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Microcap & Penny Stocks : TNRG Tianrong Building Materials -- Ignore unavailable to you. Want to Upgrade?

To: O'Brien who wrote (2690)	6/28/1998 11:30:00 PM
From: Sigmund	Read Replies (1) \| Respond to of 9824

Shopping center. It needs to be paid for. Has the money been raised? What interest rate is being paid? If this was not announced, I doubt that the owner of the shopping center turned the asset over with a promise to be paid. The $5MM in profits assumes you own it free and clear. But since this is borrowed money, the cost of capital ie interest needs to be factored in. Then there is depreciation and it was not clear how that was handled by the prior owners. TNRG will have to use U.S. accounting standards I assume which means that depreciation will reduce income for reporting purposes. Of course knowledgeable investors will look at the cash flow rather than the income for this real estate venture. Someone has since posted that the debt has been issued and pays 8%. If I recall correctly, that will then be more or less a wash as 8% of the purchase price I think is $5MM. This may still be a good deal if the real estate becomes more valuable and if the income can be improved operationally. But I don't think it will contribute to earnings initially in any meaningful way based on the information available. The other venture I am sure also have expenses and there is a corporate expense. So I still question the assumption that there will be positive earnings. The share cancellation may impact earnings but I have no idea how that might work. It may be a positive if earnings were charged when the shares were issued. Development stage companies usually are not able to have positive earnings while they are developing. So positive "real" earnings by this company would be a very good sign.