support levels. After a decline, the long upper shadow indicates buying pressure during the session. However, the bulls were not able to sustain this buying pressure and prices closed well off of their highs to create the long upper shadow. Because of this failure, bullish confirmation is required before action. An Inverted Hammer followed by a gap up or long white candlestick with heavy volume could act as bullish confirmation."
and also:
http://www.streetauthority.com/terms/i/invertedhammer.asp
Extract:
"....If you examine the inverted hammer carefully, it hardly looks like a bullish candle. Prices opened low and then rallied strongly. By the close of trading, however, the stock has given back almost all of the day's gains. That leaves a small real body and a very large upper shadow. If anything, the candle looks bearish. The bulls could not sustain a rally, so the bears took the stock back toward its lows for the day.
So, why should this candle potentially set up an important reversal? My theory is that the inverted hammer is a signal that shorts are beginning to cover their positions......"
GLTA
I think most people here have been accumulating quietly over the last few weeks and months. Most know the potential and are awiating for things to unfold. When big news does come we will see a new wave of interest and buying.....in the meantime I think many here have already taken advantage of the price and built their positions.....I think ths is the quiet before the storm imo.......Off for today now.....have a good one longs:)
GLTA
Well all things considered that's a good average you have now....when you look at the net EPS projections from the company, a sub-penny average is looking pretty good imo.....
Also agree I don't think it would take much to leave the sub-penny days behind.......there has been a lot of accumulation with the price as low as it's been and I think a lot of it is from longs on this board who are holding for a much bigger prize, not just a short term flip, as they see the bigger picture. Am sure we will get the momo/ day trader crowd joining in when bigger news and volume comes, but it's the strong accumulation by those who I think will hold more tightly that is important imo.
Hopefully that will keep the 'available' float quite tight in the near to medium term....
GLTA
Well done noth shore, looks like you got them just in time....:) The ask side is very thin at the moment......I only get delayed Level 2 but seems like a big spread at the moment...0.0008 x 0.0015 .................then with one mm at 0.0025 ask and two mm's at 0.003 ask before it jumps to 0.01 ask where there's 2 mm's at present. Good news and I think we could move up quite quickly now imo
GLTA
Bank Regulation: Some general background on Bank Regulation and some of the authorities that HCPC would have to report to in becoming a (Community) Bank:
http://en.wikipedia.org/wiki/Bank_regulation
The high level of regulation would provide a high degree of transparency to the company and it's operations and, therefore, to us as shareholders.
GLTA
Bank Proposal: There follows quite a lot of info on HCPC's plans to become a (Community) Bank.
A. Background on HCPC and their current proposal to become a (Community) Bank
In the recent shareholders letter of 27th August 2007, Ms. Johnson stated:
"The Company plans to use a portion of its earnings to redeem shares and
the balance to form a bank and continue to originate BCLOC loans
through that bank. It should be noted that Heritage was founded in 1994
for the purpose of forming a bank."
A PR From 1999 ( see below, at end of message, for full PR), states that Heritage Capital Credit Corporation was once a subsidiary of Heritage Capital Investment Corporation. It was proposed in 1999 that Heritage Capital Investment Corporation would become Heritage Community Bank. This was before the involvement of Ms. Carol Johnson or what we now know as HCPC.
Extracts from PR:
"......Heritage Capital Investment Corporation's plan to raise $3 million to meet the Federal Deposit Insurance Corporation's capitalization requirement to start a new bank. The organization will change its name to Heritage Community Bank after completing the fund-raising phase."
and:
"For the last five years (i.e. 1994 as stated in Ms. Johnsons quote above), we have been building partnerships, educating the low- to moderate-income markets, and providing home equity and mortgage loans, through our subsidiary Heritage Capital Credit Corporation..."
This venture was not, however, successful and the business of Heritage was purchased (in structure only) in 2002 and Ms. Johnson then became involved. Subsequently, Heritage Capital Credit Corporation was made public in the reverse merger of 2004.
B. Banking, Regulation and the Community Reinvestment Act (CRA)
It appears now that HCPC plan is to use a large percentage of the funds that they receive from the BCLOC loan business to expand and become a (Community) Bank. They would then continue developing the BCLOC loan business as part of the bank structure. There are many examples of Community Banks both within the Pink Sheets, OTCBB and higher exchanges. It is important to note that in becoming a bank they would be strictly regulated by the banking regulators, including but not limited to the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Federal Reserve System. They would also need to be fully reporting to SEC. This would give much greater transparency and value to the company and shareholders imo.
The following article is a speech made by Chairman Bernanke to the Federal Reserve in October 2006.
http://www.federalreserve.gov/Boarddocs/Speeches/2006/20061016/default.htm
In it he discusses Bank Regulation and also the importance of Banks (including Community Banks) in supporting the CRA. A couple of extracts follow:
"Clearly, banks strengthen their local communities by providing a range of services and facilitating the flow of credit necessary to support economic development."
and:
"To address these possible market failures, to ensure that depository institutions help to meet the credit needs of their communities, and to achieve broader social goals such as expanding home ownership, the Congress in 1977 passed the Community Reinvestment Act (CRA). A key goal of the CRA is to induce banking institutions to invest in acquiring the knowledge and expertise needed to find profitable lending opportunities in lower-income neighborhoods, thereby removing an important barrier to the extension of credit in those neighborhoods."
C. HCPC Extensive Experience with the CRA and their plans to form a (Community) Bank
It is, therefore, very interesting to note that Ms. Johnson (Chairman and CEO of HCPC) has over 30 years of experience of the CRA through her career. This was stressed in Section 11 of the shareholders letter. The reason for the development of the BCLOC loan structure was in her words:
"The thought behind the BCLOC was the answer to the question: “How can community re-investment be made profitable to the commercial capital markets?”
In my opinion the pieces seem to be coming together. The development of the BCLOC loan business continues to build and use her expertise of the CRA and potential in the commercial capital markets. In developing into a (Community) Bank it looks as though they can continue the loan business and no doubt expand further, possibly even through a network of branches in due course. As mentioned at the beginning of this post, "It should be noted that Heritage was founded in 1994
for the purpose of forming a bank."
We will have to wait and see the detail on this as things unfold.
GLTA
PR from 1999 follows in full below:
First Union Pledges Initial $250,000 to Capital Fund for Minority-Owned Heritage Community Bank
WILMINGTON, Del., Dec. 21, 1999 /PRNewswire/ -- First Union Corporation
(NYSE: FTU) announced today that it has pledged to invest $250,000 to support
the startup of Heritage Community Bank, which is proposed to be Delaware's
first minority-owned bank.
First Union's investment advances Heritage Capital Investment
Corporation's plan to raise $3 million to meet the Federal Deposit Insurance
Corporation's capitalization requirement to start a new bank. The
organization will change its name to Heritage Community Bank after completing the fund-raising phase.
"We are excited to offer the first financial pledge to Heritage Community
Bank's capital fund," said Donn Scott, First Union's regional market
president. "First Union has a long history of support for and partnership
with minority-owned banks, which can help more effectively serve customers in
our communities. We hope our pledge today helps trigger additional capital
commitments from other investors."
Heritage Community Bank is designed to be a federally insured savings bank
serving residents of Wilmington and neighboring communities. The bank will
offer general financial services and focus on meeting the distinct needs of
lower-income and minority customers in Delaware.
"We are grateful to First Union for this first capital commitment as we
continue to work to finalize other commitments so that Heritage Community Bank
opens next year as a new beginning in our communities for the 21st century,"
said Edwin Smith, Chairman and CEO of Heritage Capital Investment Corporation.
"For the last five years, we have been building partnerships, educating
the low- to moderate-income markets, and providing home equity and mortgage
loans, through our subsidiary Heritage Capital Credit Corporation, in both
urban and rural Delaware," Smith said. "We also continued to forge ahead in
seeking capital investments from First Union, other leading banks,
corporations and institutional investors doing business in Delaware. These
socially responsible institutions are working through structural barriers to
help us establish Heritage Community Bank, which will meet the banking needs
of underserved communities throughout our state and the city of Wilmington."
Since 1996, First Union has committed more than $46 million in support for
community development financial institutions and minority-owned banks
throughout its operating region.
"We support the growth of community-based financial institutions that can
help serve lower-income and minority customers," said Robbin Moore, First
Union's community development investment manager. "First Union has invested
in other minority-owned banks throughout our marketplace, including
institutions in Atlanta, Richmond and Philadelphia, to better serve local
residents."
In 1998, First Union committed $95 million in community loans and
investments to customers and communities in Delaware, including $25 million in
mortgages for low- and moderate-income families and $52 million in small
business loans to support economic growth.
The nation's sixth largest bank holding company, First Union Corporation
is a leading provider of financial services to more than 16 million customers
throughout the East Coast and nation. The company has full-service offices in
Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North
Carolina, South Carolina, Pennsylvania, Tennessee, Virginia and Washington,
D.C.
For more information about Heritage Community Bank, please contact Edwin
Smith at (302) 658-2265 or by e-mail at HeritageCapital@aol.com
bsandy: Noted afterhours trades on Tuesday.....total daily volume was 25 million or so. Afterhours data follows:
u 0.0006 8365000 OTO 08/28
t 0.0006 8365000 OTO 08/28
Then yesterday, it looks like MM's may have walked the ask up on 5000 'trades' and again two afterhours trades but fairly small.......
t 0.0009 200000 OTO 16:35:37
t 0.0009 200000 OTO 16:23:55
0.0009 200000 OTO 10:29:56
0.0007 5000 OTO 09:41:36
0.0006 5000 OTO 09:30:38
Good close today at HOD.....first close above the 20 day MA in a while....that has been acting as overhead resistance for some time.....could be turning here imo. Certainly hope so:)
Neil
Fair point....will see if I can find out any more on that...they said in the letter in point 10 in response to the RegD 504 offering question:
"Issuing a Regulation D Offering is to meet the Company’s operating costs until the company can deliver the projects for funding."
After the recent offering, the current OS was close to the previous AS of 250 million. Whilst the increase in the AS was large, it does not mean that it would all be used by the company.....issuing shares at these prices to raise capital does not really make sense now imo. I am hoping that they have secured other bridging finance to get them to deal #1.
GLTA
I like the fact that the company is really not acting like a 'typical' pink sheet stock.
-Gregory FCA: A quality PR consultant lined up for when funding secured.
-Audited financials being prepared for future uplisting to OTCQX
-Signed off statements under Rule 15c2-11 by CEO (albeit unaudited at present)
-No pump pr's (almost the opposite...quite low key imo)
- etc etc.
I put this down in part to the following. The only way they can succeed both as a company and personally (through their own large shareholdings accumulated by personal investment in the company) and see their business plan realised is through the support of the funding source/ institutional investor. We know of one funding source who is looking to commit substantially in excess of $300 million into buying securities/ notes from the SPE Trust set up by the company to fund the loans. And there are likely to be other institutional investors that are in discussion as we speak.
You don't attract that type of money/ investor unless you have both a good product and conduct yourselves professionally. The investor will be monitoring every aspect of the deal/ company before they commit. I am sure these investors are used to dealing with businesses on the higher exchanges, so you wouldn't even get a 'foot in the door' unless you played things 'straight down the line.' In addition, they will no doubt be looking to these institutional investors for further business in future as more commercial loans are originated and prepared for pre-closing. It is a long term relationship that they need to develop and maintain with these people. That in turn safeguards us imo.
In addition, we have high insider ownership and hence a vested interest to make the business plan a success. They succeed when business plan succeeds and the shareprice goes up.......and so do we:)
GLTA
It certainly looks that way noth shore. Just from the number of posters/ posts on this board I don't think a lot of people have been following this one.......
I think you could be right on with your dates, you mentioned them some time ago and the information we are receiving from the company indicates that they expect things to happen before the year end........,.....the shareholders meeting is just over 6 weeks away on October 18th. We should have audited financials for 2006 by then and new Directors lined up for election too. If they are also now talking about uplisting to OTCQX before the end of the year, then I would assume that they would have closed some, if not all, of the loans by then. They mentioned that they believe they can lose all $740 million in loans by the end of 2007. If they do it will be huge for all us longs here.
It would not surprise me at all then, if we hear some good news with regard to some loan closing before the shareholders meeting in October imo
GLTA
PR from Tuesday 29th August advising of the shareholders letter which is posted on Pink Sheets and the Company Website.
Press Release Source: Heritage Capital Credit Corporation
Heritage Capital Credit Corporation Issues Letter to Shareholders
Tuesday August 28, 9:50 am ET
WILMINGTON, Del.--(BUSINESS WIRE)--Heritage Capital Credit Corporation (OTC Pink Sheets:HCPC - News) CEO, Gwendolyn C. Johnson, issued a letter to shareholders providing an update and answers to questions that have been posed to the Company. The letter is posted in its entirety on www.pinksheets.com and the Company's website: www.heritagecapitalcreditcorp.com.
The letter answers such questions as:
What is causing the current delay in funding the loans?
Is the institutional investor, stated in the press release on February 27, 2007, still providing the $300 million in funding for the purchase of the BCLOC Notes?
Has the "Subprime Market Turmoil" impacted the BCLOC Program?
Why did Heritage start the BCLOC Program?
What are the plans for the Company after the BCLOC Loans are funded?
Ms. Johnson concluded the letter with the following statement: "I am pleased about the significant opportunities that we hope to announce shortly. As we do, I believe the patience and support you have shown in Heritage will be rewarded. I look forward to sharing new developments with you in the near future."
About Heritage Capital Credit Corporation
The Heritage business model, which is implemented through its subsidiary, Independent Capital Credit Corporation, is to originate real property commercial promissory notes for securitization. Once securitized, they can be delivered to investors for funding. Using proprietary software and loan modeling techniques, Heritage can underwrite real property and commercial projects based on cash flows. To date, the Company has not delivered any projects for funding.
Safe Harbor
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking information made on the company's behalf. All statements, other than statements of historical facts which address the company's expectations of sources of capital or which express the company's expectation for the future with respect to financial performance or operating strategies, can be identified as forward-looking statements. Such statements made by the company are based on knowledge of the environment in which it operates, but because of the factors previously listed, as well as other factors beyond the control of the company, which include the ability of the company to implement its business plans and consummate the proposed acquisition, actual results may differ materially from the expectations expressed in the forward-looking statements.
Contact:
Heritage Capital Credit Corporation
Richard Razzeca
Vice President, Investor Relations
302-778-4222
info@heritagecapitalcreditcorp.com
PR seems to have bought some buying interest/ volume back today....I am hoping that the shareholders letter yesterday marks the start of more open communication between management and shareholders in future........sounds like there should be plenty of news coming out in the coming weeks and months and much to look forward too imo.
GLTA
bsandy: Yes, it's kind of ironic that after all the weeks of credit related news and the possible negative affects on the economy that it may actually be a blessing in disguise of HCPC in marketing their product...and for us as shareholders...lets hope so.
It really looks like things are beginning to come together. The letter gives us the bigger picture I think many of us had been looking for.........if they are able to close the $740 million this year, which they seem fairly confident of doing, we are looking at $0.135 net EPS for this financial year, based on current OS of 231.5 million shares. Add to that an uplisting to OTCQX (audited financials a prerequisite for that), probable share buyback and origination of more business loans and we will be looking at a very Merry Xmas:)......feet on the ground still here though and just being patient as things unfold.
GLTA
Another key point to note is that the current credit difficulties could actually be a benefit to HCPC as point 9 of the letter states (emphasis is my own):
" The Turmoil has had a deep-seated and far reaching effect on capital market investors and left a huge void in their list of viable investment vehicles ............. Thus, we believe the impact of the Subprime Market Turmoil has improved the environment for marketability of the BCLOC Notes. This may be attractive to the capital market investors who are now much more cautious and tentative in their disposition."
The idea then that they may have the right product at the right time for institutional investors (and borrowers alike) could then soon be validated.
GLTA
Agreed:) This is an excellent, open and honest pr. The company has had challenges to get to this stage both in terms of technical details of the BCLOC loan product as well as financing the company's working capital.....
However, the keypoints.....
It now appears that they are:
1. On track to close $740 million in loans this year....or a substantial amount of that figure at least.
2. Funding source for the loans is still in place. The source mentioned previously (funding $300 million) is likely to provide substantially in excess of that amount now.
3. Direct pay Securities/ Notes expected to be offered.....rated at 'AAA'
4. Endeavouring to uplist by end of 2007 onto OTCQX
5. Plans to form a bank when loans funded and continue to originate BCLOC loans for funding.
6. Share buyback with some of the profits from the initial loan closing deals.
Lots more info in the pr, so please all read the detail...this is just some of the highlights from my initial read.....but really looking good going forward.
GLTA
PR/ Shareholders Letter: Lots of info here folks....just going through it now....
Aug 27, 2007
Pink Sheets News Service
Wilmington, DE —
Heritage CEO Writes Letter Shareholders
Wilmington, DE - August 27, 2007- Heritage Capital Credit Corporation (OTC Pink Sheets: HCPC), CEO, Gwendolyn C. Johnson, wrote a letter to shareholders today, providing an update and answering many questions that have been posed to the Company. The letter reads as follows:
Dear Shareholders:
This letter provides a brief update on Heritage Capital Credit Corporation, which operates through its wholly-owned subsidiary Independent Capital Credit Corporation, in the form of questions and answers, which are meant to share current information with you, our Shareholders.
Through our business model, the Company does not operate as a funding source. However, we originate and prepare real property commercial promissory notes for pre-closing and deliver them to a funding source. Management believes it can deliver more than $740 million in projects for funding before year-end.
Questions and Answers:
1. Q: What is causing the current delay in funding the loans?
A: Heritage does not fund loans. However, in the origination of real property commercial promissory notes, there are a number of simultaneous challenges the company has faced in order to be in its current position. First, each request from a customer requires that their individual business plan be packaged into the BCLOC. The BCLOC is a new product with a new process. With this has come a learning curve resulting in significant challenges and the additional workload of assisting applicants who have submitted business plans that required more information gathering in addition to explaining the product and process. Second, the BCLOC represents a paradigm shift from traditional commercial lending philosophy that requires time and effort to gain the trust, acclamation and comfort of investors involved with a funding source. Lastly, the time necessary to assist applicants with submitting full applications caused the seasoning of business plans and the expiration of purchase contracts they were negotiating under their business plans.
2. Q: What is the size range?
A: The projects range in sizes from $2 million to $245 million.
3. Q: Is the Company still pursuing a Credit Rating with the National
Agency for the BCLOC Promissory Notes? If so, what is the
timeline for receiving this rating?
A: The Company has never pursued a Credit Rating. Our affiliate executed a contract in 2005 with a rating agency to process "AAA" rated securities issued by its special purpose entity. This contract is currently in effect.
4. Q: Has the Public Relations firm (Gregory FCA) commenced its
appointment as of June 1, 2007 as stated in the recent Press Release?
A: The Public Relations Firm is on hold until we deliver the funding source.
5. Q: Is the institutional investor, stated in the press release on February 27,
2007, still providing the $300 million in funding for the purchase of
the BCLOC Notes?
A: A potential funding source has advised us that the special purpose entity (SPE) that issues the BCLOC Securities has made changes in the structure to reflect the current credit market conditions and expects to offer direct pay "AAA" rated notes versus collateralized debt obligations or CDOs. Further, they have advised that the restructuring is expected to allow the funding source to offer BCLOC Securities at a substantial amount over the $300 million previously mentioned in the press release.
6. Q: OTCQX: Does the company still plan to up-list onto this exchange
and what is the current anticipated timeline?
A: Yes. We are endeavoring to be up-listed by year-end 2007.
7. Q: The Company recently advertised for a loan closing attorney on the
website. Has this position now been filled?
A: We have not filled the position. The Company has several major law firms that will assist with the pre-closings.
8. Q: How has the Company's business been impacted by the Subprime
Market Turmoil?
A: The "Subprime Market Turmoil" refers to subprime residential mortgage lending. The Company's business is originating real property commercial promissory notes for pre-closing and delivering them to a funding source. Therefore, we provide a specific service for the commercial lending industry, completely separate from the residential subprime market.
9. Q: Has the "Subprime Market Turmoil" impacted the
BCLOC Program?
A: The Turmoil has had a deep-seated and far reaching effect on capital market investors and left a huge void in their list of viable investment vehicles. This has left the reinforced capital infrastructure created by a potential funding source poised as an attractive answer to the capital market investors' perceived and actual exposure. Thus, we believe the impact of the Subprime Market Turmoil has improved the environment for marketability of the BCLOC Notes. This may be attractive to the capital market investors who are now much more cautious and tentative in their disposition.
10. Q: Why has the company issued a Regulation D, 504 Offering?
A: Issuing a Regulation D Offering is to meet the Company's operating costs until the company can deliver the projects for funding. Upon delivery, the Company will be paid a fee on each project and thereby receive a fee of 5% of the funding needed for each project.
11. Q: Why did Heritage start the BCLOC Program?
A: As CEO, I bring to the Company 30 years of experience in dealing with the Community Reinvestment Act ("CRA") markets. In 1976, while at the Federal Home Loan Bank of Cincinnati, I participated in the design of CRA, joined Freddie Mac in 1991 to continue to be involved in CRA work and in 1995 at GMAC Mortgage Corporation I designed a program to sell CRA Loans to banks and successfully led the sale of more than $1 billion in loans. Drawing on this professional experience and then through their own subsequent research, the Company's management team determined there was a much broader market than CRA for a new real property commercial product and the BCLOC was designed for the market targeted toward meeting a need in new commercial markets nationwide.
The Community Reinvestment Act was enacted in 1977 to encourage banks and thrifts to help meet the credit needs of all segments of their communities. (Source: Office of the Comptroller of the Currency.)
The thought behind the BCLOC was the answer to the question: "How can community re-investment be made profitable to the commercial capital markets?" Commercial property lending could provide a means for communities to reinvest in themselves significantly. Combined with a reinforced capital infrastructure, commercial lending could not only be profitable but also much less risky for the capital markets. Thus, the BCLOC was structured to do just that and under the initial program, a credit facility was established for the initial applicants who paid fees. In April 2005, the Company discontinued the fee structure and renamed the product the BCLOC Promissory Note and kept in place the credit facility for the initial applicants.
12. Q: What are the plans for the Company after the BCLOC LOANS
are funded?
A: The Company plans to use a portion of its earnings to redeem shares and the balance to form a bank and continue to originate BCLOC loans through that bank. It should be noted that Heritage was founded in 1994 for the purpose of forming a bank.
13. Q: Is the Shareholders Meeting on schedule?
A: The Annual Shareholders Meeting is scheduled for Thursday, October 18, 2007, in Wilmington, DE.
We hope that these questions and answers give you more insight into the Company's business model and the current status of its progress.
I am pleased about the significant opportunities that we hope to announce shortly. As we do, I believe the patience and support you have shown in Heritage will be rewarded. I look forward to sharing new developments with you in the near future.
Very truly yours,
G.C. Johnson
Chairman and CEO
About Heritage Capital Credit Corporation
The Heritage business model, which is implemented through its subsidiary, Independent Capital Credit Corporation, is to originate real property commercial promissory notes for securitization. Once securitized, they can be delivered to investors for funding. Using proprietary software and loan modeling techniques, Heritage can underwrite real property and commercial projects based on cash flows. To date, the Company has not delivered any projects for funding.
Safe Harbor
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking information made on the company's behalf. All statements, other than statements of historical facts which address the company's expectations of sources of capital or which express the company's expectation for the future with respect to financial performance or operating strategies, can be identified as forward-looking statements. Such statements made by the company are based on knowledge of the environment in which it operates, but because of the factors previously listed, as well as other factors beyond the control of the company, which include the ability of the company to implement its business plans and consummate the proposed acquisition, actual results may differ materially from the expectations expressed in the forward-looking statements.
Contact: Richard Razzeca, VP Investor Relations
Heritage Capital Credit Corporation
Email: info@heritagecapitalcreditcorp.com
The above news release has been provided by the above company via Pink Sheets News Service. Issuers of news releases and not Pink Sheets are solely responsible for the accuracy of the such news releases.
Just being patient here.....actually I don't mind the current situation too much as at least the selling/ shorting of RegD shares seems to be over.....and the company is not going to be diluting at these prices imo.
News, when it comes should bring in new interest and buying pressure.....if, as they say they have, nearly resolved the credit rating issues, then the first loan closing deal may not be far away........such a pr would see us head way north........so worth the wait imo
GLTA
I have received a reply from Carol Johnson. They are still working on the pr (that was originally scheduled for last week), and it should be out shortly.
In my email (that she responded too), I also mentioned the issue regarding the lack of response to calls/ communication from IR. She made no direct comment on this point but thanked me for my email, We will have to see if this is addressed in due course.
GLTA
nhguy: ok, thanks for the info....have sent off a couple of emails....they need to improve on this...will let you know if I get any feedback....
GLTA
Another possible reason for the delay in the pr release could be connected with the breaking news story that the Fed decided to cut loan rates by half a percent on Friday.
http://biz.yahoo.com/ap/070818/fed_interest_rates.html?.v=2
This will have implications to HCPC's loan business/ finance as it will bring down the cost of credit...............we will have to wait and see if there is a connection between the two.
GLTA
Well the company has been pretty good on the whole about communicating through pr's this year and their regular filings of the financials.... I think we will hear an update soon, hopefully next week.
Interesting to note that the new Director Mr. Patel has worked in IR previously for small cap companies and both he and Mr. Cloud, the other new Director, trade their own private portfolios for a living. Both are also HCPC shareholders. I am hoping their background means that they will have input into the pr content and overall strategy. Being traders/ investors they will certainly understand the importance of regular communications in supporting and enhancing share value.
GLTA
nhguy: Firstly, I agree with your comments on returning phonecalls. Did you call their IR company or Rick at HCPC? We should certainly push for better response from them to help build confidence. I was advised we would receive a pr update this week. Again, there may be a very good reason for a delay...but better to say nothing in the first place than not deliver. It could be that they are waiting for clearance from their legal team or that they are waiting on some info before they pr. I will follow up on these points and see if I receive a response.
GLTA
The selling has pretty much dried up down here now.....looks like they may have secured sufficient finance from other sources to get them to deal one now imo.......
GLTA
Good price to add noth shore imo....added a few here too today......yep, insiders are holding and despite the current credit issues, the company mentioned in the pr of July 30th that they were confident that they would sort out the credit rating issues for the BCLOC loans/ Promissory notes in this quarter....
When they do achieve that and close the first deal(s) we are away. The time to date has been the equivalent of designing and refining a prototype for production imo. It's taken time and money for them to get this far and sort out the many issues surrounding it as well probably being delayed by the tightening credit situation. However, once they close one BCLOC loan the 'prototype' is proven to work and they can crank out many more loans after that........patience is the key imo.
GLTA
Couple of useful articles on Securitization and Credit Enhancement which helps explain the HCPC business model/ plan.
http://en.wikipedia.org/wiki/Securitization
http://en.wikipedia.org/wiki/Credit_enhancement
GLTA
PR planned for next week. I have received an email from Carol Johnson advising me that the company is currently preparing an update which will be released by PR next week. She gave no detail beyond that.
GLTA
Share Structure: Changes from April 19th 2007 to June 30th 2007
This is just a summary post for the record. I'll include it within the DD section of the i-Box above along with similar posts for previous quarters. In that way, anyone (including newbies) can track the changes over time. May also prove to be useful 'anti-basher' material in due course...should it be required:)
The key changes for the above period are as follows:
AS: 250 million ( now 1.5 billion as of 17th July 2007)
OS: 231,552,123 ( as of 13th July 2007)
Float: 77,130,234 (see note 1 below)
OS shares have increased by 47,210,677 (as of 30th June 2007) since the company filing of 30th March 2007 when OS was 184,341,446 .
These are mainly accounted for by:
i) The Mazuma Corporation received an additional 18.5 million shares of common stock issued as a result of the recent Private Placement Memorandum (PPM) by the company/ RegD Offering bringing their overall total to 33.5 million .
ii) TJ Management Group, LLC received 28,200,677 shares of common stock issued as a result of the recent Private Placement Memorandum (PPM) by the company/ RegD Offering.
Total of above i) and ii) is 46, 700, 677 i.e This accounts for nearly all the OS increase in this quarter, save for 510k shares.
Notes:
1. The 'official' available float is c.16 million, however, it is thought that some, possibly even all, of the recently issued RegD shares (as noted in point 4 below) have been used to short against. As a consequence of this, it is thought that the actual available float has increased and could be as high as stated above. The available public float is, therefore, maybe as high as 77,130,234 or 33.3 % of OS.
2. Insiders ( + family members with holdings > 5%) account for 50,491,889 shares or 21.8 % of OS shares.
[Ed Johnson: 38,546,383 (No Change as of 30st June 2007)
Note: Ed Johnson is the husband of CEO, Gwendolyn Carol Johnson]
In addition, 4 adult children of Gwendolyn Carol Johnson and Ed Johnson own 4,038,000 shares, which represent less than one percent of the outstanding shares. Combined total of these shares is 54,529,889 or 23.5 % of OS shares.
3. The First Independent Financial Group (FIFG: an affiliated company, controlled by Directors of HCPC) accounts for 103.5 million or 44.7 % of OS shares.
The combined total of 2 and 3 above is 158,029,889 or 68.25 % of OS shares.
4. Institutional Investors (namely Mazuma Corporation and TJ Management Group, LLC ) have been issued 61, 600, 677 shares or 26.6 % of OS shares
The combined total of 2, 3 and 4 above is 219,630,566 or c. 95% of OS shares
GLTA