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Microcap & Penny Stocks : HITSGALORE.COM (HITT)
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To: Janice Shell who wrote (4313)10/3/1999 4:59:00 PM
From: Q.  Read Replies (2) of 7056
 
There is an inconsistency in the description of these assets that bothers me.

"Production rights" sounds like an equity, whereas "promissory notes" sound like debt. A trust could hold either one, and it would be an asset, but why is the trust apparently flip-flopping in its description?

In its news release, LFT said:
Life Foundation Trust owns the Production Rights to several producing oil and gas leases in Central Texas. With the recent increase in the price of oil and gas, the production on these leases created a cash flow of over $1.5 million this past month.

These prime oil and gas fields in Central Texas have proven reserves


That sounds like an equity doesn't it?

Compare to the following, from HITT's 10Q:


LFT has delivered to the Company a
Subscription Agreement and Investment Representations for the shares that is
contingent only upon an increase in the Company's authorized shares and due
diligence to the Company's satisfaction on a $900.0 million Promissory Oil
Production Note to be delivered as collateral for LFT's obligation to pay the
purchase price. The Company's security interest in the note is to be limited
to $100.0 million and is to be an undivided interest with LFT, who has agreed
to permit the Company to receive the first $100.0 million paid under the note.

That sounds more like debt, doesn't it?

Of course, as you say, "sweet crude BS" might be yet a third way to describe this asset. Something similar in quality to an investment in a HYIP, let's say.

This is just so confusing.
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