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The formula is supposed to calculate the voting power of each preferred share (not a %). Using 260,000,000 AS it would be:
(.019607*260,000,000/.49)-(.019607*260,000,000)= 5,305,894.29 votes/share
5,305,894.29 * 51 shares = 270,600,608 votes
In other words, no matter how high the OS goes, Conrad will always have more votes.
567tbd just pointed out to me that my statement of 500 million OS was incorrect. The number came off QuoteStream, and probably was the OS before the R/S.
The actual OS is currently 29,862,652. I happily stand corrected. I'm also pleasantly surprised that they've gotten a breather from all of the convertibles.
The Designation is out. The company is issuing 51 shares of a new Series A preferred stock to Conrad Huss. Each share has voting power based on an algorithm that guarantees that he will have majority voting power no matter how many common shares are issued. The 51 shares are convertible at his option to 51 shares of common stock (but why would he convert ) and have a stated value of $1/share. The preferreds can not participate in any dividends and the voting power would be adjusted accordingly if there are any stock splits or stock dividends.
Basically, the sole purpose seems to be to give Conrad Huss total control of the company.
As I said before, there seems to be more afoot here than 20% royalties from FAL.
I'm not quite as pessimistic about financing as you are. In the overall scheme of things $10 million is really not that much money. It's pocket change for a lot of companies and individuals. With a good business plan, I could see someone investing if for no other reason than that if it's a bust they'll have a decent tax write-off.
I don't think this stock can absorb about 200 million shares over the next year, which is what it would take to meet these salary contracts at the current discounted price (.018). Either we'll see another R/S which would totally devastate the company's stock or there's a possible alternative interpretation.
There's a lot of language in the contract about what would happen if the ownership changes through merger, acquisition or stock sale. These guys seem to have some faith that they will continue to get paid. They can't collect unless the stock pps stays viable and they can find the $10 million needed to complete the plan. I'm amazed that the pps is still over $01. The current OS is close to 500 million and they may have cleared out a lot of the convertible debt. Perhaps they are close to lining up some financing.
JMO
You may be right about this being a Pump & Dump. However, if it is getting ready for another P&D we haven't seen the new pump yet. Why would the new management go to all of this trouble if all they were going to do is one PR about minerals (we're not even sure what kind) in Alabama. I'm betting that either we'll see a legitimate company with real revenue emerge, or at least we'll get a decent pump that will drive us into multi-penny land. Either way, there's a chance to make some big $$$$
Also, i've owned this stock for over two years when there were no press releases or SEC reports and the price never went below about $.0005 and rarely stayed below about $.0012. Why would it go lower now without some major dilution event?
Unfortunately, "Phillip E. Jennings resigned as director, Chief Executive Officer and Chief Operating Officer" along with most of the rest of the previous management as of January 30, 2013 according to the 8K filed on 2/13/13. That's what kicked off the current interest in this stock. Since then the new management under Conrad Huss has been catching up on two years worth of delinquent SEC reports to bring the company current (which milestone happened about a month ago).
I may have spoken too soon. It turns out that there is a "Gold Belt" in Alabama. In tracking the info on Eric Weisblum who is a principle at FAL, I came across one of his investments "Southern USA Resources" (SUSA) that is supposedly searching for gold in Alabama's Gold Belt. There are several articles on this area if you search Google, including the following:
Gold Locations in Alabama
Nevertheless, I still think that they'll be finding oil on that property before they find any gold. Eric Weisblum is also associated with several Petrochemical investments.
I also still think that there will be more PR's and investments comming out of BRZG.
Sounds like you've been drinking some right wing Kool Aid. Like the welfare queen with 10 kids driving a Cadillac, they leave out the part about the Cadillac being 20 years old. It's always big bad gov'mint and their evil regulations causing poor businesses to shed jobs and lose money. The story of the corrupt bureaucrat being forced to punish business due to unfair regulations has been around in different versions longer than I have. The people putting forth this argument won't acknowledge that too many mines have, in the past, maximized their profits by minimizing their cleanup and that people actually demand that their drinking water be clean and the air they breath be pure.
Yes, CGFI will have to pass some regulatory hurdles, but one of the things that has always impressed me about this company is that they've been going the extra mile to stay on the right side of regs. The problem here isn't government regulations it's MONEY.
Those are all results of an EDGAR (SEC) search on the name "Eric Weisblum". Perhaps they're all related by virtue of his role as Executive Officer of Sable Ridge Capital Opportunity Fund, L.P. (see the first page of the first entry).
I haven't looked through them all but these could be all companies that Sable Ridge has invested in.
The contract with the Alabama couple was signed by an Eric Weisblum for FAL Minerals. Here's a little DD on him:
Eric Weisblum - EDGAR
FAL Minerals is a private company (LLC), hence, no SEC reports or stock sales.
This is a very complex subject and I don't claim to fully understand it myself. However the clearest explanation I've found was contained in the following article:
ARR - Agency Security Fund or Market Speculator
The article is about Armour Residential REIT but AGNC has a similar business model. Essentially, the company buys government backed mortgages, packages them, sells the resulting securities to banks with an offer to buy them back later at a higher price, in effect, getting a loan from the bank similar to a bond. Like a bond, when interest rates go up, the value of the underlying security goes down and the company looses on the trade. AGNC has various ways to hedge against this kind of loss but the hedges don't completely offset the decline in value. This reduces their ability to replace older loans that have low interest rates with newer loans that have higher interest rates. The share price reflects the decline in book value of the company due to these losses plus speculation about the ineffectiveness of their hedging strategy plus speculation about where interest rates will be in the near future.
This is probably an over simplification. If I'm mistaken about any of this I would welcome any comments/corrections.
Glad your reading my posts, but the main point I was trying to make is that while BRZG was a company most people had written off, the new management has spent a lot of time and money to turn it around. The recent PR's are promising but will not produce immediate revenue. At least there's something in the works. We don't know what their plans are but I'm sure they haven't gone to all this trouble just for this one deal. Stay tuned and invested because there's probably more to come.
It's a good time to load up some cheapies.
It's more like WE have no clue what THEY want to do. This deal with FAL would lead me to believe that they might want to be a holding company of some sort. In any event, I doubt that they went to all the expense to get current with no idea of what they wanted to do when they got here. Maybe they have some inside information on oil reserves in Alabama.
It's odd that they are still referring to themselves as a "precious metal exploration company" in their PR when they are actually investing in oil & gas. There must be more here than what they've told us so far.
I'm not trying to disparage what they're doing. I've owned this stock since they were still exploring for gold in Brazil over two years ago. I'm just trying to keep the conversation real and offering a little DD. I think there's a good chance that they'll reach multi pennies and possibly more (I've currently got 1.6 million shares at .0016). There's just no sense talking about gold prices when their investment is currently in oil & gas.
They gave up on Brazil and looking for gold several years ago. They briefly tried to turn back into a software company (which is where they got their start), then their lenders kicked out the management and installed their own guy to clean up the books and file two years worth of SEC reports to get current. That's where we're at right now. They just announced a deal to get 20% of the royalties from FAL but there won't be any royalties until they actually start drilling and find some oil or gas.
Hopefully they have some other deals in the works.
There's no gold! Doesn't anyone read the SEC reports. Check out Sub Document 3 of the 8k. It contains the lease agreement between FAL and a couple in Alabama to lease their land primarily for oil and gas exploration!
THIS IS NOT A BAD THING! It would be easier and quicker to extract oil and gas from a property than to get mining and milling permits. However, we're still a long way from producing revenue. The lease was just signed in June.
I don't think that BRZG went to all the trouble to get current just for this one deal. There's probably more coming down the pike. I like the long term prospects but I'm not surprised that we're still sub penny. It's a good time for loading more shares. Another PR could come at any time so it's good to be prepared.
Looks like Momona Capital is a company that specializes in buying pump and dump penny stocks.
Edgar Majority Ownerships
"Democratic Party" is a proper noun, like "Vice President" or "Long Island" or "New York" You don't say "Republic Party" do you?
Go to this site:
Quantumonline.com
type in FNMA or FMCC then select "Find all related securities"
This will give you a list of all of the preferred shares for each stock with links to a summary description and prospectuses. Each preferred has a different dividend rate and liquidation preference. Some are $25 shares and others are $50 shares. The dividend rate is based on this liquidation preference so the cheaper you can buy the shares relative to the liquidation preference the higher the yield will be if/when they start paying dividends again.
If you buy a preferred like FMAT, it probably will never get much higher than $25/share (it's liquidation preference). Consequently, if you buy it for $8/share your maximum profit will be about $17/share whereas if you buy FNMAN at the same price you could make up to about $42/share not counting dividends. Your yield on FNMAN at that pps would be about 32% whereas on FNMAT it would be about 26%.
BTW, it's the Democratic (not Democrat) party. Showing a little RepubliCON bias there.
Agreed Ak, lot's of info in that report including the Cap-ex requirements for the Champion Mine that Bruno's been harping for.
One thing concerns me a bit though. Shouldn't this report be filed with the SEC. I haven't seen a new filing yet (lag in publishing perhaps)? Maybe we'll see it next week.
I get it! The research report is a paid advertisement. It still lays out the facts that are contained in the SEC Guide7 Technical Report in a manner that's more digestible for investors, which is probably all that it was intended to do in the first place.
I'm still leary about betting the farm on these guys, but I've been saying all along that the PPS today is more the result of bad judgment, bad luck and possibly financial market incompetence than of any criminal or intentional wrongdoing on the part of management. It's been tireing watching you guys all but convict them of fraud in your posts. I think the SEC has much bigger fish to fry than any perceived rule breaking by CGFI. They're no worse and I'd say a great deal better than dozens of other junior mining companies, several of which I've had the unpleasnat experience of investing in.
They may very well end up doing more convertible financing and the pps may again dip under $.01 before they're through. Consequently, I'm not about to jump back in just yet. On the other hand, I'm still hoping they're able to follow through on their plans.
FYI. From the CGFI letter to shareholders emailed today..
You conveniently left out the last word in the quote:
All of the examples you reference indicate that the SEC is repremanding companies for saying in their formal filings that they "have prepared an NI 43-101 report" or that they reference mineral deposit amounts from such a report in their filings. I do not see that CGFI has made such a claim. From the most recent 10Q:
The OS may not be as impressive as you think. The company has a bunch of convertible debt owed to Southridge. From page 10 of the 10Q...
Does anyone have a link to a good chart or table or site that tracks the spreads?
Yes, thanks LJ. It certainly doesn't look like management is ready to give up on this yet.
I think a lot of people, including many of the big MM's and institutions, were on holiday yesterday and most of last week, giving more room for the traders to run wild. Hopefully, things will stabilize on Monday. Most of my REITs have lost over 1/3 their value in the past two months. There's no logical reason for it other than panic. Some fantastic bargains out there right now, including NTI.
You may have a point. I own a lot of REIT's since I've been trying to maximize my income. I've been fighting margin calls all week. I've chosen to hang on to NTI but I can see other investors thinking the high yield and brief sales history indicates more risk and dumping the shares.
??? Chart shows Brent at $99.15 and WTI at $83.92
Crude Oil Prices
I don't get why this stock is going down. They should have record profits next quarter based on this spread. What am I missing?
Insurance companies will only insure up to the insurable interest of the insured. This is a basic premise of the insurance industry. I can't insure your home for $100 million for two reasons. First, I don't own your home so I have no insurable interest in it (otherwise I could insure any home on my street and burn it down to collect on the policy). Second, you couldn't even insure your home for that amount because your home is probably not worth $100 million (so you can't possibly loose that much. This could give you an incentive to cause a loss and file a claim). The same principle holds for commercial policies. Management can't insure their Directors beyond the insurable interest of the Directors and the company (i.e. the maximum loss they can sustain). Insurance companies frown on doing this and will ask customers to justify limits that are significantly more than their assets and income. One reason they make exceptions is if a higher limit is required by one of the insured's vendors or customers. Also, the minimum D&O policy limit sold by most carriers is typically $1 million so startups often may have more coverage than they need.
In this case, as I pointed out a requirement might come from the SEC or exchange as a precondition for listing the stock. I'm just not familiar with their requirements. However, if such a requirement exists on the OTCB for penny stocks, it would have to be pretty low or a lot of the companies on the board would have delisted long ago. Premiums are determined by spreading the estimated cost of claims from companies in the same industry with similar profiles across the number of policies the carrier expects to sell, then adding a percent of profit.
Legal fees are typically covered outside the limits of the policy by the insurance company (after all, they're defending their own interest as well). In the case of D&O insurance, the assets and income of the Directors is also taken into account. However, with most startup companies, the Directors aren't typically multi-millionares and if Nevada law protects their personal assets then this would be a moot point anyway.
Another point to keep in mind is that D&O coverage is meant to protect Directors from inadvertant mistakes done in good faith. No insurance policy will protect the insured from their illegal acts if done with full knowledge that they were acting improperly, otherwise they'd be giving an incentive to criminal behavior.
The user group I mentioned operated as a non-profit corporation with a Board of Directors. Again, the premium would depend on the limit of the policy which would be a factor of what the company (or Directors) could possibly loose (you can't squeez blood from a turnip principle) unless a higher limit is required by an outside party.
The question of whether a company can find coverage is a whole different issue. In their present situation, CGFI probably could not. One question insurers always ask the customer is whether they are aware of any situations that could lead to a possible lawsuit againt them. I doubt that they could pass this test. However, if they have had continuous insurance coverage since they were formed, it's probable that they still have a policy.
You miss the point Bruno. You can sue CGFI for $100 million or more if it turns you on. The point is if I'm CGFI management, I look at my liability exposure (i.e. how much can I loose in income and assets) and insure myself for that amount. As a Nevada Corp. my understanding is that D&O liability transfers to the corporation. Consequently, if I were management, it would be wasteful and in itself a violation of my fiduciary reponsibility to my stockholders, to insure myself for more than what someone could collect by disolving all my assets (there's no income for them to take). As a startup, I would probably have insured the company for about $1 million until they owned significantly more assets. What does CGFI own outright? The risk to the insurance company is $1,000,000 period. The premium could be higher or lower depending on the percieved hazard, but there's no way I could see an insurer charging $80,000 for $1 million in coverage (perhaps on life insurance for a 75 year old ;o)
Now it's possible that the SEC or stock exchanges may have a required insurance liability limit for listing companies. This is not something I've dealt with. I do know that I insured a customer users group for a major well-known software company for a $1 million D&O policy recently. The premium was only $1,100.
You're correct about risk being a factor but there is much less risk when the company is not operating (i.e. no revenue, no mining, no milling, no employees, etc.). You can't sue a company for $100 million when they're probably worth no more than $1 million. You can't take what they don't have!
Also, this company has been in operation since at least 2007 (perhaps earlier operating under different management). There's a good chance they purchased coverage years ago and have been grandfathered into a policy prior to any DTC issues. D&O coverage for a small startup company with little risk would start at around $500/year for a $1 million policy.
As an insurance agent, I just want to correct a misconception here. D&O insurance is not costly per se. The premium largely depends on an insured's assets and income. The purpose of insurance is to protect the insured's assets and income. You can't protect what you don't have.
In this case, as a Nevada registrant, any D&O liability would probably fall on the company. Since the company has no income and very few tangible assets, they would only need a policy with a relatively low liability limit, perhaps one to five million, unless a higher limit is required by law, lender or prospective customer. The same would be true of the company's General Liability coverage. The total cost of their D&O coverage could easily be under $5,000/year.
In any case,I agree with ficose. Any lawsuit would only eliminate the very slight possibility of the company turning things around without any significant benefit to he shareholders.