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NEW YORK, Jul 25, 2007 (BUSINESS WIRE) -- GS Carbon Corporation (OTC Bulletin Board: GSCR) chairman and chief executive officer, Tom Scozzafava, issued the following letter to its shareholders today:
Dear Shareholders:
I am pleased to report today an update on the progress of our company and its business plans since Seaway Capital, Inc. acquired GS Carbon Corporation, which took effect on July 1, 2007.
On the corporate side, as reported previously the terms of the agreement called for Seaway Capital's acquisition of GreenShift's controlling stake in the form of common and preferred stock in return for the assumption of certain legacy liabilities of GS Carbon. I immediately replaced Kevin Kreisler as Chairman and CEO after he stepped down from both positions. Seaway Capital then canceled the common shares it acquired from GreenShift, and in addition over $500,000 of those legacy obligations have been eliminated.
GS Carbon Corporation is now in the process of filing the necessary documents to effectuate a name change to "Seaway Valley Capital Corporation", and we would expect an eventual ticker symbol change to reflect this name change.
On the business end, the Company has executed a number of share purchase agreements with shareholders of WiseBuys that represent an aggregate of 60% of the ownership and voting interest of WiseBuys Stores, Inc. As also announced, part of that 60% are shares I agreed to contribute for no cost to GS Carbon. Seaway shall make additional offers to acquire up to 100% of WiseBuys' shares over the following weeks, although we cannot predict the response of these shareholders. Seaway's goal is to acquire approximately 85% of WiseBuys.
These agreements shall become effective upon completion of audited financials of WiseBuys Stores, Inc. As WiseBuys' CFO, I can report that we have engaged Dannible & McKee, LLP, and these audits commenced two weeks ago. I have not been given a definitive timetable for their completion, but I can say WiseBuys Stores, Inc. has maintained "reviewed" financials by certified public accountants since its inception in 2003.
WiseBuys Stores, Inc. has five stores totaling approximately 230,000 square feet of retail space in northern and central New York. WiseBuys currently buys merchandise from manufacturers and resells to consumers, which is typical for retailers. Additionally, however, WiseBuys structured "in-store partnerships" whereby its partners (one such is Payless ShoeSource) literally maintain space in the stores and operate. WiseBuys is compensated in these arrangements by receiving a percentage of partners' sales. WiseBuys neither: (i) records the partners' sales figures as its own, nor (ii) records this percentage income in its own reported sales line. Rather, the income is recorded as "License Income" in the current financial statements below the top line revenues in "Other Income." (This is the most conservative recording of this income, as it does not exaggerate WiseBuys' gross margins by inflating sales with goods not actually purchased by WiseBuys.) As it relates to store-wide sales, however, since WiseBuys opened its first store in Canton, NY in November 2003, WiseBuys and its partners have collectively generated sales of over $37.8 million through June 2007. These revenues perhaps could be considered a proxy for WiseBuys' revenues if WiseBuys, instead of these partners, had sold these goods in lieu of our partners doing so.
WiseBuys Stores, Inc. also recently announced the execution of agreements to acquire 100% of the stock of Hacketts, one of the nation's oldest retailers. The agreement is subject to securing acquisition financing, which we hope to close on shortly. Hacketts owns and operates five retail stores that are somewhat similar to WiseBuys. However, a distinct difference is that Hacketts does not have "in-store partners" and operates all of their own departments within the stores. By doing so, the vast majority of the goods sold in Hacketts stores are recorded on Hacketts' top line sales figures. As stated previously, if the transaction is consummated, WiseBuys stores will be converted to Hacketts stores and run similarly to Hacketts.
Hacketts, also with "reviewed" financials, will be subject to audited financials as well.
I am pleased to be able to announce these significant events that have transpired since Seaway Capital, Inc. acquired the Company on July 1st. I shall continue to update you with further developments and with as much transparency as possible.
About Seaway Capital
Seaway Capital was formed in 2002 and makes equity, equity-related, and debt investments in companies that require expansion capital and in companies pursuing acquisition strategies. Seaway Capital also seeks investments in leveraged buyouts and restructurings. Seaway Capital will consider investment opportunities in a number of different industries, including retail, restaurants, media, business services, and manufacturing. Seaway Capital will also consider select technology investments.
Posts: 1364 | From: Somebody from Europe | Registered: Sep 2005
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I'm still holding until end of July for when they are suppose to make some announcements about the audited financials of WiseBuys.
Posts: 2329 | From: MD | Registered: Jul 2005
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