Research Note: Seaway Capital, Inc. (SWVC)
Jan. 12, 2008 –1:54pm EST
NEW YORK—Ludlow Capital is currently trying to schedule a live investor conference with Seaway Capital, Inc (OTC: SWVC) in midtown Manhattan.
SUMMARY
Due to the holidays and conflicting schedules Ludlow Capital is still in the process of scheduling a sit down presentation to better develop a research opinion and rating for the company. Ludlow is also working on scheduling a live investor conference in midtown Manhattan with the executives of Wisebuys, and the investment community. We feel this would be a great opportunity for the company to present a full business summary and operation plan to both investors, and financial institutions in Manhattan.
Investors interested in attending, or flying into New York City for the event please feel free to register for additional information, and hotel recommendations. For investors unable to attend the event a live broadcast of the event may be made available through telephone conference call if available.
Register here to receive updates on this research coverage, request an investor packet, or NYC conference information.
The merger between Wisebuys Stores and Seaway Capital does offer for an interesting opportunity to invest in a real brick and mortor retail department store, but many questions still remain. Some of the questions still outstanding will be US GAAP audits from the retail department store, how will the company be structured post acquisition, and can the company obtain the financing needed to close on the merger. These are all very important questions that may have a dramatic effect on the price and value for current shareholders. For now Ludlow Capital is adding Seaway Capital and Wisebuys Stores on its speculative watch list, and holding off on any letter grading rating at this time.
This investment may not be suitable for most investors, and we recommend you consult with a financial consultant before making this and any other investment decision.
RECENT EVENTS
On Jan. 08, 2007, the company announced that its wholly owned subsidiary, Patrick Hackett Hardware Company, has received a Term Sheet and Commitment Letter from Wells Fargo Bank, NA, through its Wells Fargo Business Credit operating division, for inventory-based financing of up to five million dollars $5,000,000. The Commitment Letter is subject to final due diligence and the completion of the loan documents.
On Oct. 23, 2007, the company announced the proposed merger between Seaway Capital (“Seaway”) and Wisebuys Stores, Inc. (“Wisebuys”). WiseBuys Stores, Inc., which was organized in 2003, owns and operates five retail stores in central and northern New York. It also owns a portfolio of minority investments indirectly through its wholly-owned subsidiary, Seaway Valley Fund, LLC. In addition, WiseBuys has contracted to acquire Patrick Hackett Hardware Company ("Patrick Hackett"), one of the nation's oldest retailers with roots dating back to 1830, which currently operates five general merchandise retail stores in northern New York. However, the completion of WiseBuys' acquisition of Patrick Hackett will depend on whether financing can be obtained as well as on the completion of an audit of Patrick Hackett's financial statements.
On Nov. 09, 2007, the company announced it had completed the acquisition of Wisebuys Stores, Inc., but has of yet to provide independent PCAOB audits for the 5 stores under management.
WiseBuys Stores, Inc. was formed and began operations in 2003 as a direct result of the closing of small-town retailer, Ames Department Stores. Founded primarily by lifelong "north country" residents, WiseBuys initially focused its efforts on serving the "discount" retail needs of rural communities throughout northern and central New York. The founders included venture capitalist and New York Power Authority Trustee Thomas Scozzafava, New York State Assemblywoman (minority whip) Dierdre Scozzafava, former BJ's Wholesale executive Joseph LaChausse, and former Ames Department Store Chairman and CEO Joseph R. Ettore.
WiseBuys' currently has stores in the following locations:
Canton, NY (40,000 sq. ft.) - full line department store;
Gouverneur, NY (53,000 sq. ft.) - full line department store;
Hamilton, NY (43,000 sq. ft.) - full line department store;
Pulaski, NY (59,000 sq. ft) - full line department store; and
Tupper Lake, NY (34,000 sq. ft.) - full line department store.
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