Auric,
I've been lurking for a few weeks, just getting to know the
SI terrain. My current primary area of interest is in
exposing highly over-valued companies, preferably companies
with minimal sales, no earnings, run by individuals with
little or no track record. The more outlandish their
new widgets are, the better.
When these kinds of companies achieve loftly valuations, it is
usually only a matter of time before they self-destruct.
Here is one for consideration:
Lotus Pacific Inc. (LPFC OTC Bulletin Board)
1) The company has 47.3 million shares issued, not including 8
million warrants (strike price $3.00) and 1.09 million director options (strike price $6.00), along with 4,300 series A preferred
(any conversion terms unknown).
2) Of the above, 8 million were issued to insiders and associates for
cash consideration of $.001/share (not a typo!), 18 million issued for $.01/share, 10 million issued for $.50/share, and 3.1 issued for $1.00/share.
3) The company is a holding company for two subsidiaries
LPF International
is in the textile and apparel business, with sales of $4.8 million
and a net income of $90,000 for the year ending June 30, 1998.
Regent Electronics
has two primary products:
Wonder TV A6000, which, to quote the company (form 10KSB, filed with
sec on Sep 11, 1997)is an "all-in-one box system with combined
functions of a multimedia personal computer, a fax machine, a Karaoke
machine, an Internet box, an audio CD player, and an electronic game
machine". Patents pending in China.
Its other product, the TeleWeb system, is a "WWW broadcasting system to send the Internet contents and selected commercial information through existing cable TV networks". (source: form 10KSB filed Oct. 1 1998)Regent is also planning to enter the on-line arena in China,
with various plans for retail services and electronic commerce.
Regent lost $1.67 million last year on sales of $6.1 million.
4)Does anyone read the sec filings at Edgar? If so, they would read
about various strange non-arms-length transactions between insiders,
LPFC, and their subsidiary companies. For example, did you know that LPFC sold an interest in Rightiming Electronics on May 6, 1997, only to turn around and buy control of it on June 3, 1997 for $5 million, and 8 million shares of Regent?
5)The company had cash of $3.1 million at year end June 30, 1998, but
with 47 employees and various independent contractors and temporary
employees, and negative cash flow, it likely won't be long before the company does a further dilutive financing, or insiders start cashing existing options and warrants that are well in-the-money.
6)LPFC was a shell company which changed hands on January 28, 1997, and on that date James Yao, James Liu, and David Leung became executives and directors.
Did you know that three gentlemen with strikingly similar names (Albert Yao, Chen Liu, and David Leung) were directors of a Vancouver Stock Exchange company called Seacorp Properties? Seacorp (SEK.V) was delisted from the Vancouver Exchange on March 2, 1998 for non-payment of fees, last trade at $.03.
7) To my knowledge, the company has never issued a press release.
8) Just before the close today, the stock rocketed up over $3 on
light volume.
9) LPFC: fully diluted market cap is $644 million.
Any thoughts?
Surelock Homes
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