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Microcap & Penny Stocks : AWLT wines and gourmet food - Italy Direct -- Ignore unavailable to you. Want to Upgrade?

To: Ferick who wrote (210)	12/8/1997 1:35:00 AM
From: C. Riley	Read Replies (3) \| Respond to of 2595

Comments on the Stockswatch advertisement... This is fraud! "The acquisition [of Gold Coast] does add about .02 per share to the FsY97-98 sales without any expectation of reduced operating expenses and/or increases as a result of the acquisition." Araldica's press release stated Gold Coast would have a 1997 pre-tax profit of $100,000. If you pretend that Araldica has not issued a single share since July 31st to acquire the companies of late, it would still have 10,610,072 shares outstanding meaning the $100,000 pre-tax profit is $0.009 per share. Their statement that it will add $0.02 per share is a blatant lie. "Secondly, the Co acquired Antogianni Winery operation of Italy. This adds over $3.621 million dollars to the book value of the Co. which represent roughly $.40per share to the NET VALUE OF THE SHARES. The purchase price was less than 33% of the value of the assets. Acording to management, this will add top line revenue (sales) of $5 to 7 Million dollars per luyear with fully diluted earnings of $l.l38 to $2.238<Million per year or roughly $.l2 to $.15 cents per share fully diluted." I'm sorry, but this is another blatant lie. The property was purchased for less than $1,450,000 and therefore the book value must be its true sale price. The property sat on the open market for an extended period of time, and was therefore sold at the maximum the market was willing to pay. If it was purchased for "less than 33% of the value of the assets", then even using the smaller $1,450,000 purchase price that would imply an asset value of $4,393,939! These people can't even use a calculator! If they had a brain in their head, they'd realize that the acquisition adds nothing to the value of a share - because the purchase was financed through the issuance of additional shares and cash from the treasury. If it added $0.40 to each share as they claim, that would be around $6,000,000.00 total (considering the guesstimated 15 million shares outstanding). Again, these people need Math 101. How in the world Araldica will get $5 to $7 million more in sales from a 17 acre vineyard and winery that has to date only produced a few thousand cases of wine has yet to be determined. However, let's pretend it does happen. $1.138 to $2.238 million profit on these sales would imply a 23% to 32% net profit rate. We know from my previous posting that this far exceeds the 4% margin which they have actually been operating at and is therefore a misrepresentation, particularly when you consider that the true number of shares outstanding has not been made public. Such inflated statements without basis in fact are nothing short of fraud. And if Araldica uses these inflated book values in their accounting, they will be guilty of fraud too! I wonder what the arrangement is between Araldica and StocksWatch?