Good questions, Ken. Call Bob Smith, he is chief financial officer and a very personable individual. He will call you back.
My take: the purchase price is in 3 parts: (i) convertible preferred (to be worth 5.2mm common of ESVS), (ii) about $12mm for additional preferred for SIM faction, and (iii) about $6mm for assumption of debt. With today's values, the total package is worth about $25mm, not $30mm.
The .58 per share in the press release is TOTALLY BOGUS!!!!!!!!!!!! I am VERY disappointed that P.T. refers to it - he is confused or mistaken (I hope). An equivalent value for coming up with .58 per common would be to say the assets are worth about $30mm for everyone named Pattison Hayton associated with Zulu-Tek. Now, what does that tell you? Nothing. The Zulu common do not get all of the $30mm or $25mm being paid, so why take the 52 million shares, divide by the total asset purchase price, and come up with .58 per common. TOTALLY BOGUS!!!!!!!
The $25mm/$30mm question: how and when is the ESVS convertible preferred to get into the hands of the Zulu common stockholders. Is this a partial distribution of assets to the common stockholders? Or, a dividend when the company has no income to distribute? A huge mystery, which maybe Bob Smith can help us with.
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