couple of comments concerning BRWC with share stru
Post# of 2290
Posted On: 02/22/2016 12:52:09 PM
couple of comments concerning BRWC with share structure and filings. i started buying at $0.0003 on a recommendation from a colleague and did so with little DD as we do trade suggestions back and forth. only have 5MM shares so it is relatively small in terms of money but i have been looking more seriously since the update of the UAE deal.
Current OS according to OTCMarkets is 4.261 BB and AS is 5BB. Per the recent 8K on the loan deal – if all warrants are exercised – that is another 330MM shares that would be added to OS and would put it at just under 4.6BB which isn’t much breathing room. Flip side – float is only 1.449BB as a lot of the dilution was from insiders.
Last three quarters of revenues show: at $604K, $591K and $531K. assuming 4Q15 followed this trend – that would be around $620K for annual revenues of $2.382MM. current market cap would be $0.0004 * 4.261BB of $1.704MM. assuming $2.4MM in annual revenues is a growing number (without UAE deal) and they would become profitable within 2-3quarters (based on current net income trend), this is trading at around 0.8 P/s which is pretty low. Granted, the lack of cash ($24K as of 9/30/15 prior to $250K loan), high OS/AS, and recent toxic debt aren’t helping credibility. Further, high AP/AR ratio and short term debt is a major strain and also questions viability going forward. On a total asset basis – the company is positive due to property and plant.
At a modest 4-10 P/s – this could well be trading between $0.0016 and $0.004 on any substantially positive UAE news. What really benefits this market/industry is the ridiculously high profit margins (92% based on 3/31/15 10Q). if revenues and deals quickly materialize, then cash flow will follow quickly alleviating the company of the strain. While the share structure will remain an issue, it will provide them significant flexibility in terms of restructuring through R/s or possibly buying back if share price remains heavily discounted.
Right now, they have executed a first right of refusal (last 8K filed) that will require $60K down and $600K total purchase to be finalized in May. I assume this had a large part to do with current $250K loan being finalized and would also suggest they needed the water stream for the UAE deal. If all of this is looked at together – than it does suggest that the UAE deal will be significant and a high probability of the lenders executing warrants at the $0.0075 range and price moving significantly past that.
I have been following stock closely and it looks like it is being patiently accumulated since the conversions have ceased and the UAE deal announced. Obviously a lot of past investors are exiting, sold for tax purposes, and/or adjusting cost bases going forward but the last three months, the money flow has been decidedly positive. While I did sell some at $0.0005, it was a mix of covering capital as well as needing cash quickly for another investment. Generally I am a long term investor and not a trader. I got into this with little DD originally based on a recommendation from a peer and really only started doing DD about 3 months ago and then more aggressively with the UAE announced. I just started looking to buy again but doing so tentatively. As several on here stated – the UAE could be a make or break period for the current class of investors. Without it, the company will more than likely need to increase AS and/or do a R/s to recapitalize. However, The non convertible deal finalized with significantly higher warrants and the down payment to buy property/water rights suggest the company is staging itself for significantly higher production and revenues.
Current OS according to OTCMarkets is 4.261 BB and AS is 5BB. Per the recent 8K on the loan deal – if all warrants are exercised – that is another 330MM shares that would be added to OS and would put it at just under 4.6BB which isn’t much breathing room. Flip side – float is only 1.449BB as a lot of the dilution was from insiders.
Last three quarters of revenues show: at $604K, $591K and $531K. assuming 4Q15 followed this trend – that would be around $620K for annual revenues of $2.382MM. current market cap would be $0.0004 * 4.261BB of $1.704MM. assuming $2.4MM in annual revenues is a growing number (without UAE deal) and they would become profitable within 2-3quarters (based on current net income trend), this is trading at around 0.8 P/s which is pretty low. Granted, the lack of cash ($24K as of 9/30/15 prior to $250K loan), high OS/AS, and recent toxic debt aren’t helping credibility. Further, high AP/AR ratio and short term debt is a major strain and also questions viability going forward. On a total asset basis – the company is positive due to property and plant.
At a modest 4-10 P/s – this could well be trading between $0.0016 and $0.004 on any substantially positive UAE news. What really benefits this market/industry is the ridiculously high profit margins (92% based on 3/31/15 10Q). if revenues and deals quickly materialize, then cash flow will follow quickly alleviating the company of the strain. While the share structure will remain an issue, it will provide them significant flexibility in terms of restructuring through R/s or possibly buying back if share price remains heavily discounted.
Right now, they have executed a first right of refusal (last 8K filed) that will require $60K down and $600K total purchase to be finalized in May. I assume this had a large part to do with current $250K loan being finalized and would also suggest they needed the water stream for the UAE deal. If all of this is looked at together – than it does suggest that the UAE deal will be significant and a high probability of the lenders executing warrants at the $0.0075 range and price moving significantly past that.
I have been following stock closely and it looks like it is being patiently accumulated since the conversions have ceased and the UAE deal announced. Obviously a lot of past investors are exiting, sold for tax purposes, and/or adjusting cost bases going forward but the last three months, the money flow has been decidedly positive. While I did sell some at $0.0005, it was a mix of covering capital as well as needing cash quickly for another investment. Generally I am a long term investor and not a trader. I got into this with little DD originally based on a recommendation from a peer and really only started doing DD about 3 months ago and then more aggressively with the UAE announced. I just started looking to buy again but doing so tentatively. As several on here stated – the UAE could be a make or break period for the current class of investors. Without it, the company will more than likely need to increase AS and/or do a R/s to recapitalize. However, The non convertible deal finalized with significantly higher warrants and the down payment to buy property/water rights suggest the company is staging itself for significantly higher production and revenues.
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