One of our favorite local bloggers with a passion, and talent, for finance wrote this post in April.
The blog is Grindstone Financial and Brian Lantier is the author. BTW, Seaway Valley Capital is the company that current Assemblywoman and now Congressional Candidate Dede Scozzafava still owns investment shares. This post didn't have any intended political implications at the time it was written but it has some major implications now.
Thursday, April 16, 2009
Hackett's parent company has over 1 TRILLION shares outstanding
I haven't spent a lot of time on the Hacketts story but since the parent company of Hacketts - Seaway Valley Capital Corporation - is a public company I thought I'd just take a look at their latest filing with the government. Clearly, this is a complex situation and I only looked that latest filing on 4/13 (link here), but the one thing that jumps off the page is the convoluted capital structure of such a tiny company. The Seaway Valley corp has over 1 TRILLION, yes with a T!! - common share equivalents outstanding.That's so ridiculous that it's laughable. I can't ever remember seeing a company with more than a few billion shares outstanding. The company is now proposing to do a 1 for 1,000 reverse split (if you had 1,000 shares of the old Seaway Valley, you'll get 1 share of the new company) so that it's outstanding shares will fall to "just" 1.2 billion, and they'll have 8 billion shares available for future acquisitions.This gets a little detailed but the bulk of the shares outstanding seem to be due to a preferred stock issuance to a Mr. Scozzafava --- "100,000 shares of Series E Preferred Stock, par value $0.0001 per share, all of which were outstanding on the Record Date. The outstanding shares of Series E Preferred Stock were entitled to a total of 1,002,425,142,364 votes on the Record Date – i.e. 10,024,251 votes per share."I haven't followed this story closely enough to have any real insight (other than enjoying Hackett's selection of North Face products) but since I've recently talked about what an insane number a TRILLION of anything is, I thought I'd pass along that nugget.
POSTSCRIPT
North Country Public Radio presented the Dede side of the story. However, this blog invites you to pay special attention to the comments following the post.
http://www.northcountrypublicradio.org/blogs/ballotbox/2009/07/scozzafavas-brother-problem.html
