So let's try again to look at how PRWT is going to use it's equity to acquire other companies. It's been more than 150 posts here since I posted most of this and all there is to show for it is banality and backbiting. I realize that it is a challenge to actually discuss this stock. But hey, who knows, maybe you could actually figure out something if you really try. So here it goes again:
When a company sells stock at the IPO the sales of those shares come to the company on the asset side as cash and under the Stockholder's Equity side, as Paid in Capital.
Since those shares are sold to individuals that are not a part of the company, then subsequent sales of those shares goes between buyer and seller.
With these acquisitions that PRWT is talking about the purchases for shares would necessarily come from the company itself, in the form of new shares issued or shares in the treasury. Of course with the company refusing to file financials, no one really knows who owns what shares, except for the insiders.
Rumor has it that there are 209M shares in the float that 400M are controlled by the
insiders and that 141M remain authorized and yet to be used for acquisitions (there are
750 million authorized). There is a rather odd notion that these 400 million shares can be
used for acquisitions, but no one wants to recognize here that those shares are already
owned by insiders and not by the company and so would not be used in this manner.
Others have suggested in the past that cash would be used, but there was no apparent
cash in the shell when it was purchased (the 400M controlling interest held by the
insiders). So unless there is a philanthropy that gives money to small withering
companies, this cash is unlikely to appear. And there are no apparent assets, so
borrowing to raise cash is also not likely.
But there does abound an abiding faith among the faithful that these problems don't
exist, and that with these remaining 141M shares, representing market value of $2.8M
can somehow be exchanged for a Realty Mortgage Centers, PanAmerica Health,
acquisition of NHLT, and now a Bank in Costa Rica called Consorcio Bantec.
Or alternatively since these things can't possibly be acquired with such a pauper's purse,
that there will be a combination of these assets into a new entity in which current
shareholders will receive redistributed shares of a new entity. But with the apparent
commitment to being Nasdaq listed, you can imagine the reverse ratio that this
"redistribution" will bring. I reckon this to be greater than 300:1 for current shareholders.
But the question of equity and just what the shares represent is still a good one.
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