Updated: May 11 2010 9:18 PM EDT
Envision Solar (OTCQB:EVSI)
Summary: Envision Solar Intl is currently looking for money to pay the bills. They have assets that amount to no cash and office furnishings and they have liabilities in the millions. It is unclear why they are doing deals that are guaranteed to lose money. The stated purpose of going "public" on OTCBB is to obtain financing to pay said bills. Accumulated deficit: $13.2M. Market cap at $0.62/share: $32.4M with a license to print stock up to $100M.
Promoted by College Stock and Stock Guru News. College Stock says it was not paid by Envision Solar Intl.
From its website: "Envision Solar's mission is to bring aesthetically pleasing, efficient and affordable distributed solar power generation to the world." The executives are highly educated people (Harvard, Stanford, Columbia, Duke) with relevant skills. The company is delivering an interesting product and appears to be packaging the idea of solar for companies and individuals.
The problem with the company does not lie in its intentions but in its financials. They are losing money quickly. From the merger agreement:
Annual Net Income:2007: -$3,283,0002008: -$9,600,0002009: -$3,558,000Accumulated earnings: -$13,200,000 With no cash and no profits, they are using the stock liberally to pay for services and employees. In the annual report it is outlined that the directors and officers own 19,310,625 of stock and this amounts to 36% of the float. This indicates a current float of 52.3M shares and a market cap of $32.4 million at a stock price of $0.62 which is half what Google Finance is reporting. Also the company has authorized common stock of 162.5M shares so they can essentially continue printing stock as incentive and payment at will. If this stock is issued today the market cap becomes $100.6M.
What is the business like? In 2008 they paid $1.3M in materials and $1.4M to subcontractors for deals worth $2.4M. This amounted to -$477k in revenues BEFORE operating expenses. 80% of revenues came from 2 customers.
Formerly Casita Enterprises (CSTA), incorporated February 2007 and listed May 12, 2008. "While our goal was to market and sell computer installations and maintenance services to small and medium-sized businesses throughout Mexico, we were unsuccessful in developing that business." The merger agreement filings make it clear that Envision Solar has nothing to do with Casita Enterprises. The sole owner of Casita had no previous relationship with the current directors of Envision, and does not work for Envision in any capacity.
The purpose of the merger? To become a publicly traded company and therefore do a financing to cover 12 months expenses. "Pursuant to a plan of merger between Casita Enterprises and the Company, Envision expects to execute a merger agreement whereby it will become a wholly owned subsidiary of Casita Enterprises. Casita Enterprises is an over-the-counter-bulletin board listed company whose assets consist principally of cash and other miscellaneous assets. At the time of merger, which is expected to occur not later than February 11, 2010, Casita is expected to hold approximately $200,000 in cash. In addition, Envision, which will be a publicly traded company following the merger, expects to conduct a capital raising process whereby it will raise not less than $600,000. These funds are expected to be sufficient to cover monthly operating expenses as well as meet minimum payments with respect to the Company's liabilities over the next twelve months."
greencorecapital.com lists Envision Solar as a "portfolio company" because it raised $2M in capital in 2008. Greencore's CEO is Jay Potter who helped raise this capital. He holds NASD Series 7, 24, and 63 licenses.
Envision secures its 4,200 square feet in San Diego with a $100,000 convertible note at 10% due December 18, 2010. Why? Because the company has $1,034 in cash.
In the middle of the financial crisis the company issued a $591,771 promissory note to an investor, backed by ALL assets of the company. The interest rate was 7% in addition to a 15% "fee" of the amount. The note came due in May 2009 and Envision was unable to fulfill its obligations and the principal amount after multiple restructuring has spiraled to $657,194 convertible to stock at $0.33/share and a 20% default rate.
Disclosure: no position
Updated: May 11 2010 9:18 PM EDT