The Penny That Cost $18 Million This is the fourth time I've written about Forge Atlanta. It keeps giving me reasons. Reading Bisnow's latest, I kept hearing a line George Patton borrowed from the French Revolution: "Audacity, audacity, always audacity." Whatever else you say about this crew, they have it. They announced a $650 million water park resort in Commerce, Georgia, and filed with the SEC to sell stock at $7 a share. The stock trades for pennies. The CEO said Commerce was working with a neighboring county on the water. Commerce's city manager said the city hadn't spoken with any county about it, and neither he nor his staff had been contacted about the project. Then they pivoted to what they call the largest mixed-use project in Atlanta history, 8.4 million square feet, with crypto tokens in the funding plan. They talked the seller into lending them $33.7 million of the $34.5 million price. About 98%. Fulton County's development authority agreed to up to $224 million in bonds and a $10 million tax break, if the project happens. An Atlanta investing club bought the stock at 7 cents through a private vehicle. Then the company defaulted on the land loan. Audacity, audacity, always audacity. Last week the company told the SEC its liabilities at the end of 2024 weren't $1.1 million. They were $19.8 million. How does a company with no revenue miss $18.7 million? The cash side is tiny: $4,271 in the bank at the end of 2025. The answer sits in one IOU. In 2022 the company settled with its founder by giving him a note he can trade for stock at one penny a share. $1 million of it is still unpaid, enough for 100 million shares. With the stock at 18 cents at the end of 2024, his $1 million IOU could turn into about $18 million of stock. Accounting lets you treat that kind of IOU as dilution, a shareholder problem, not a debt, if you meet a few conditions, and one of them is having enough unissued shares to hand over. Webstar is allowed 500 million and already had roughly 400 million out. The note, with its interest, converts into more than the room left. So the rules make it a liability, priced off the stock. That liability moves with the stock. Stock goes up, the company owes more. Stock goes down, it owes less and books the difference as income. In 2025 the stock slid, and Webstar booked $2.9 million of income from it. Without that, the year's loss would have been $4.3 million, not $1.4 million. The stock fell and the income statement improved. The same filing lists one full-time employee and two contractors. For 8.4 million square feet. The risk factors still warn about competition from Disney, Six Flags, Dollywood and Great Wolf Lodge. One of the trademarks it plans to file is "Come See the Bear." You can't make this stuff up. Luckily, they file it with the SEC. Bisnow's full story: https://lnkd.in/etz7GGhD