1. New Revenues
  2. Asset Play
  3. $21.4 Million Commission Not Factored into Price
  4. Trading at discount to Assets

Bravatek Solutions Inc. (BVTK) entered into a definitive Stock Purchase Agreement with HelpComm Inc. for $2.425 million total consisting of 100,000 shares of Series D convertible preferred stock and $25,000 cash.  The terms of the acquisition strongly favor BVTK and are akin to doing a non-dilutive equity offering.  The company acquired a revenue producing company for preferred stock and got assets as well.  The initial knee jerk reaction was likely based on the technical difficulties starting the conference call yesterday but loping about $8 mil in market cap off the company seems a little excessive.

HelpComm Acquisiton

BVTK got a very good deal on this company only having to put $25,000 down but they did finance them to the tune of $200,000 earlier in the year but that should have been factored in. HelpComm, is located in the Virginia, Maryland, and Washington DC area.   The company was under financial pressure and when BVTK recognized the opportunity and came to its aid HelpComm the assistance did not go unnoticed.  It seems reasonable that these two CEO figured out a great way to help each other.  Bolton needed access to capital and Cellucci needed some assets that he could leverage to get non-dilutive equity or debt.  In the June BVTK said indicated that the HelpComm agreement might generate $6.5 million in Purchase Orders within the next year. The company builds cell phone towers and likely to win awards for the upgrade to 5G.  The company is well established over a decade and is a customer to all the large cell phone carries including ATT, Sprint, and Verizon.

Conference Call Highlights

Minimize Dilution
Raise Equity
No Reverse Stock Split
$21.4 million commission

Cellucci indicated the only convertible notes left are in long terms shareholders hands who are likely to converting to equity and hold.   The financials are expected in two weeks.   The company is talking to quite a few equity players looking for non-dilutive financing and the acquisition just makes the case for funding even stronger.  The next round of funding will be used to fund operations and eliminate the convertible notes.  The largest convertible was extinguished in June.  TCA Global Credit Master Fund, LP (TCA) had very toxic provisions and the company wants to get away from that funding model.  The CEO was emphatic that no reverse stock split was in the cards.   A lot of discussion talked about the $21.4 million commission due in the next year.  On October 11th BVTK announced it earned a 20% commission $21.4 mil from a $107 mil contract for Iron Ore Mining Facilities.  This should have had a beneficial effect on stock price but it went down.

Long Term Due Diligence Play

For fundamental investors the combination of an acquisition with real revenues and real assets coupled with a $21.4 mil payday coming next year really puts a solid footing underneath the stock.  There are close to $30 mil of assets in the company and the stock appears to be trading at a discount.  This could very well be a knee jerk reaction to positive news.  Keep in mind that the company dispelled the idea of further dilution, shot down the notion of a reverse stock split and painted an optimistic picture of future revenues.   The CEO commented that he had been involved in 5 successful turnarounds and from the appearances this might be turnaround number 6.

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