Platinum Research Organization, Inc.(fka PLROQ)

[Patrick111]

About 50 cents
When you analyze a company, you have to do it on two levels, the “whole company” and the “per share” value of the company. If you decide PLRO is worth a few millions as a whole, you should be able to break it down by simply dividing the price tag by the number of shares outstanding. Unfortunately, at this point the merger agreement says exactly this:
“We will issue, on a fully diluted basis, 82,500,000 shares of common stock of
the Company pursuant to the Contribution Agreement. We will issue 55,000,000
shares of common stock to PRO Transferors, the holders of partnership interests
of Platinum LP. The Company will also issue 5,000,000 shares of preferred stock
to the Investors who may convert the preferred stock into an aggregate total of
25,000,000 shares of common stock of the Company, a total of 2,500,000 warrants
exercisable for 2,500,000 shares of common stock of the Company, and 10,000,000
shares of common stock to certain existing stockholders who are exercising
warrants. On closing of the Contribution Agreement, the PRO Transferors, the
Investors and exercising warrant holders will control in excess of 90% of the
outstanding common stock of the Company on a fully diluted basis after giving
effect to a proposed cancellation of 22,500,000 shares of common stock held by one of our current stockholders.
Accordingly, the Transaction will have the effect of substantially reducing the percentage equity of each of the Company's existing stockholders.
If we try to analyze and come up with the right value of this company then let us think of the shares as an apple pie and each share of stock as a piece of that pie. All of the company’s assets, liabilities, and profits are represented by the pie as a whole. For the sake of argument let us say that PLRO’s pie is worth about six million dollars. The amount of outstanding shares until today were 42,500,000. However by tomorrow management will increased to what looks like about 114,000,000 shares (I may be mistaken but after reading all those pages in some places looked like 106, or 102, but with all those shares here and there it seemed to me more like 114,) so each piece of the pie will be worth much less thanks to the merger. So the closes value that I can come up is about FIFTY CENTS.
Obviously, any intelligent person that has cut a cake knows that if you make too many slices all you are left with is crumbs and no big pieces are possible. Likewise, an ambitious investor hungry for returns as I seem to be is going to want to keep the company from increasing the number of shares outstanding, but since there is nothing we can do about it then we can only elect to value the best we can. Every new shares management issues decreases the investor’s “piece” of the assets and profits a tiny bit. Over time, this can make a huge difference in how much the investors gets to eat a piece of the cake or just a few crumbs. So at this point I feel like there is nothing left to eat.
Management has increased the number of shares outstanding and they have used them all: stock options, warrants, convertible preferred stock, etc. Stock options are a form of compensation that management often gives to executives, managers, and in some cases, regular employees. The Incentive Plan, that has been approved by the stockholders,(it will have been approved regardless since Mrs Pineda owned 53.3% of all the stock). The company says “It authorized the Board of Directors to grant up to an aggregate of approximately 34.2 million stock options to the directors, officers, employees and consultant's of the Company. An aggregate of up to approximately 24.8 million shares subject to options under the Incentive Plan will be allocated to former employees, directors officers and consultants of Platinum LP, who will receive those options in exchange for existing equity options granted to them by Platinum LP……………..The execution of this agreement is a condition to closing the Transaction. It is expected that Fairmount and Mr. Jaeger will be paid approximately $11,250 and $6,250 per month, respectively, during the term of the proposed agreement, and each of them are eligible to receive up to 100% of the annual amounts of those payments.”
These options give the holders the right to buy a certain number of shares by a specific date at a specific price for only cents without regard to the market price. If the shares are “exercised” the company issues new stock. Likewise, there is the potential to increase the number of shares outstanding. I maybe wrong here but that brings up a number of 59 million shares on compensation in stock options that if exercised then it makes the crumbs (pardon me the shares) even of smaller value.
This situation causes the problem of how much to report for the earnings per share figure. Yes I know that those are two of EPS numbers: basic EPS and diluted EPS. The basic figure is the total earnings per share based on the number of shares outstanding at the time. The diluted EPS figure reveals the earnings per-share a business would have made if all stock options, warrants, convertibles, etc. were invoked and the additional shares increased the total shares outstanding.
Although PLRO may have 42,500.000 shares today it will have between 102,000.000 to 114,000.000 shares tomorrow at the closing of the merger, and of course, it may actually have the potential for many more million shares in 60 days and on and on and many more shares outstanding during the next year. Valuation on a per-share basis should reflect the potential dilution to each share. Although it is unlikely all of the potential shares will be issued [the stock market may suffer a huge dip next month, meaning a lot of executives won’t exercise the stock options, for example].
I think that it is important that we stop deceiving ourselves and value this business assuming all possible dilution that can take place and it will take place. So in this case I prefer to be very conservative, and I believe it means the difference between mediocre and spectacular returns on your investment or as I suspect here comes a much bigger loss that we have already sustained, unless “INVESTORS decide to ignore all the FUNDAMENTALS of Investment and they do something unexpected (as going just by price and volume and see if speculation kicks in) or we can always hope that a wand from Hogwarts or Dumbledore will come to the rescue. Once honesty settles in and allows us to reason about all these things, then we can see the picture more clearly. The company itself on the merger document said:
“You Will Suffer Immediate and Substantial Dilution of Your Percentage Equity
and Voting Interest….
Because the number of the Company shares to be issued under each of the Transaction is fixed, the actual value of the Company shares to be issued will not be known until the closing date.
.........The trading price of the Company's common stock fluctuates, and the trading
price at the time the transaction agreements were entered into may be greater or
less than the price at the time the Transaction closes. As a result, it is
possible that the Company may issue a large number of shares to the PRO
Transferors at a price that is below the trading price at the time of the
closing.

Regardless of the trading price on the closing date, the issuance of
55,000,000 shares to PRO Transferors will dilute the interests of existing
stockholders and could cause the trading price of the Company shares to decline.”

Well!! I did not want to point that out before because in all honesty I was hoping that people will try to save their investment and the stock will go up between Friday 13 and Thursday 19. The trouble is that if any “reasonable and intelligent investors” looks at all the factors and values this company putting aside the already BIG LOSSSES, then we can only conclude that the trading price of the company shares will decline. It does not have a chance with so many shares being created, diluted, distributed and shared. It seems like people really did not read the "merger". As I said about a month ago the right price is around fifty cents.

On top of that Mobil /Exxon, and Chevron are already selling their own anti wear and oil additives products and it is already on the market. A whole bunch of products such as amsoil and others are already in the market. New products from Siemens, and companies from Belgium, Poland, France and the United States are coming out with new innovative products with brand new patents, even with the new nano technology. So enough of the niceties and let us tell the truth. I know someone will accuse me of saying false things but I think I am being extremely accurate. So here are some links:

Vanderlube: http://www.rtvanderbilt.com/news_19.htm
Mobil: http://www.mobil.com/Australia-English/Lubes/PDS/GLXXENPVLMOMobil1_5W-50.asp
French product: http://cat.inist.fr/?aModele=afficheN&cpsidt=13572032
VA tech: http://www.physorg.com/news62919965.html
http://www.nrel.gov/docs/fy00osti/26729.pdf
Chevron: http://www.physorg.com/news62919965.html
AMzoil: http://www.amsoil.com/storefront/aw.aspx
A list of anti wear products : http://www.jax.com/products_greases.html

So for me is time to cut my losses and say adeu, von voyage, hasta la vista baby, come with me if you want to live………………. Then again I may go back in when it reaches 0.005 then it will be a better investment.