SAVW - getting ready for the next big round of debt Note conversions? http://ih.advfn.com/p.php?pid=nmona&article=49399659&symbol=SAVW SavWatt Engages Investor Relations Firm
Date : 10/03/2011 @ 5:54PM
SavWatt USA, Inc. (OTCBB: SAVW), pioneers in LED lighting and the Green Revolution, announced today the engagement of CSIR Group, LLC. (CSIR) to assist the Company in attracting new investors and communicating its corporate strategy to shareholders and the investment community.
CSIR Group, LLC is based out of New York http://www.csirgroup.com/ http://www.linkedin.com/pub/stacey-yonkus/6/823/38a
From January 1, 2011 - March 31, 2011 SAVW issued 129,002,040 free trading common shares towards convertible debt Notes all at an average of around 50% below the market price.
From April 1, 2011 - July 19, 2011 SAVW issued 1,047,961,300 free trading common shares towards convertible debt Notes
all at an average of around 50% below the market price.
Many of those 1,047,961,300 shares were issued in connection to a debt Note assigned to Frank Kristan the CEO of the shell under its former name, Ludvik Capital, Inc
In 2006 the shell entered into an advisory agreement with Ludvik Nominees Pty Ltd, a company owned by Frank Kristan. Under the advisory agreement Frank Kristan was compensated $30,000 a month. Frank Kristan never received any cash and it accumulated and collected interest. On June 30, 2010 when Frank Kristan stepped down he was owed a balance of $1,503,167 which went on the SAVW balance sheet as a shareholder loan.
The $1,503,167 balance was determined the following way:
Advisory Fees $ 1,260,000
Accrued Interest 727,417
Value of shares issued for payment (484,250)
According to the filings Frank Kristan has been taking chunks of the debt and assigned it to other investors a little bit at a time - probably because as a former CEO there may be some restrictions on him receiving and selling free trading stock. Maybe those other investors were family members or close friends willing to sell the shares for him?
Since January 1, 2011 that shareholder loan has been getting transferred into a convertible Debt Note a little bit at a time.
The terms of the convertible debt Note allow Frank Kristan to convert the debt into free trading discounted shares of SAVW stock which ends up being around 50% below the market price. The debt Notes are converted in small chunks to keep share ownership for Frank Kristan below reporting levels then dumped into the market right away so that Frank Kristan can get his next round of free trading shares.
The $1,503,167 owed to Frank Kristan shows up on the balance sheet in the 10Q for the period ending June 30, 2010
as a convertible loan payable to a shareholder
On the balance sheet for the 10Q for the period ending September 30, 2010
is still shows up as a $1,503,167 convertible loan payable to a shareholder but the balance sheet now shows $112,738 in interest owed to a shareholder (interest that unpaid convertible loan has collected).
During the last quarter of 2010, Frank Kristan converted $173,469 of his debt Note into 18,374,278 free trading shares of SAVW stock
The 10K for 2010
shows the interest on the Note has grown to $175,596. The principal balance is reduced to $1,329,698 which is split up into two lines on the balance sheet - $1,129,698 is still listed as a shareholder loan and $200,000 is listed as a convertible debt Note.
As of June 30, 2011 the interest owed on the Note had grown to $212,566 and the overall balance on the Note still totaled $1,196,461.
The issuing of over 1,000,000,000 shares between January 1, 2011 and June 30, 2011 did very little to handle the debt situation.
The overall amount owed in Debt Notes, loans, and interest by SAVW actually grew from $2,059,894 on January 1, 2011 to $2,378,145 on June 30, 2011.
That's a scary thought - that over 1,000,000,000 shares can be issued towards debts and the debts actually grew larger overall.
With $2,378,145 owed it would take over 2.7 billion shares to eliminate all the debts and interest owed at the current share price. With a total of only $20,134 in revenues total during the entire history of the SAVW shell going all the way back to October 20, 2006 there are no real signs of this trend ever changing. So since SAVW keeps seeing its expenses owed grow and new loans and debts added 2.7 billion shares are a far cry from the future dilution that the SAVW shareholders will end up seeing.
The outstanding count has grown like crazy since January 1, 2011
January 1, 2011 - 167,531,786 outstanding shares
March 31, 2011 - 307,133,826 outstanding shares
April 13, 2011 - 371,089,237 outstanding shares
May 19, 2011 - 669,761,367 outstanding shares
June 30, 2011 - 1,212,239,126 outstanding shares
August 22, 2011 - 1,761,413,832 outstanding shares
The outstanding share count must have hit 2,000,000,000 because on September 21, 2011 SAVW raised the Authorized share count to 4,800,000,000.
So here is the situation. Despite issuing over 1 billion free trading shares towards debt Notes between January 1, 2011 - June 30, 2011, SAVW still had $2,378,145 in convertible Debt Notes, loans, and interest owed due. The current outstanding share count has grown to around 2,000,000,000.
Things had been relatively quiet volume wise for SAVW over the past month with the limited dumping, but all signs are pointing to the dumping picking back up again.
SAVW just recently authorized an additional 2,800,000,000.
The recent increase in authorized shares to 4,800,000,000 was followed by an announcement by the Company that they were looking to attract more investors. Combine those two events together and it spells out one thing. A fresh round of debt Note conversion and major share dumping could be on the way. Anybody that thinks that now is a good time to buy SAVW should probably consider taking profits when and if they become available - the next big round of dumping could send SAVW into the triple zereos.