Tuesday, September 06, 2005
Capital Solutions I (CSON)
Here's a company with nothing more than $41 in cash as assets and over half a million dollars in current liabilities as of its Q3. They have 289 million shares outstanding. They issued a pile more shares to father and son officers/directors and then acquired "Bedrock" for 300 million shares (worth apparently $21,000 plus there's some sort of enterprise value sorta calculation*), now they're acquiring a gasoline distribution company (last year distributed 50 million gallons) in south Florida for $46 million. This sent shares up to (split adjusted, see below) $2.50 for a while and it's been deflating since then. After that, the company guaranteed that those two guys would not be diluted to less than controlling interest in the company, 51%.
10-K
There's an existing standby equity distribution agreement (SEDA) with Cornell Capital Partners. If some registration is successful regarding Cornell reselling the stock, the Company has the right to receive up to $6 million from Cornell as debt financing which can be repaid in CSON stock. The amount of stock will be the lowest closing bid of the stock in the last 5 trading days after the company requests the cash. There's also a 4% fee.
A former company subsidiary didn't complete some Florida apartment construction project. There were issues, but it seems resolved beyond any usefulness to anyone.
They did another reverse stock split (did a 1:50 in 2004) 1:10, resulting in 78.4 million shares.
* enterprise sorta thing:
Ok, so the company acquires Bedrock for 300,000,000 shares which have a market value of $21,000 based on a recent stock price. The company has an equity deficit of $70,970. This makes the purchase price equivalent to $91,970. I have to admit that I really don't follow it. I'm tired or maybe I'm just not that intelligent.
It's just a view into some mundane business activities, that's all.
10-K
There's an existing standby equity distribution agreement (SEDA) with Cornell Capital Partners. If some registration is successful regarding Cornell reselling the stock, the Company has the right to receive up to $6 million from Cornell as debt financing which can be repaid in CSON stock. The amount of stock will be the lowest closing bid of the stock in the last 5 trading days after the company requests the cash. There's also a 4% fee.
A former company subsidiary didn't complete some Florida apartment construction project. There were issues, but it seems resolved beyond any usefulness to anyone.
They did another reverse stock split (did a 1:50 in 2004) 1:10, resulting in 78.4 million shares.
* enterprise sorta thing:
Ok, so the company acquires Bedrock for 300,000,000 shares which have a market value of $21,000 based on a recent stock price. The company has an equity deficit of $70,970. This makes the purchase price equivalent to $91,970. I have to admit that I really don't follow it. I'm tired or maybe I'm just not that intelligent.
It's just a view into some mundane business activities, that's all.
// posted by Bruce @ 8:00 PM 
