Plato, I'm at a loss as to why anyone would invest in INVT. The lawsuit, to me, appears to be a desperate attempt by the company to portray itself as a victim. As someone who tracks these sorts of things, such lawsuits not only waste shareholder money but also become all-consuming for the principles at a time when they should be devoting all their energy to getting their "new" company off the ground.
I must admit the following from the 10SB12G/A filing gave me a chuckle:
The Company has been in the developmental stage since inception and has no Principal operations to date. Other than issuing shares to its shareholders, the Company never commenced any operational activities. As such, the Company's sole purpose at this time is to locate and consummate a merger or acquisition with a private entity.
Then what company do they end up buying? The one owned by their President and Chairman, Douglas Smith. What a stroke of luck!
The Company has signed a letter of intent to acquire through a newly formed wholly-owned subsidiary all to the issued and outstanding shares of Zed Data Systems Corp., A British Columbia corporation ("Zed"), for a cash payment of
$5,000,000 and the issue of shares of the subsidiary exchangeable for 15,000,000 common shares of the Company. Douglas Smith, President of the Company, is the sole owner and President of Zed. Zed is a value added reseller of data communications equipment. It sells products and services for equipment supplied by several manufacturers, including Cisco Systems and Fore Systems. During the quarter ended February 29, 2000, Zed had sales of approximately $ 2,867,977 and income from operations before taxes of approximately $ 132,368.
So, Plato, did INVT investors get a good deal when they acquired Zed, a company that before taxes has projected annualized sales of $529,472 (132,368 * 4), for $36,800,000 ($5,000,000 cash + 15,000,000 shares * 2.12 current share price)?!
In checking the PR issued on March 9, entitled "InvestAmerica Inc. - Optica Communications Group Inc. - Completes Zed Data Systems Corp. Agreement", I notice the following:
Brian Kitts, director of InvestAmerica Inc. (Optica Communications Group Inc.) stated, "The acquisition of Zed Data Systems Corp. plays a key role in the ongoing development of our business plans. Besides the obvious benefits of producing revenues in excess of $20 million per year, the acquisition of Zed produces other key contributions.
Is it just me, or did you also get the impression that Zed Data Systems was currently producing revenues in excess of $20 million a year. Do you perhaps feel a tad misled?
- Jeff |
