Palm Beach Gardens, FL – April 6, 2011 – National Asset Recovery Corp (REPO.PK) has issued a number of SEC filings since its first public offering on December 6, 2010. It’s most recent filing on April 1, 2011 may shed some light on the events of December 15, 2010 when then CEO William Forhan and COO Brad Shrader were locked out of the NARC headquarters by employees of York & Kassing Services including convicted stock broker Jeffrey Ray Senger. Since their IPO, stocks have dropped from a high of .54 to today’s .38 with trading very light all though their first full quarter.
Amongst the interesting developments has been the Feb. 21st, 2011 announced resignation of Board member Robert J. Kuechenberg, former Miami Dolphins offensive lineman between 1970 to 1983. This appears to have coincidentally come on the heels of his Feb. 12 arrest for DUI or drugs on a 2nd offense, Damage to property or other persons and improper lane changes.
NARC’s 8-K filings throughout the year have shown more reactive movements and a continued cash flow problem. While not unusual for a new company to operate in a deficit in its first year, it does contradict the successes claimed in their 8-K filings where they claim to have a” nationwide network of 600+ recovery agents in 700 locations operating in 50 states.” And “is working with over 20 major financial institutions and recovered assets for them in approximately 35 states nationwide.” The filing does properly admit an operating deficits have required them to borrow to maintain operations and streamlined their staff to improve efficiencies in order processing to overhead expenses.
Some highlights of NARC’s 8-K filings and Press releases include;
- Feb. 7, 2011- 8-K filing – Change in Directors or Principal Officers – Steven York of York & Kassing voluntarily resigned from the Board fo Directors and William Forhan resigned as the COO. Forhan’s financial transactions as they related to the company were under review without having been completed as of this date.
- Feb 21, 2011 – 8-k filing Change in Directors or Principal Officers – Board member Robert J Kuechenberg voluntarily resigned his seat and the review of William Forhan’s financial transactions were still under review.
- Mar 16, 2011 – Press Release – Chairman Bradley Wilson stated that NARC was now working with 20 major lenders in approximately 35 states with a network of 600+ recovery agents.
- Mar 29, 2011 – Press Release – NARC announced their partnership with Canadian headquartered Allied International Credit (AIC) in the effort to expand their skip tracing department.
- April 1, 2011 – Form 10K, Annual Report – NARC announced that the reason for the voluntary resignations of York and Kuechenberg were related to the material changes in the composition of the executive management. NARC recorded a net loss of $670,105 for 2010 as stated “For 2010, we recorded a net loss of $670,105 comprised as a loss from continuing operations of $570,341 and a loss of $99,764 attributable to income expense. The losses from continuing operations and income expense primarily reflect operating expenses and a failed stock investment for the period from the Transaction Date (August 27, 2010) through December 31, 2010 (approximately five (5) months), as we have reported limited revenues from our operations since the Transaction Date of approximately $105,333. We had no losses or gains due to the change of our business model as a repossession company effective as of the Transaction Date. For 2010, our loss from operations was comprised of general and administrative expenses related to our repossession business and our loss related to income expense is more fully described in Item 13 of this Annual Report.”
Liquidity appears to be a continuing issue with NARC as stated “As of December 31, 2010, we had $7,369 in cash and, since the Transaction Date, have funded our operations with capital raised through a private offering of our equity securities, which after the deduction of offering related expenses, netted us $732,145 and revenues we generated from operations that commenced in November 2010 of approximately $105,333. The capital required to execute our total business vision and objectives is significant and the revenues we currently produce from operations are not sufficient to satisfy our operating expenses or establish adequate working capital reserves to provide for future contingencies. Since January 1, 2011, we have depended and shall continue to depend on related party loans to satisfy our working capital needs and operating expenses.”
NARC Reported: NOTE PAYABLE AGREEMENTS
- On January 4, 2011, we executed an unsecured note payable in the principal amount of $31,690.59 with York & Kassing Services, Ltd. The note bears interest at the rate of five percent (5%) per annum and all principal and accrued interest are due on January 4, 2012.
- On February 7, 2011, we executed an unsecured note payable in the principal amount of $40,150.66 with York & Kassing Services, Ltd. The note bears interest at the rate of five percent (5%) per annum and all principal and accrued interest are due on February 7, 2012.
- On March 28, 2011, we executed an unsecured note payable in the principal amount of $89,124.38 with York & Kassing Services, Ltd. The note bears interest at the rate of five percent (5%) per annum and all principal and accrued interest are due on March 28, 2012.
Of the most odd and interesting items reported appears to be the result of the Board of Directors (Glynn and Wilson) review of William Forhan’s financial transactions previously mentioned. NARC reported “On September 1, 2010, we purchased 400,000 common shares at a cost of $100,000 from Casino Players, Inc. (“CPI”), a publicly traded company that William G. Forhan, our former Chief Executive and Financial Officer, was and continues to be affiliated with. The common shares currently have no value and we cannot predict whether the common shares will ever have any value.”
While the endeavor of creating a large publicly traded national forwarding company would be daunting enough, NARC seems to have been challenged all along the way and appears to be having a very difficult time maintaining leadership, profitability and stability. While they’re lackluster stock values may not be necessarily be evidence of impending doom, the many issues including acrimonious dismissals and persons of dubious notoriety present in their operations, may very hamper any recovery to their stock values as well as hinder the acquisition of future clients and agents to add to their network.