I read the 10KSB. There's good stuff and bad stuff. Grab a beer, some chips, and get comfy, this might get lengthy. I'm still hung up on the 23,750,000 shares that was given to off shore businesses for $60,000 or about .0025 per share. Later in the report this figure increases by 400,000 to a total of 24,125,000. These are unregistered shares, regulation S. So we have 29,640,252 registered and 24+mil not registered.
That all happened in December 1997. Afterwards, all the officers of AOXY resigned and the new officers (of the offshore companies) took over. Please keep this in mind, we'll get back to it.
Back on March 9, 1998 we bought Integrated Marketing Agency, Inc. for $2,000,000, a promissory note for $550,000 periodically paid with a last payment due April 10, 2000, and 1,670,000 shares of convertible preferred stock. Then in January 29, 1999 we reversed this and backed out of the deal. It's all explained under "Purchase Agreement of 1/29/99" if you want to read it. Somehow this doesn't make sense, doesn't fit anywhere, and doesn't sound ethical, but I don't know.
As of June 30, 1999 the company had 7 employees.
April 30, 1999 NEC America filed suit alleging default of a lease agreement in the amount of $57.167.28. Then a previous employer sued them for $5,000 in unpaid wages. And on June 14, 1999 Airborne Express Inc. sued them for $5,093.95 for monies owed. These are all pending. Then there's 5 matters that were settled that involved rent due, unpaid services due, and lack of payment due. These were all small claims. Not a big important thing, but I don't like seeing (my) company not honoring their liabilities.
OBSERVATION: Looking at their tables for the last 2 years between January and March (3rd quarter) their high and low stock prices have been 0.09 and 0.015. The 4th quarter (April thru June) their high has been 0.23 & 0.20 and the low has been 0.055 and 0.015. If history repeats I would buy this in January or early February. There's also another reason to do this coming up later.
OK, this is what got me interested in the beginning, the financials. Comparing year end June 30, 1999 against 1998. Total current assets more than doubled, total revenues more than doubled, and total cost of sales was cut about 80%. NET INCOME WENT FROM A LOSS OF ($257,300) TO A GAIN OF $410,963. Ya gotta love that.
Oops, one little observation here. Their professional billable salaries went from $0 to $40, and their overtime wage expenses went from $0 to a whoopin' $146. I think perhaps somehow... I work for these guys.
NOTICE:
Here's a major plus! Mr. Robert Wolfe, Chairman and CEO waived his $250,000 annual salary. No officer or director received any compensation during the last fiscal year. The company paid no bonuses in the last 3 years.
Executive salaries are targeted at the median range for rates paid by competitors in comparable sized companies. Also, option grants are issued at no less than %85 of the market price of the stock on the date of grant. This is standard practice all over.
The directors etc. have waived salaries, bonuses, etc. This is cool but giving up a 5,000 share bonus when you've got a total of 24,125,000 shares sitting off shore ain't a big wow.
What's the conversion rate for the preferred? This is pretty good. Remember, this is 1,670,000 shares. Also, this is effective on March 2, 2000. If the share price is equal to or greater than 0.66, then it is a one for one conversion. If it is less than 0.66, then the conversion will be 1.5 shares for 1. Won't even go into the fail-safe stuff. If you want to know it's real close to the end of the report.
Bottom line, my bet is on or close to March 2, 2000, the price of the stock will be around 0.55 to 0.65 cents.
I hope ya all can make sense of this. I think the pluses out weigh the minuses, I feel better about this than I did yesterday. Off shore is bad any time any place, but these guys are working for nothing (so to speak). If the stock does good they do good. Bottom line I ain't going on any buying frenzy but I ain't selling either. A lot will be exposed when the 10Q comes out. So we (I) wait and the clock is ticking.
DuGen |
