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08.11.09 TimelessWealth.net: Wireless Age Communications, Inc. (WLSA) enters in definitive agreement with Sunbay Energy Corp.
Dear Subscriber,
Wireless Age Communications, Inc., stock symbol WLSA, issued a
press release this afternoon titled, “Wireless Age to Acquire
Interest in Renewable Energy Projects”.
Source
Although my research is dedicated towards the continued delivery
of our focus due diligence topics, for instance exclusive partners
and their role in establishing Wireless Age Communications, Inc.
as a successful venture, there are key phrases that I would like
to highlight, as well as those I’d like to clarify, this edition.
Relationships.
Wireless Age Communications, Inc. listed four independent
companies in their press release. Their relationship is as
follows:
-Newlook
Industries, Corp. is controlled by John G. Simmonds, who is
Chairman and CEO of Wireless Age Communications, Inc.
Source
-Newlook
currently owns a controlling stake in Wireless Age Communications,
Inc. via. restricted common stock. According to an earlier
release, Newlook would forfeit 30,000,000 shares of Wireless Age
and 2,000,000 shares of its common stock to Wireless Age
Communications, Inc. in forgiveness of debt.
Source
-According to the same source, the “debt reduction” transaction
would have Wireless Age Communications, Inc. cancel (return to
treasury) shares of their own common stock that they would receive
from Newlook. Resultantly, Wireless Age Communications, Inc.
shares issued and outstanding would amount to approx. 27,600,000.
-Powerplay
Energy Corp. is the “parent company” of Sunbay Energy Corp.
-Sunbay
Energy Corp. exclusively reserves agreements with world renowned
plasma torch technology developer, Europlasma.
Financing.
Previously, Wireless Age Communications, Inc. issued a letter of
intent to acquire a controlling stake in Sunbay Energy Corp.,
specifically referencing their project in Port Hope, Ontario.
Source
The letter of intent is a non-binding contract, whereas the
definitive agreement they announced this afternoon governs the
terms and conditions they have reached in the acquisition.
Source
Financing of the acquisition was settled
under the following terms, “two million five hundred thousand
(2,500,000) Newlook Industries Corp. ("Newlook") common shares,
one hundred sixty seven thousand US dollars (US$167,000) and a one
million two hundred fifty thousand Canadian dollar (CAD$1,250,000)
senior secured debenture.”
The financing is handled through cash
and Newlook stock consideration. Notice that they have not granted
stock of Wireless Age Communications, Inc. to any party. Therefore
the transaction is non-dilutive. This is key: it will
ensure shareholder value. Please do not mistake the senior
secured debenture for a “convertible debenture” (convertible
debentures are secured by stock of the issuer, therefore dilutive
and destructive of shareholder value). A debenture is an unsecured
loan granted based on confidence in the issuer’s credit rating.
Source
In
the context of this transaction it means Sunbay Energy Corp. is
confident that Wireless Age Communications, Inc. will be able to
pay the given amount ($1.25M) in full as well as the occurred
interest (8% per annum) in the loan. The terms of the agreement
state that this senior debenture is secured by “a
general security agreement over all of the assets of the Company
including the intellectual property rights of the Port Hope
project and the Company's interest in future USA projects”, or
simply collateral (as with any loan). Remember: this debenture
is non-stock related. Wireless Age Communications, Inc. had,
however, mentioned that it may be “fully repaid by the Company
at any time with the delivery of five million (5,000,000) Newlook
common shares.” Notice that the agreement does not involve
any stock of Wireless Age Communications, Inc.
Communication is an important skill one must develop to be
successful in the equity markets. The following comic is meant to
illustrate the importance of both communication and comprehension
skills. In this information age what one knows may help one
succeed, and that which one mistakes or misunderstands may end in
failure. Knowledge is power. That is why we approach potentially
misleading statements with an open-mind and deliver clarity to
you, our reader.
To summarize Wireless Age Communications’ release we believe the
company has set a important milestone: they have signed a
definitive agreement and ensured shareholder value though
non-dilutive terms. We will continue to allocate due diligence
material to further discover this undervalued investment. Remember
that the fair market valuation based solely on the referenced
project in Port Hope, Ontario is $0.69/share, to date representing
a potential return on investment (ROI) of 392%. We continue to
believe that the company will create significant shareholder value
beyond the valuation based on one project. According to John G.
Simmonds, Chairman and CEO Wireless Age Communications, Inc., the
United States based projects will create even greater shareholder
value than the company’s project in Port Hope, Ontario. Greater
value amounts to a greater valuation, which translates to a
greater ROI for investors. All the best.
Sincerely,
Edward Stevenson.
Timeless Wealth Staff.
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