Partial IPO Filing… USA Synthetic Fuel Corp. (USFC)

We have just seen a filing for an initial public offering from a company called USA Synthetic Fuel Corporation.  Technically this is a move from the Pink Sheets to the NASDAQ if it comes to pass.  Financial terms were not disclosed other than that it plans to sell up to $100 million in shares of common stock in the offering (subject to change of course). Prior to this offering, the common stock has been listed on the OTCQB under the symbol “USFC”.  No underwriters were named.

USA Synthetic Fuel Corp. calls itself “an environmentally focused alternative energy company pursuing clean energy solutions based on gasification and other proven Btu conversion technologies.”

Before you get too excited, chances are that you have more resources on hand as of today.  The company noted, “USASF is a development stage company and, as of September 30, 2011, had $720 of cash on hand, no inception to date revenues, and there are substantial doubts about the Company’s ability to continue as a going concern.”  How much a public company does this sound like?

It further noted. “We intend to develop, finance, construct, own and operate gasification, synthetic natural gas, and Fischer Tropsch liquid production facilities, to convert lower value, solid hydrocarbons such as coal, petroleum coke and biomass into higher value, environmentally cleaner energy sources.”

USE OF PROCEEDS: “We estimate that the aggregate net proceeds to us assuming the sale of all the securities in this offering will be approximately $90,000,000, after deducting approximately $(?) of estimated offering expenses likely underwrites’ fees that will be payable from the proceeds of this offering.  We intend to use these proceeds for the following purposes:

• Lima Energy: Land Purchase, site development, licensing, engineering, procurement, construction, Ohio Air Quality bond offering expenses $30 MILLION
• Cleantech Energy (Licensing, engineering, contracting) $10 MILLION
• Technology Innovation Center $2 MILLION
• Engineering and product development $4 MILLION     
• Sales and Marketing $4 MILLION
• Working Capital and general corporate purposes $40 MILLION

Turning $720 and an idea into this much cash, genius if you can get it done.  Needless to say, this would not be appropriate for ‘widows and orphans’ nor for risk-averse investing strategies.

JON C. OGG