HQS Announces Another Offering?
Saw this on Yahoo MB:
SEATTLE, WA--(TP Newswire 8-22-2010).
HQ Sustainable Nightmaritime (HQSN), a leading consumer of investor cash, today announced a surprise follow on offering of 5 million shares of common stock priced at $2.00 per common share. An additional 800,000 shares will be available for over allotment. WTF Bank is acting as the sole underwriter for this transaction.
This offering will provide HQSN with approximately $9.3 million in net proceeds that will be used for debt repayment, capital expenditures, and general corporate purposes. HQSN’s CEO, Mr. Snowbert Spurns, justified the massive dilution as follows: “Our management team identified 10 reasons for an additional capital raise. This simply was too many reasons to ignore and we felt that we needed to act quickly.” Mr. Spurns added “The fact that we identified 10 reasons to raise capital now clearly supports management’s actions. The identified reasons for the current equity offering include:
1. It came to our attention that there are 800 tour buses that bring in over 20 million tourists daily in some parts of China. This underscores our basic business thesis that there is a @#$%load of people in China.
2. With an average of more than 25,000 tourists packed into each bus tighter than a pond full of tilapia, we concluded they can’t all fit in the usual cultural and historical tourist sites. We expect the spillover tourists to hang out at nutraceutical and bio-marine product stores to replenish their pockets full of shark fins and fish liver pills.
3. Existing cash is allocated to other capital projects that are not expected to ever generate any significant cash flow – just like our previous capital projects. Therefore, we need additional cash to strike rapidly while China’s population remains large and tourists continue to be unbelievably and densely packed in buses. This business opportunity will not last forever.
4. The additional cash will allow us to further vertically integrate our operation through innovative downstream capital deployment. In addition to our rapid expansion of nutraceutical and bio-marine market stalls placed throughout China’s many outdoor markets (referred to as our superstores), HQSN will extend even further downstream by hiring local Chinese consumers to shop in its stores. This innovative initiative is expected to immediately increase HQSN’s sales and provide a new platform for sales growth. Everybody knows that, when it comes to sales, more is better.
5. Ms. FU, HQSN’s founder, chairman, and largest shareholder, has an extended family that needs a new fleet of Mercedes and this company is not generating enough cash to meet this important need. We don’t want the densely packed tourists to see Ms. FU’s family drive older model cars.
6. The capital raise fits within HQSN’s previously announced Shareholder’s Value Reduction (SVR) Program. This program provides our investors important relief from paying capital gains taxes.
7. With a stock price that traded more than $14/share in 2007, the current capital raise accelerates our SVR Program and we believe it now places HQSN’s SVR achievement at greater than 98 percent of all US-listed Chinese companies. This remarkable achievement will attract a new crop of bottom-feeding investors necessary to sustain our SVR Program.
8. We are now within striking distance of being de-listed. If we achieve our goal of once again trading as an OTC stock, we will not need to comply with the same level of reporting requirements. This will result in cost savings, and more importantly, allow us to reduce the transparency of our cash flow deployment. Therefore, we won’t have to work as hard to identify reasons for capital raises in the future. And everybody knows that, when it comes to cost savings and murky cash deployment, more is better.
9. With each capital raise, we are increasing the number of shares available for purchase. And everybody knows that, when it comes to share count, more is better.
10. We simply could not resist the opportunity to demonstrate our SVR Program to our latest shareholders that purchased the previous equity offering at $3.60/share. By acting so quickly and decisively, we believe that we will prevent them from ever experiencing the pain of paying capital gains taxes on our stock.”
Mr. Snowbert Spurns also added “HQSN is pleased to announce that we retained FU Advisors, an affiliated company owned separately by Ms. FU, to spend $1.3 million to study the potential benefit of further increasing the tourist density on buses. We expect that as buses are increasingly packed with hygiene-challenged tourists, they will seek extended time outside the buses and will be more likely to shop at the outdoor markets where we are expanding. We believe that HQSN is the first to identify this important potential market driver and the we are uniquely positioned to exploit this opportunity. FU Advisors’ mathematical model suggests that by simply purchasing and scrapping 200 tour buses, the tourist density on each bus would increase by as much as 33 percent!” Mr. Spurns also noted that “At $75,000 U.S. per tour bus, we would only need to raise another $15 million in capital to execute this market building approach. We look forward to reporting to our shareholders on the results of this exciting and valuable study in the future.”
