Concerning the $1,200,000 in additional equity financing from Northlake Equities Ltd and now Medford Financial as detailed in the 8K reports dated 6/21/2010 and 7/1/2010 respectively in exchange for a total of 1,200,000 shares of PBEC’s common stock.
Looking at the impact of this transaction on the company’s net assets of minus $34,000 as of 3/31/2010, I would calculate book vale per common share to be about $.03/share – for a premium to book of about 3900%. ($1.17/.03)
This based on net assets of $1,14600* and 38,700,000 common shares outstanding.
*My estimate – based on adjusting entries to the 3/31 2nd qtr. balance sheet of:
1. $20, 000 M&A estimate (mine) expense incurred in the third quarter – reduction to cash (Asset) and retained earning (Eq)
2. $880, 000 increase to cash asset (Asset) - Net effect liquidating payable and M&A expense
3. $300,000 carrying value of land (liquidation of the payable for the 154 acre site assumed) (Long Term Asset)
4. $12000 increase to par value common stock (1,200,000 X .01) (Eq)
5. $1,188,000 increase to capital surplus (Eq)
6. Concerning the $2,164,773 payment from Foresight Energy – this is a contingency and can’t be booked as a receivable – not just yet anyway.
Herein lay the difficulties of placing too great an emphasis on single elements of a company’s interim events between quarterly FS reports. Just saying.
The premium you are paying is a bet that PBEC’s management can cobble to the deal to pull off a major solar fund project.
How big of a deal do they need to put together a solar energy project of the scope they talk about?
From what I can figure out going on the web commercial development of solar costs about $4 to $5 million per megawatt. Figure in a development scope of 15 MW project and your looking at least $60,000,000.
Here are some links for your edification and reading pleasure:
Not trying to bash here just trying to get to the pertinent details. Risks should be commensurate with potential returns.
Have a great fourth!
Thanks - good comments and for you longs, good luck - I have no position as yet and probably won't. I believe that the market in general is headed lower, and I generally look at higher cap stocks. Here's another link for your reading pleasure:
yahoo apparently thinks my reply is spam and won't show up.
i basically said, yes you are correct. paying a premium for possible reward. it makes sense so long as reward ratio outweighs risk ratio
"How big of a deal do they need to put together a solar energy project of the scope they talk about?"
-doesn't read quite as clearly, could be interpreted to mean several things. but they need a total of 165MW in PPA's to reach their maximum pipeline for solar. demand is certainly there with RPS standards (over 1500MW demand). Supply remains (even with projects in works) under 1000MW. And APS is still biding new projects 15MW at a time.
The bottom line is they have a good probability of signing a deal with the team they have assembled. Siliken, Patriot, Foresight, GreenbergTraurig, top 4 accounting + tax, Buckingham- the majority are majors in the industry who have secured hundreds of MW's in contracts already.
And the reward is certainly there. A 15MW deal would instantly justify the price we are now, with the potential to sign another 150MW on top of that (1,000% gain).
So, your risk is "can a team like that sign at least 30MW of solar, and possibly a maximum of 165MW?".
And the reward is, "If they can, the reward is at least 100% gain, and possibly a maximum of 1,000% gain".
If that makes sense to your portfolio, they purchase PBEC. If it does not... then don't purchase PBEC.
I can't stress enough: charliebarely345's post is an example to everyone else on this board. Even bashers: despite your posting history, if you post reasonable posts showing your work and sources: you will also be rated 5-stars.
However, those that post misinformation with no logic, reasoning or sources will be rated 1-star.
The Standard Setter
rated 5 stars, despite his opinion-
it was arrived through an accurate thought process, which he showed his work for.
in the world we live, this merits a 5-star-rating. That process is the basis for how our entire technological and investment structure was made successful.
charliebarely345, even though I am long on the stock, that was an excellent post and I rated it 5-stars.