Domark International (DOMK:OTCBB) - Seeking Out Value for Shareholders
I was recently reading a press release that was issued by Domark International (DOMK:OTCBB) that really caught my attention. After reading the corresponding 8-K filing with the United States SEC in which the purchase price of Victory Lane and subsequent agreements referenced a projected $84 million in net income for the Victory Lane project in Georgia, I decided to contact the CEO of Domark.
Here’s the link to the SEC filing and this is the actual text of the 8-K filing that really caught our attention.
The additional shares issued shall be determined by dividing the actual quarterly net income, beginning with the quarter ending 8-31-09, by the sum of $80 Million projected net income to determine the percentage and then multiplying that percentage times 25,000,000 shares.
Domark International is engaged in a business acquisition strategy in the fields of technology, medicine, business services, sports and alternative strategy. The operational characteristics of companies that would be attractive as acquisition candidates include:
- Proprietary technologies and differentiating services with well established intellectual property positions
- Capable management teams that are focused on building a profitable company for their own shareholders as well as the entire corporation.
- Opportunities that could be merged with Domark’s existing businesses to create a stronger and more certain growth platform
- Low capital needs and high growth margins with near-term cash flow potential
- Products and services with differentiating features that could be sold at premium prices
Once an acquisition candidate is identified and if an acquisition is completed, Domark immediately embarks on a mission to offer its in-house corporate assets to maximize the objectives of all operating subsidiaries. Domark employs its assets of public relations, capital and financing expertise, corporate governance, systems management and business services to assist Domark’s operating subsidiaries in the management of their business plans.
Domark currently owns 7 different businesses. All of these businesses operate as wholly-owned subsidiaries of Domark International (DOMK:OTCBB). Domark’s subsidiaries are:
Victory Lane - Victory lane is a luxurious, 3,000 acre private, residential community located approximately one hour west of Savannah-Hilton Head airport. The community features 124 single-family, high end residential homes with prices starting at $750,000. The community has “something for everyone” including a Davis love signature golf course, a 20,000 square foot clubhouse and spa, tennis courts, the Phil Hill Motor Sports complex, an equestrian center, nature preserve, two motorsports lakes and several fully stocked fishing lakes.
Emerging Growth Advisors - For over a quarter century, the EGA consulting team has developed relationships and perfected skill which enable the company to provide a comprehensive suite of services to its client companies. Services offered by EGA include operational planning, strategic planning, business planning, operational planning, project management, financial services, small business services and internal controls and procedures.
EFCO Corporation - EFCO is a business services company. EFCO provides support services to companies looking to go public in addition to current SEC reporting companies.
JAVACO, Inc. - JAVACO, Inc. has been recognized by Inc. magazine as one of the top 5,000 fastest growing private companies in America. With 12 years of operating history, the company distributes over 100 lines of equipment and tools for the cable and telecommunication industries.
Crowley & Company Advertising, Inc. - For 18 years, Crowley & Company has operated as a full service advertising agency.
Executive Sports Entertainment Inc. - Executive Sports entertainment Inc. is an executive management and concierge service which provides services such as entertainment solutions, event planning, errands, transportation services, travel services and much more. The company is recognized as one of the nation’s premier executive concierge service companies offering high end services such as Master’s tickets to last minute travel accommodations.
Motivation Advantage, Inc. - With cumulative staff experience of over 70 years in the travel rewards and incentives industry, the company is an expert in creating motivation and incentive based travel programs that can be used to motivate and reward employees, business partners, merchants and other business partners. Travel-based reward programs are proven and effective business generation tools and are the preferred reward for most corporate incentive programs.
In summary, Domark International Inc. is a company which owns valuable assets. If you can assume that if only one of the wholly-owned subsidiaries reaches only it’s near term potential (i.e. Victory Lane’s projected net income of $84 million) with an applicable P/E of 10, you can make and defend a case of a market cap of $800,000,000 ($800 million). In the Company’s 10Q filed for the period ended February 28, 2009, the company had 43.2 million shares outstanding. An $800 million market cap would be equivalent to $19 a share. That only takes into consideration one of the company’s operating subsidiaries.
What I also like about Domark is that this is not a one trick pony. There are several poker chips out on the table and if any of these chips do come in, then the stock is a good bet at $2
Here are the challenges for the company:
1. It took time to discover the projected $84 million for Victory Lane listed in a recent 8-K. There is of course, no assurance that the company could attain $84 million in net income. However, only a small fraction of this number would make $2 a share very cheap. With a lot of moving parts, it may be a more difficult story to grasp for the average dream chasing investor. However, the investor that digs will find value here.
2. Ultimately, the company would like to be positioned so that it would never have to call to the public markets for additional financing. However, the company does need capital now to take advantage of acquisition candidates. Managing the financing plan is not a prerequisite for success but it will important to maximize shareholder value.
In all, we feel that there’s a lot of value here and any one of the company’s wholly-owned businesses could create significant value. Value plays are not necessarily synonymous with explosive growth but in Domark International, you just might have both. For further information, I would suggest contacting the Company’s CEO. Below is the contact information:
R.Thomas Kidd, CEO
Domark International, Inc.
NASDAQ Bulletin Board DOMK
757-572-9241
rtkidd@domarkinternational.com
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June 3rd, 2009 at 3:32 pm
Someone needs to do a better job of their due diligence about this CEO and his involvement with former companies such as Greens Worldwide and the ASGA Golf Tour. You might be surprised by all the skeletons in the closet and how much the stock of those companies lost in value during his tenure.