As impressive as sharting your pants in church, the gang alerts issued on the penny stock of Capital Group Holdings, Inc. (OTC: CGHC) proved to be a real stockbomb. Despite the rarely traded shares being used as a “list builder” to gain the attention of new stupiscibers, CGHC gapped high enough to have held a cliff diving event off of its open price. While the urgent care focused Company has over half a dozen operating facilities in Arizona, the list of these damn good dummies lists are going to need some therapy after crushing their subscribers today.
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CGHC Stock Quote
Market Cap: 10.38M
Last: 0.1298 ▲ +0.0598 (+85.43%)
Volume: 998,092
Dollar Volume: $151,509
Open: 0.18
High: 0.318
Low: 0.111
Trades: 252
Authorized: 300,000,000
Issued and Outstanding: 83,032,555
1st Support Level: 0.0607
2nd Support Level: 0.0513
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With $13,498,612 in total assets as of December 31, 2012, $1,684,306 of which were current, Capital Group Holdings made an impressive move last year when they acquired all of the assets and related obligations of a group of companies who owned and operated urgent care facilities within the Phoenix, Arizona metropolitan market. They were able to book $1,736,029 and $2,244,454 in revenues for the three and six months ended December 31, 2012.
Even more intriguing for those willing to overlook today’s debacle of gapping up and trading below the open within minutes of the bell, look closely at the deal details for the acquisition made.According to the most recent 10-Q:
On September 3, 2012, (amended on November 30, 2012 with an effective date of September 3, 2012), the Company’s wholly owned subsidiary OneHealth Urgent Care, Inc. (“OHUC”) purchased from MCS Ventures I thru VII all of the assets, liabilities and operations of those entities comprising and including Alliance Urgent Care PLLC (“AUC”) pursuant to an Asset Purchase Agreement for 10 million shares of the Company’s common stock. In addition, under a separate employment agreement executed on the same day as the purchase, the Company committed to issue an additional 10.6 million shares of its common stock as a onetime stock bonus. The Company is a publicly traded entity whose stock is quoted under the symbol CGHC on the OTCQB operated by OTC Markets (the “OTC QB”). After the date of the purchase AUC operates as a wholly owned subsidiary of OHUC.
The stock that the Company issued pursuant to both the Asset Purchase Agreement and the Employment Agreement contain a stock price guarantee as follows:
A. Stock Price Guarantee for Year #1, if by September 5, 2013, the Closing Price of the common stock of Capital Group Holdings, Inc. has not been equal to or exceeding $1.00 for 20 consecutive trading days immediately prior, Capital Group Holdings, Inc. shall issue to Sellers such number of additional restricted shares of its common stock as to make up the difference between $10,000,000 (10,000,000 purchase shares X $1.00) and the actual Closing Price of the common stock multiplied by 10,000,000 shares. (For example if the actual Closing Price of the common stock was $.80 Sellers would be issued 2,500,000 additional shares. {$10 million – $8 million [$0.80 X 10,000,000 = $8,000,000] = $2 million shortfall; $2,000,000/$0.80 per share = 2,500,000 shares).
Floor Price. For purposes of calculating the Stock Price Guarantee there shall be a floor price set for each of the two periods limiting the amount of stock to be issued to compensate Sellers for certain price fluctuations; $0.53 cents per share for the Stock Price Guarantee for Year # 1.
The same price guarantee and floor price applies to the 10,600,000 common shares issued under the one-time bonus; however, the date of the guarantee is June 30, 2013.
B. Stock Price Guarantee for Year # 2, if by September 5, 2014, the Closing Price of the common stock of Capital Group Holdings, Inc., has not been equal to or exceeding $1.50 for 20 consecutive trading days immediately prior, Capital Group Holdings, Inc. shall issue to Sellers such number of additional restricted shares of its common stock as to make up the difference between $15,000,000 (10,000,000 purchase shares X $1.50) and the actual Closing Price of the common stock multiplied by 10,000,000 shares. (For example if the actual Closing Price of the common stock was $ 1.00 Sellers would be issued 5,000,000 additional shares).
Floor Price. For purposes of calculating the Stock Price Guarantee there shall be a floor price set for each of the two periods limiting the amount of stock to be issued to compensate Sellers for certain price fluctuations; $0.20 cents per share for the Stock Price Guarantee for Year # 2.
The same price guarantee and floor price applies to the 10,600,000 common shares issued under the one-time bonus; however, the date of the guarantee is June 30, 2014.
That’s friggin huge! Either CGHC hits $1 or better for 20 straight trading sessions (one calendar month) or, Capital Group Holdings reaches into those authorized shares and issues out some more. Fortunately, very few played the group issued list builder off the open which means getting some CGHC stock at the support levels more near a nickel than a dime could turn out to be a great place to have your money parked over the summer.
About CGHC Stock
Capital Group Holdings, Inc., an acquirer and operator of innovative health and wellness organizations that have strong market presence, brand awareness, and talented management teams working towards achieving exceptional performance over time, operates 7 urgent care clinics through its wholly owned subsidiary Alliance Urgent Care.
Click here to view the SEC filings for CGHC.
Click here to view the website for Capital Group Holdings.
Last 5 Trading Sessions:
| Date | Last | Change | % Change | Volume |
| 04/23/13 | 0.0700 | +0.0130 | +22.81% | 105,000 |
| 04/19/13 | 0.0570 | -0.0030 | -5.00% | 70,000 |
| 04/17/13 | 0.0600 | +0.0050 | +9.09% | 11,500 |
| 04/16/13 | 0.0550 | -0.0140 | -20.29% | 800 |
| 04/10/13 | 0.0690 | unch | unch | 5,000 |
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Bottom Line:
Today’s performance is pitiful if you consider that no one except those who issued the alerts were able to capture the 310% gains from yesterday’s closing price on CGHC. However, based on the agreement from their acquisition and September 5, 2013 being a declared deadline date for CGHC to be at or over $1, it worth having on the list of penny stocks to watch with an entry target for those willing to wait it out at around $0.06.
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