Stockholder’s Equity (Deficit)
According to [1994Q4], [2000Q1] and [2000Q2] the common shares and paid in capital of the company is as follows:
Date Shares O/S Paid In
Capital
31-Dec-99 54,634,740 $5,790,720
31-Mar-00 55,650,228 $7,121,334
30-Jun-00 55,666,953 $7,110,224
Clearly, the shares outstanding have increased by 1,032,213, and the paid in capital has increased by $1,319, 504. (I cannot think of a reason why shares O/S would increase in [2000Q2], and the paid in capital decrease during the same period – I think that would require either repurchasing of shares below cost, or issuing shares for a negative amount)
So it appears that since 31-Dec-00, NESS has issued 1.032MM shares for consideration of $1,320MM or $1.28 per share (average). There should be an entry on the cash flow statement for these new shares that were issued.
Note: This would explain where they got the $1MM to invest in investments available for sale – they sold $1.3MM in stock, and purchased $1MM in (speculative) investments with a portion of this money. The management discussion and analysis in [2000Q1] and [2000Q2] offers no guidance as to where these shares came from.
Clearly the [2000Q1] and [2000Q2] cash flow statement are missing a few items, mainly the flow of money into the company from selling stock, and the flow of money out of the company to purchase the investments available for sale. |
