Hi Jeff,
Welcome aboard. I think Gerald took OTS to CECN because OTS was in
a VERY SAD state of affairs in 1995/1996. Read the latest 10Q for
OTS on Edgar. It had no hope of ever even applying for a listing on
the Nasdaq SmallCap as near as I can tell, but CEC, by way of the
grandfather clause, could re-acquire such a listing that it lost in
August of 1995, I believe. So more than anything, CEC it could be
argued, provided a better 'transport' through which certain goals
might be achieved more quickly.
OTS actually is a publicly traded company on the BB (OTSH) with over
three hundred share holders, so when Gerald got the properties
through OTS, they really belonged to OTS, the company and its
shareholders, not Gerald personally. In that sense I don't think
anything was really given up during the stock swap, but it troubles
me that some 8.6 million common AND 8.6 million convertible
preferred CEC were needed to do the deal. I can understand the
preferred--this allows you to gain control via voting rights. A
portion of the common became what is now the float and I think
Gerald was forced to go this route in order to liquidate Stocklein's
3 million odd shares. He had to in order to comply with the Nasdaq
Qualifications committee in an attempt to re-list.
As the company shores up its infrastructure and finds the expertise
to manage its immense asset base and also acquires individuals to
handle Investor Relations, it will indeed resurrect itself. If you
consider the coal alone there are 52 million tons of RECOVERABLE
reserves of which 37 million can be surface-mined. That does not
mean the other 15 million tons will be left in the ground. Given
the increasing demand for low-sulphur coal, particularly in India
and Asia today, and that South Africa along with Australia are the
two leading exporters of coal, and that South Africa's currency is
dwindling vis-a-vis the U.S. dollar, I think they would be only too
happy to extract every last ounce.
Unlike most equities you read about in penny forums such as Stockman,
Waaco and SI, I think CEC stands on higher ground. Most of those
companies do not have this kind of an asset base; indeed most have
little of anything, but do provide the fuel for a lot of gossip and
chatter.
Embrace CEC. See what you can do to build it up. The 10K on Edgar
actually represents the state of affairs BEFORE Gerald took over,
which was April 1, 1996. It is a document I have read end-to-end at
least twice and I am satisfied that since then there have been
changes for the better.
Regards...JIm |
