Value Microcaps Motherboard

[abh3vt]

2morrow, I did some digging after your post. Here is some of what I found.

First, SovGem has owned both HRBN and BBC in the past:
http://bigcharts.marketwatch.com/news/articles.asp?guid={B30C90DB-0FE8-4BFB-989E-81CD85107BCA}&n...

"SovGEM initially purchased 450,000 BBC at a price of $4.50 in November 2004; currently we hold 70,000 shares that closed on 9 November 2005 at $12.40. In February 2005 SovGEM purchased 500,000 shares of HRBN, today we hold 200,000 shares valued at $7.80 at the close of business on 9th November 2005. We remain extremely excited about the potential news flow from these two companies as well as the future of AOBO."

It appears that they may have added to their position in BBC during the recent AIM offering:

"Bodisen was and remains a rapidly growing business, which has
effectively doubled in size each year. The company was in the process of
building an additional plant to cope with increasing demand at the time
of our investment. This new plant has now opened.

The investment offered significant potential capital growth for its
shareholders. It also intended to move up a division to the AMEX market,
which would further enhance value as this market attracts institutional
investors that do not invest in the Bulletin Board.

The shares have been sold throughout the year, and have generated
significant profits. Bodisen sought a listing on AIM, which it achieved
last month. We participated in the London listing with the purchase of
around 38,000 shares and we believe the company's prospects remain
strong.
http://www2.cdn-news.com/scripts/ccn-release.pl?/current/0321003n.html

It appears there was a relationship between SovGEM and NY Global at one time:

http://www.growthcompany.co.uk/sector/8700/financial-services/22674/sovgem.thtml
"SovGem’s shares were suspended for five months this year, while chief executive Hugh de Lusignan attempted unsuccessfully to negotiate a reverse takeover. This left the company with an exclusive agreement to support some of the pre-IPO fundraisings carried out by Chinese specialist finance boutique Benchmark, now part of New York Global. Some investors felt this was too restrictive. De Lusignan has now managed to extract SovGem from this agreement, meaning he can select investments from a wider variety of sources.

I did some more digging in Harbin's financials regarding how they came to own shares in Bodisen. The 10k listed "marketable securities" but didn't disclose the name of the investment:

"6. INVESTMENT IN MARKETABLE EQUITY SECURITIES

The Company’s investments in marketable securities are classified as “available for sale” securities, and are carried on the financial statements at fair market value. Realized gains and losses are included in earnings, unrealized holding gains and losses are reported as a separate component of stockholders’ equity as a component of “Other Comprehensive Income.” The average cost method is used to determine cost of securities.

The following is a summary of the Company’s investment in marketable equity securities, all of which are classified as available-for-sale securities, as of December 31, 2005:



Cost

Estimated fair value

Unrealized gain
Equity securities

$ 520,846

$ 1,005,772

$ 484,926


"During the year ended December 31, 2004, the Company received marketable securities of $508,245 in settlement of accounts receivable of $508,245.

What's curious is that when you go to HRBN's 10k for 2004, there is no mention of this A/R settlement.

Either way, it looks like HRBN sold this investment in BBC earlier in the year:

TIANFU, YANG N/A CHN 2/1/2006 N/A Form 144 N/A 180,000 N/A N/A 2,869,200 N/A / N/A N/A
HARBIN TECH FULL N/A CHN 2/1/2006 N/A Form 144 N/A 70,000 N/A N/A 1,115,800 N/A / N/A N/A

I guess some of those shares were registered to Tianfu, not HRBN.....

In fact, looking at the BBC chart, it appears that these shares may have been dumped at or near the top (around 1/31/06). A lot of other shares were listed for sale around the same time.

This would be an interesting item to dig into, but since the shares appear to be from an old debt/obligation from Bodisen to Harbin/Yang, and all the shares appear to have been sold, what difference does it really make now?

Not sure if this was all that helpful, but it may fill in some of the blanks.