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Microcap & Penny Stocks : American International Industries Inc. OTC BB Symbol EDII
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To: jmt who wrote (3834)12/6/1998 8:26:00 PM
From: ColleenB  Read Replies (2) of 4814
 
if it is later determined the price was excessive (like during a subsequent audit), questions could arise concerning "writing down" the asset, reducing the book value of the company.

In order for this to happen, the additional factions of the company would have to have been in a zero growth pattern, which would be unlikely. I say it would be unlikely because they should have some growth from the condition that they were in when initially acquired.

One of EDII's claims have been each acquisition increased book value.

Any exhorbitant amount paid over fair market value increases book
value, which is not necessarily a good thing.

Hopefully this has not been done. We have been led to believe that Danny is a very shrewd businessman and EDII is the beneficiary.

That is one of the flaws with the purchase method of accounting for an acquisition.

We don't know how EDII has financed these acquisitions, do we?... I recall a PR mentioning one or two, but not the majority.

They can recommend an "accounting" value for the net assets, but thats the end of it. What Dror paid for the properties is his discretion.

Wouldn't they have to supply an appraisal??? If the company bought these from a Dror trust fund, a transaction and appraisal would have had to accompany this transaction, wouldn't it?
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