19 Jan Southern USA Resources Inc (SUSA) – report – Corrected on 1/20/13
Rumors of a still unconfirmed $900,000 hard copy mailer appear to be false and so does the speculation that SUSA is possibly being pushed by the same group that helped run CLSR up from $2.00/share to over $6.00/share.
So if both of those rumors are false what is left for people considering a position in SUSA?
The only confirmed market awareness I could find for SUSA was a Caprock Risk Management report put out on January 10, 2013 which can be found on the SUSA website. Caprock is giving SUSA a price target of $4.00/share.
I found one other past Caprock Risk Management report for Pegasi Energy Resources Corp (PGSI) from May 14, 2012. Caprock gave PGSI a price target of $1.50/share. PGSI never came close to that price target. The share price was $.87/share on May 14, 2012 and peaked at $1.05/share on June 13, 2012. Prior to publishing the research report on PGSI, Caprock uploaded a fact sheet in April while PGSI was still in the $.65/share range.
In February of 2012, Caprock Risk Management also published a fact sheet for Regenicin, Inc (RGIN). RGIN saw no real progress in volume or share price in February of 2012 and actually saw the price drop during that period and beyond.
Going further back, in January of 2012, Caprock began an awareness campaign on Mesa Energy Holdings Inc (MSEH) giving the ticker a price target of $1.00. The MSEH price at the time of the alert was $.23/share. MSEH never came close to the $1.00/share price target, but it did manage to get close to $.40/share.
So the IR company backing SUSA doesn't have a strong track record.
What about the company itself and the share structure?
Following the 1:1000 reverse split on April 23, 2012, SUSA had only 43,528 shares outstanding.
On April 27, 2012, SUSA closed the assignment of mineral lease agreement entered into on February 27, 2012 that it had signed with Charles Merchant Sr, Gerald Short, and Carolyn Short, (ii) a Southern Real Estate Sales Contract with John Hancock Life Insurance Company (U.S.A.) and (iii) a Real Estate Sales Contract with David E. Riley, pursuant to which SUSA acquired 2 real property of approximately 52 acres located in the Clay County, Alabama in exchange for a $60,000 Promissory Note.
You can learn more about the Clay County properties which have not been in operation since 1899 here. Pictures of the new mining operation can be found here. Videos of the new mining operations can be found here. With gold prices now at nearly $1,700/ounce maybe SUSA really does believe they can revive the old mining claims and get their money's worth out of the properties.
According to the most recent financial report for the period ending September 30, 2012, SUSA has only $16,384 in cash. SUSA values the property and mining equipment at just over $1,000,000. The equipment (valued at roughly $355,262) was acquired from the CEO, Charles Merchant Sr. in exchange for 29,000,000 shares of stock back in April following a 1:1000 reverse split. Those 29,000,000 shares are currently worth over $38,000,000.
Those asset numbers would sound fairly impressive except that SUSA carried nearly $3,000,000 in debts on September 30, 2012 including nearly $2,500,000 in debt Notes. Most of that $2,500,000 in debt Notes are now long term convertible Notes meaning they could be getting converted and dumped into the market at any time.
$770,692 of the long term convertible debt held by Whalehaven Capital Fund Limited, Alpha Capital Anstalt, and Adventure Ventures LLC (which includes interest earned) has been amended so that it can be converted into SUSA stock at a conversion price of $.04/share. Two of those Note holders (Alpha Capital Anstalt and Adventure Ventures LLC) also own warrants allowing them to purchase another 535,714 shares at $.04/share. That makes a grant total of 19,803,014 free trading shares fully converted.
Alpha Capital Anstalt is controlled by Plumbing Bawag and Konrad Ackeman. Adventure Ventures LLC is controlled by Ari Kluger. Whalehaven Capital Fund Limited is controlled by Michael Finkelstein and Vadim Mats.
$1,920,000 of the convertible debt (listed at $1,491,033 after a discount) currently converts at a price of $.25/share (the price is subject to adjustment) for a grand total of 7,680,000 shares.
We are told in the SUSA filings that a small portion of the Whalehaven debt was sold to DPIT 5, Inc (Samuel Del Presto). Sam Del Presto also owned debt in BRND which became a Stock Castle pump&dump. See our BRND report here. More on this connection further down this report.
All total the long term convertible debt (plus interest) can be converted into a grand total of 27,483,014 free trading shares of SUSA stock.
Some of that debt has already started getting converted. On October 15, 2012, 726,875 free trading shares of SUSA stock were issued at $.04/share to some of those long term Note holders in exchange for the cancellation of $29,075 worth of debt. No doubt those 726,875 shares will be sold during some of this new increased volume coming in for the stock.
What we don't know is how much more debt may have been converted since mid-November. We only know for sure that over 26,500,000 more shares are waiting to be issued for debt conversions.
Since October 15, 2012, SUSA has continued to add more and more debt Notes to the books.
On October 24, 2012 a $200,000 convertible Note was added to the books convertible into SUSA stock at $.20/share. The conversion rate dropped to $.15/share on December 31, 2012 because SUSA failed to produce 700 ounces of gold.
On November 29, 2012 a $200,000 convertible Note was added to the books convertible into SUSA stock at $.20/share. The conversion rate dropped to $.15/share on December 31, 2012 because SUSA failed to produce 700 ounces of gold.
On December 21, 2012 a $100,000 convertible Note was added to the books convertible into SUSA stock at $.20/share.
On January 7, 2013 a $195,000 convertible Notewas added to the books convertible into SUSA stock at $.15/share.
What has all the borrowed money gotten SUSA?
So far no gold, but according to the most recent 10Q, SUSA has spent $377,126 in exploration costs since acquiring the properties in April. Will those exploration costs transform into production costs in the future? Only time will tell, but based on the information available for the properties, I wouldn't expect SUSA to turn into a successful mining company ever.
More on the SUSA connections to past promotions.
As as already mentioned earlier in this report, one of the SUSA debt holders, Sam Del Presto also held debt in Stock Castle pump&dump ticker, BRND.
Another Stock Castle ticker, UGST (current promo) has definite connection to another pump&dump graphite stock - Graphite Corp (GRPH). GRPH became a Bedford/Paragon pump&dump back on October 29, 2012 and is now experiencing a second wind. Both GRPH and UGST share the same legal counsel, Luke Zouvas. Zouvas recently received a Subpoena from George Sharp because Zouvas came forward as the legal representative for illegal spam promoter, Stock Castle. We have also seen both GRPH and USGT show up together in more than one press release drawing more suspicion about a connection between the two tickers.
Both SUSA and GRPH share a hired hand in Roger Szelmeczka who is a mining engineer.
What does all this mean? Only that SUSA has some similarities to some recent big name stock promotions making SUSA that much more of a stock to watch.
Look up Whalehaven Capital Fund Limited, Alpha Capital Anstalt, and Adventure Ventures LLC and you will find that these are ruthless toxic financiers with ties to shady overseas hedge funds that eat small cap companies for lunch often taking them to court to make sure they get what is coming to them from the very dilutive and very toxic debt Note agreements. You will often find these same companies all controlling debt in the same tickers (especially Whalehaven and Alpha).
Link to Alpha Capital Anstalt public shells
Link to Whalehaven Capital Fund Ltd public shells
Link to Sam Del Presto public shells
Long term, SUSA looks doomed to suffer at the hands of the dirty toxic financiers that control the shell.
Short term, SUSA could be the subject of some pump&dump activity especially since these toxic financiers are starting to get free trading stock through the conversion of their debt Notes all at around $.04/share.
CORRECTION added on 1/20/13
It now appears that the hard copy mailer on SUSA might still be real. I'm working on getting a copy to post, but for each passing day that goes by that the person claiming to have a copy of the hard copy mailer does not send that hard copy mailer I will start to once again lean towards believing that the hard copy mailer is just a fake. The bottom line is still the same. SUSA is a shell controlled by Toxic debt financiers with shady offshore links. These debt Note holders will be looking to profit off of those debts and that is no doubt the purpose of the current market awareness now being directed towards SUSA.