Here's the entire article from today's Charlotte Observer.
Software firm's future bright, but losses dominate SEC filing
Alydaar Software Corp. lost $4.6 million last year on just $188,000 in
revenues as it added staff and expanded its offices to handle millions of dollars in contracts solving year 2000-related computer problems for large companies.
The Charlotte-based computer services firm also expects to lose $2 million to $3 million in the first quarter of this year, which ended Monday. But it foresees rapid improvement by the fourth quarter when it expects to be "strongly profitable," with at least $10 million in revenues.
Those financial results and other previously undisclosed information were in a securities registration statement the company filed Monday with the Securities and Exchange Commission.
It was the first such statement filed by the 5-year-old company, which had been exempt from disclosure under a little-known SEC rule applying to companies that are closely held and have less than $5 million in assets.
Alydaar Chairman Robert Gruder said Thursday the filing was also required so the company can move from the relative obscurity of the over-the-counter trading to the limelight of the listing on the Nasdaq Stock Market.
"The objective of the filing was to make the application to Nasdaq, to get visibility for the corporation and to become a reporting company, giving full disclosure of what's happening with the organization," he said.
Alydaar's business is based on software called SmartCode that it developed in 1994 to help companies automatically translate older computer programs into newer computer languages. In 1995, the company adapted SmartCode to detect and fix problems in older computer programs related to the date change in 2000.
Software in many older computers uses only two digits, such as "97," to identify the year. So some may mistake "00" for 1900 instead of 2000, resulting in lost data or miscalculations, costing companies millions of dollars.
Alydaar's stock in the past has been little-known and lightly traded. In January 1996, it was worth just $1.50 a share. But as word about the year 2000 problem spread, and after Gruder testified on the subject before Congress a year ago, the stock leaped as high as $36.50. It has since fallen back to the $10 to $12 range.
It closed Thursday unchanged at $11.375. With 13.6 million shares outstanding, the stock market values the company at nearly $155 million.
The company, which now has 250 employees, blamed the 1996 and early 1997 losses on its clients' failure to include year 2000 services in 1996 budgets and on the cost of "ramping up" for increased business. Expenses include adding software developers and programmers; buying furnishings, equipment and software; and opening new offices. |
