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Microcap & Penny Stocks : PanAmerican BanCorp (PABN) -- Ignore unavailable to you. Want to Upgrade?

To: PCModem who wrote (37003)	5/24/1999 9:16:00 PM
From: ISOMAN	Read Replies (1) \| Respond to of 43774

PC .... Stop making your posts so brief... Let it all out. Explain in detail what is on your mind.

To: PCModem who wrote (37003)	5/25/1999 2:57:00 AM
From: wonk	Read Replies (4) \| Respond to of 43774

You know PCM, reading through your response, I actually started to feel sorry for you. Either you truly are an innocent and do not know how these things work - or someone is giving you very bad guidance on how to support this - ahem - stock. I would agree that the CUSIP and symbol change are of no consequence. However, this statement was a whopper: I will say that the valuation question is beside the point because both PRWT and PanAm (NV) had no actual value (book value) that we know of, and even if they did, the buyer and the seller, in both instances, was the same person(s) -- John Schmitz. Valuation is NEVER pointless. Once two companies agree that there may be benefit of merging, the ONLY two issues of ANY consequence are valuation and control. Deals succeed or fail based upon valuation and control. Moreover, you've stated that the valuation question is beside the point - by your statement BOTH PRWT and PanAm (Nevada) had no ACTUAL value. Well, I would agree based upon the mathematics of the transaction. But lo and behold, what has everyone been buying these past 11 months - cotton candy - or stock in a company(ies) that had no value. This statement is lovely too. ... I would have had PanAm sell its assets (which I assume were mostly its business plan...) to PRWT for the shares. No need for a RM at all. EXACTLY. So what's the point of this "merger." Well I'll tell you - paper games. Let me walk you through the 2 possible scenarios: 1. We agree that for PanAm (Nevada) to reverse merge with PRWT, the mechanism of the transaction is that PRWT issues NEW shares to the owners/shareholders of the acquired company. We also agree, this did not initially happen. What did initially happen is that either: a. John Schmitz either individually or as part of a group purchased 400 million shares from shareholders of PRWT or b. PanAM (Nevada) purchased the 400 million block of shares from shareholders of PRWT. Just to be crystal clear, this purchase, regardless of who made it, put NO money into the coffers of PRWT. If Option A is what occurred, then we have PRWT - with John Schmitz et al as majority owners. THAT's IT. PanAm (Nevada), with owner(s) unknown except that Schmitz is listed as the President among other things in the Nevada corporate records, is a separate and UNAFFILIATED company. In this scenario, THERE IS NO LEGAL TIE BETWEEN the COMPANIES AT ALL, just common shareholders. If Option B is what occurred, i.e., PanAm (Nevada) purchased the shares, then PanAM (Nevada) has the ability to control PRWT. For accounting and SEC purposes, it would be considered a majority-owned subsidiary. See taft.law.uc.edu (I won't burden you with FASB statements) Again, as of yet there is NO merger. PanAM (Nevada) can retain or dispose of its interest as it sees fit. In either A or B, a merger neither has nor could have taken place - certainly legally - and that conclusion is butressed by the known facts of the share structure of PRWT. At this point, the owners of PanAm (Nevada) have received nothing, nada, zilch. In order to complete this merger: PRWT has to either pay cash or issue new shares or a combination of both for each an every outstanding share of PanAm (Nevada) - cash and/or shares equivalent in value to the fair market value of PanAm (Nevada). In option A, the cash or shares issued by PRWT would be relatively small since - as you so eloquently stated - all PanAm (Nevada) had was a business plan. Nevertheless, Schmitz et al, as majority owners of PRWT are deciding what to pay to themselves, the majority owners of PanAm (Nevada). In option B, the cash or shares issued by PRWT would be larger because PanAm (Nevada) would be holding an asset, the 400 million shares of PRWT. Consequently, the fair market value of PanAm (Nevada) would be larger. (Interesting question for you - would they pay PanAM (Nevada) at the booked value per PRWT share - I've heard the purchase price was $0.001 per share - or the current market price that PRWT was trading? Would one call this laundering the shares?) So PRWT (Schmitz et al) issues however many shares to the owners of PanAm (Nevada) (Schmitz et all) as the valuation demands, taking the 400 million shares (or whatever is left) back into the Treasury. These are the only legal ways that a merger could be done. In either case the authorized shares and the issued shares must increase just to effectuate the merger. The phrases one-for-one exchange or share for share exchange are non-sequitors, meaningless, they convey no information and are belied by the mathemetics of the transaction. So to cut to the heart of the matter, what's the company worth? It did not acquire anything of significant monetary value from PanAm (Nevada). That's demonstrated - by the math. It could not have raised any significant amounts of capital (read CASH). Why? Simply, because PRWT was worth only what a shell is worth and we've proven by the math that PanAm (Nevada) was damn near worthless based upon what the former PRWT paid for it (Remember PRWT had no cash and PRWT's issued share count has not increased significantly to support the conclusion that anything of value was purchased). Hence, by SIMPLE techniques of valuation, anyone putting NEW CASH into this business would demand LARGE equity ownership which would cause the share count to balloon majestically. The issued share count has not - at least in the amounts required - hence there's something rotten in the State of Denmark. That's proven by the math. Things of VALUE must be PAID for. Ever seen the The Sting? ww p.s. Sorry for the length - but it appears that people need a roadmap here.