Nih Jack

$GP took a hit under $1 after today’s high of $1.51 Added .95 for a little reversal

I spent the last few days in a heated back-and-forth with the CEO of $AZRH Josh Cohen over one particular line item: $14.3M of “inventory.” What started as basic due diligence turned into a masterclass in why math beats bullies. Here’s the issue. That $14.3M inventory comes from a JV partner (CTT) that, right before going dark (expert market), had $48k of cash, negative cash flow, and no revenue growth. Yet somehow, we’re told they spent $5–8M+ building tools (according to gross margins) and injected them at a $14.3M valuation. So I asked the obvious question: How does a business with no cash build a warehouse full of tools worth eight figures? No answer. Just hand-waving. Then I drilled into the actual assets — specifically the “Jar” tools. Claim: • Jars valued at $7.65M Reality: • 48 jars are “Ready to Run.” • The rest are in “Shop” status — disassembled cores, parts, incomplete units. Used-market pricing (that Cohen provided) puts those 48 working jars at $480k–$550k. Even if I’m generous and use replacement cost and healthy valuation for the part in shop, you’re still talking ~$1M total, not $14.3M. That’s a 14x gap. Accounting 101 says inventory should be booked at lower of cost or market, not “list price because I plan to sell it.” You don’t get to mark old, non-moving tools like they’re brand new just because you’re optimistic. When I said that marking this to reality wipes out the company’s book value, the response wasn’t math — it was posture. The defense boiled down to: • “These were distressed assets.” • “I’m cleaning up a mess.” • “I’m being conservative.” • “You don’t understand GAAP.” • “Sit down and let the CPAs handle it.” No reconciliation of how $48k turns into $5-8M COGS. No explanation for valuing 48 working tools like 500 new ones. This is the entire standoff in one sentence: Me: The math is impossible. You have ~$500k–$1M of real inventory, not $14.3M. Him: Trust me, I bought a mess — and you don’t understand the business. The GAAP flagrant fouls Don’t. Even. Matter. There is no amount of accounting generosity that justifies $14.3M. It is my job to value business. There’s failure of GAAP accounting. No reasonable person could believe CTT could have contributed $14.3m in value. If you mark the “inventory” appropriately, the equity value is ZERO. And thats BEFORE scrutinizing the $148M in oil and natural gas properties. Markets don’t run on trust. They run on numbers. Cohen’s own spreadsheets betray him. And when the numbers don’t reconcile, that’s not “strategy.” That’s a red flag 🚩(fraud)