Correction (my mistake): LPH virtual presentation is Wed. 4/20 8:00 am)
As I posted yesterday, after the virtual conference presentation, Mr. Toups will be taking questions from callers. After todays news, I encourage all serious LPH investors to take the time to call in and ask your questions. I plan on asking two questions:
1. The company announced the forthcoming new website, which in part is to; "Our new website design will provide investors with easy access to key information including current news and events, corporate governance and regulatory documents, stock and financial data, and other shareholder resources." Will this include the company's SAIC filings?
2. Will the company include, in part, a shelf offering, to pay the balance for the acquisition?
If you cannot, or do not wish to call, please give me your suggestions to improve my two questions.
"...2. Will the company include, in part, a shelf offering, to pay the balance for the acquisition?..."
Here's my suggestion to improve this question (Sorry - you asked!)
Your basic concern is obviously over the issue of dilution. But why limit Toups response to a shelf offering? He's just going to deny it. Toups prints shares - always has and always will. The entire question is pointless.
I don't know how longs can be so oblivious to Toups background. Even Chen came to his senses about something fishy going on around here but never stumbled over Toups and Midtown Partners - everyone's favorite death-spiral PIPE shills. Toups was the managing partner of the Chiscam - er, 'Asia Investment Banking' arm of Midtown from somewhere back around 2007 until his recent career as serial-CFO. But then again, he's still listed on Midtown China's 2011 lame web site ( http://www.midtownpartnerschina.com ) as a managing director. Which brings up my first suggested question for Toups:
1. Today, you get $10K a month for being the LPH CFO, $10K a month for being the WEMU CFO, and $6K a month for being the CBLY CFO, shares from all of them and God knows what from MidScam Partners. Are you taking some kind of CFO steriods? Are you worth it?
Now, back to Midtown. Face value nothing but a penny-pumper PIPE outfit worthy of general disdain. BUT they were involved in an extremely questionable relationship with the now-collapsed Vicis Capital back around 2008. Midtown would run a PIPE for some little BB company and hook up Vicis for a chunk of the stock. Vicis would (supposedly) immediately either manipulate or short the bejesus out of the unfortunate company. Do a search on Vicus and Midtown for the gory details.
Vicis collapsed, the FBI investigated and the best they could do was bust the managing director, Christopher Phillips, for wire fraud. Oh yeah, Mr. Phillips ran Midtown Parnters until around 2007 before he left to run Vicis. So, for Toups:
2. Do you still really work for Midtown? If so, do you have any plans to Vicis-ize LPH during the next round of dilution? Note: Vicis-izaton looks somehting like this:
I tossed in WEMU and CBLY (no business with Midtown that I know of) just for comparison.
Sorry - should have pointed out that those are a chunk of the PIPEs that Midtown ran back around 2008. I can't add the bankrupt or delisted companies of course, but I think the trend is pretty clear.
The fact that they had PIPEs isn't really an issue and wouldn't necessarily be for LPH. The fact that they had PIPEs *through* Midtown and probably on to Vicis is the point. Vicis is history and Midtown won't be involved in LPH.
I have little doubt that Toups will print more shares. Longs should't waste their time worraying about the inevitable. You should be *very* worried about where those new shares end up and what that means for Longwei.
The SAIC records are publicly accessible and meant for enterprise registration, so it is really not that useful.
Instead, ask the LPH management to post SAT (State Administration of Taxation) record online to show how much income tax LPH had paid.
Obviously, if LPH would not comply with this request it would only mean LPH have something to hide.
Clae - sorry to do this to you, but these are the questions I would be asking next week if I wasn't on that plane, and these would be what I would also ask at the CC next month. Cheers. CB
The reason LPH's pps is currently trading well below book value, is because the company is currently being judged "guilty by association", with regards to the significant instances of accounting irregularities and outright fraud being uncovered, at many other companies in the China small cap / RTO space.
I am mystified at why LPH is not getting out in front of this crisis, by providing its shareholders and the greater investment community at large, with the clarity required to rise above this "crisis of confidence".
With that in mind I have a number of questions:
a) Given the outstanding reported and forecasted financials, there is NO obvious reason to dilute further. Suspicion of fraud in this space, is significantly increased when a company attempts dilution financing, when it is not required under typically recognized business practices. Why doesn't LPH simply announce they will 100% finance this important acquisition, and not consider any dilution financing at any price??
b) A top 6 auditor, combined with SOX 404 compliance would immediately put to rest any question of sketchy accounting and issues of ownership (who owns what) at LPH. Why is the company not immediately announcing and unequivocally fast tracking this, in order to be considered a viable investment for institutional investors?
c) There appears to be no references to either Shanxi Jiangtong Chemical, or Haujie Petroleum, in any typically available databases. Who exactly are these companies? Where exactly are they located? Why are they selling their petroleum storage assets? Why is the PRC involved in the sale as announced in the PR?
d) At last earnings report, there was $86MM in cash advances provided to suppliers for future purchases and supply at preferred pricing and availability. Can you itemize and quantify which suppliers were/are in receipt of these funds, and where they are located?
e) Who are the current Directors of LPH?
f) Your predecessor at LPH, has recently been implicated in, and disciplined for a number of allegedly fraudulent activities. He is also currently the CFO of a company who has since been accused of misleading and defrauding shareholders. Are you concerned over what may come to light during his tenure at LPH? What actions are you currently undertaking to ensure there are no surprises that come to light during his tenure at LPH?
CB, thanks for taking the time to detail your questions. Depending on the number of questions the moderator will allow each person, I hope to cover your A and B questions.
Concerning your C question, I think I already got an answer to that. It may not be a good answer, but it is Redchips' answer. Last week when I called RC, I asked Mike, for the sake of investor's confidence, why LPH did not release more info regarding the acquisition. I cannot quote his respone, but it was along the line that LPH has competitors, not only for this acquisition, but for other, future acquisitions. And to, at this point in time, release any more details than what have already been given, would be counterproductive, giving the competitors an edge.
Makes sense to me.