ATTENTION SHAREHOLDERS: In addition to my stock certificates, I received a proxy statement today.
There is too much information for me to digest in this short period of time and I am not clear on a good deal of the financial information without having questions answered from the company.
First, the information about the shares outstanding. I do not understand all the information provided and I would imagine that the form 10 filing will clarify this information. As stated in the proxy statement prepared for shareholders of record on November 20, 1997:
... there are now 22,881,936 shares outstanding, of which 11,737,624 are restricted shares.
As stated in the "Dear Shareholder" letter from H.K. Elrod:
If, however, the issuance of new shares results in the acquisition of new assets or services whose value to the Company exceeds the effect of the dilution, then the increased number of fully diluted shares is not deleterious to shareholders. Under the proper circumstances, the addition of shares will bring VITAL capital that will UNLOCK company value and dramatically increase shareholder value as well as increasing the overall market liquidity. Management feels that its recent acquisitions reflect this philosophy at its optimum.
We will need to get a clearer understanding on the breakdown of the additional shares before we come to any conclusions.
In addition, the company has issued warrants which may or may not be reflected in the outstanding shares. These need to be clarified.
The information about each of the 4 subsidiaries looks great:
The company will receive 495,000 shares of ERHC restricted stock guaranteed at least $2 per share from the sale of Uinta Oil & Gas along with elimination of $677,000 in debt. In addition, 185,000 shares of CSMA stock was returned and approximately $25,000 per month of operating deficit were removed.
In addition to the information previously released, AdHaTTeRs (tm) has the signing of two major southern CA chains (that have hundreds of stores) to the growing client list. The new Dream Catcher could easily double the company's (Ad-HaTTeRs) overall sales projected for the next 12 months. Also, product marketing is in the hands of Dennis Stilwell (15 years experience with Wal-Mart) (italics mine). Remember the automotive senior buyer for Wal-Mart? Is there a cause and effect here?
Coconino Oil & Gas will take awhile before we see real action:
There are several prospects under current evaluation which are typical of what may soon comprise the CO&G portfolio. ...
Enviro-Tec information verifies what was diseminated on the thread:
... the well capacity of 7500 barrels per day would achieve $19,687,500 per year on a 250-day production calendar at only twenty-five cents per gallon. ... just this entity alone, when in fully permitted operation next spring, could be a very sound reason for expecting per share prices to again soar into double digits.
Their words, not mine. And they are basing the per share price on a charge of twenty-five cents per gallon rather than the average 50 cents per gallon that they can charge. There will NOT be any great increase in projected operating costs, which ten thousand dollars per month would be on the high side.
LPSL potential:
Successful implementation of marketing plan will result in gross profit of 1.4 million dollars the first 12 months.
By month 8, the company (LPSL) plans to break even. At that point. earnings of .10 per share could be realized.
If the 12 month sales volume is achieved and maintained, the next 12 months earnings should be in excess of .40 per share.
This last statement seems to refer to the 12 months earnings AFTER the first 12 months. I just want to clarify that.
What will we have with Coconino in 1998? It looks like we will have a company where at least 3 of the 4 subsidiaries will be doing great! While the number of outstanding shares would seem to be a disappointment, let's put everything in perspective on what this company is going to do for us next year!
David Smith |
