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Roadkill: Integrated Freight Corp.

Well, it does not get much worse than this.  Shares of Integrated Freight Corp. (OTC Pink: IFCR) actually had no bid for a short time in March.  It has not recovered much since that time.  When the market closed today there were approximately 750 thousand bid at $0.0001 and 323.62 million shares on the ask at $0.0002.  This certainly qualifies IFCR as roadkill.  Stock prices do not get much lower and generally shares trading at this level are not even worth a first look.  However, IFCR may be a little different and don’t forget I said MAY BE.

Before I go any further, let me say that this stock is not for most investors.   You must go into this adventure assuming there is a high probability you are going to lose all of your capital.  Therefore, unless you have it to lose, you can stop reading and forget that you ever saw this ticker. [click to continue…]

Shares of Fortune Industries Just Became a Little More Difficult to Come By

Over the last year shares of Fortune Industries, Inc. (OTC Pink: FDVF) have traded routinely between $0.20 – $0.30 per share.  In most cases, the ask was always below $0.30.  That all changed today.  While the spread on the shares has never been tight due to the limited number in the public float, the spread became seemingly exaggerated today.  Early in the trading day 2,000 shares traded at $0.269.  However, after that trade, the bid/ask expanded to 28,000 bid at $0.27 and 7,300 ask at $0.599.

It may just mean the number of investors willing to sell has temporarily dried up and we will see the bid/ask normalize once again.  On the other hand, it could be investors have finally figured out shares trading below $0.30 severely undervalues this company.  Time will tell, but I believe the current ask is much closer to a fair value.

Disclosure: The author owned shares of FDVF at the time this article was published.

Investors in Wilshire Enterprises get a Win and have John Alvey to Thank

Wilshire Enterprises, Inc. (OTC Pink: WLSE) announced today the merger agreement with J&J Brothers Holdings Inc. (J&J) was amended to provide stockholders consideration of $3.38 per share which is more than double the original amount of a measly $1.50 per share.  According to the press release, the deal was approved by Wilshire stockholders at the special meeting on February 18, 2016 and the merger with J&J has been consummated.  Wilshire stockholders should expect payment for their shares in short order. 

However, it should be known that without a letter sent by John Alvey and Bond Purchase L.L.C., the management of Wilshire would have likely been able to pull off this heist at the special low price of $1.50 per share.  Instead, they were forced to the table with Bond Purchase and the outcome is shareholders at least receiving a reasonable price for their shares.  It is my opinion this type of behavior by management is disgraceful.  For more on the history of the acquisition and how management truly tried to steal this company, please see the following articles in chronological order:

Wilshire Enterprises, Inc. Shares Set to Rocket Today due to Acquisition Announcement

Wilshire Enterprises gets Superior Offer from Bond Purchase, L.L.C.

Wilshire Enterprises Special Committee Agrees to Provide Information to Bond Purchase, L.L.C.

Again, congratulations to Wilshire stockholders and a special thanks to Mr. John Alvey of Bond Purchase, L.L.C.

Disclosure: The author owned shares of WLSE at the time this article was published. 

 

Wilshire Enterprises Special Committee Agrees to Provide Information to Bond Purchase, L.L.C.

Occasionally in the world of dark small cap companies, management and the board stumble on the right decision that may benefit more than just… Well them!  In one of the worst internal negotiations I have ever seen, a special committee of the Wilshire Enterprises, Inc (OTC Pink: WLSE) agreed to essentially sell the remaining 29% of the company to another entity owned by Wilshire’s current CEO, Sherry Wilzig Izak, for $1.50 per share. 

It all started on July 1, 2015 when a group (J&J Brothers Holdings, Inc.) controlled by Ms. Izak offered to buy the shares not already affiliated with the group for $0.77.  This would have been quite a steal in the truest sense of the word.  Of course they were wise enough to form a special committee and get a fairness opinion.  The special committee hired a financial adviser which placed a value on the company which was more than triple the original offer. 

The special committee came back to the table stating it would support an offer of $2.70 which is closer to a fair value, but likely still undervalues the assets of the company which is primarily office and apartment real estate developments.  After some back and forth, a price of $1.50 was agreed to so long as a majority of the minority shareholders agreed to the price. 

In comes Bond Purchase, L.L.C. last week offering to buy 20% or greater of the company for $2.00 per share.  I believe this offer was made entirely to put Wilshire in a position to provide Bond with information  in order for Bond to put pencil to paper and potentially make a more formal offer. This morning Bond has received the desired outcome as Wilshire announced it has agreed to provide information to Bond.  I would guess this was done by Wilshire purely as a means to avoid legal scrutiny.  In addition, the conclusion should not be made a formal offer will come from Bond and Wilshire is still recommending minority shareholders vote in favor of the $1.50 per share offer from J&J Brothers Holdings, Inc.  The stockholders meeting to adopt the merger agreement with J&J Brothers is scheduled for February 18, 2016.  It is unclear at this point if J&J has the votes to get the deal done.

Stay tuned…

Disclosure: The author owned shares of WLSE at the time this article was published.

 

NovaDel Pharma Inc. Resolves Contingent Liabilities Related to its Sale of ZolpiMist Assets

It has been well over a year since NovaDel Pharma Inc. (OTC Pink: NVDL) announced the sale of its ZolpiMist assets to Amherst Pharmaceuticals, LLC.  Compensation for the deal basically consisted Amherst assuming all of NovaDel’s FDA liabilities associated with ZolpiMist which at the time totaled approximately $2.2 million.  In addition, Amherst agreed to pay NovaDel a 10% royalty on the sales of ZolpiMist up to an aggregated maximum of $500,000 with an annual minimum payment of $150,000.  Now over a year later, Amherst has struck a payment deal with the FDA and has assumed these liabilities from NovaDel finally completing this chapter in the company’s history.

The question is where does NovaDel go from here?  According to management, the company has approximately $1.7 million in net assets which is mainly cash and a potentially valuable $60 million in Federal Net Operating Loss Carryforwards (NOLS).  Management has stated it will evaluate it options over the next few months and take appropriate action by the middle of 2016.  Appropriate action is likely one of two scenarios.

First, would be to liquidate the company and lose the value of any NOLs.  This would give investors safe return of their capital.  At last count on October 25, 2011, there was approximately 134,890,615 which would value its net assets at approximately $0.0126 per share.  There were also approximately 76,869,369 outstanding warrants, but all with exercise prices substantially above the current market value and some have theoretically expired.  The warrants did have down-round provisions, but since the company has not reported since 2011, it is unclear how this impacted the outstanding warrants.  According to the 10-Q, these down-round provisions would only be triggered if the company either issues equity shares for a price that is lower than the exercise price of those instruments, or issues new warrants or convertible instruments that have a lower exercise price.  It is not believed this occurred, but again, the company has been dark since 2011. 

The second and potentially offering the highest return for shareholders, may be to preserve the value of the NOLs by acquiring another profitable company that could take advantage of this asset.  Of course this only works for investors if they are not significantly diluted and a change in control is avoided as it can negate the NOLs. 

In either case, there could be an opportunity in NovaDel going forward, however investors should proceed with extreme caution as current financial information is not available.

Disclosure: The author owned shares in NVDL at the time this article was published.