I have been reading through this innuendo campaign you have conducted. I understand that in the absence of positive reinforcement, carefully worded misinformation can be placed by proxy on threads like this by people like you to benefit shorters etc. I have no interest in debate with you, but would like to offer the thread some of my own research. I am long on ALYA because I strongly believe we have a diamond in the rough.
When I went through the financial statements I asked a number of questions to the company. Their answers shed some light on the misinformation that you have inferred.
TLWatson: ALYA had issued 10, 834, 917 shares for which they received actual cash money of $1, 084.00 or less that 1 penny per share and using accepted accounting principles credited Additional paid-in Capital with $ 2,715, 875. PLEASE NOTE THAT DOES NOT MEAN THEY RECEIVED 2.7 MILLION DOLLARS.
The financials and the notes clearly state that the company raised
$2,770,610 in actual cash from sale of shares, debentures which have
been converted to shares and sale of certain software rights by March
31, 1998. $2,770,610 was the total amount of funds invested in Alya for its R&D, technology and operations as a business as at March 31, 1998. Since then, additional amounts have been further invested which exceed the $3 million mark.
TLWatson wrote: Now back to the Price Waterhouse notes:
Note 8b: March 21, 1997 issued 750,000 shrs aggregate value $406,000 for Cash & services*
March 28, 1997 " 411,049 222,686 Cash
April to September, 1997 " 414,866 311,150 Cash
August 12, 1997 " 100,000 " " 75,000 Cash
* On March 21, 1997, the Company issued 750,000 shares to a third
party for investor relations services performed (sound familiar). The shares were issued for a cash consideration of $0.033 per share, totaling $25,000. The shares were attributed a fair value of $0.542 per share and $406,500 in aggregate. The excess of fair value over
cash consideration received, amounting to $381,500, has been
recorded in the consolidated statement of operations as general and
administrative expense.
THERE NEVER WAS $3.6 million inflow into ALYA except as a bookkeeping entry.
The maximum amount of money ever to enter the books of ALYA from its
inception in 1995 to March 31, 1998 was $426,084.
As to why the Additional Paid In Capital is $3.6 million when the
company raised $2.7 million. The difference arises from the current
U.S. GAAP rules that say if a company compensates somebody by giving
them shares, it is to be recorded at the market price of the shares at
that time. So, when Alya contracts with a company to take them public,
by giving them 750,000 shares that are worth 54.2 cents each the
transaction is recorded as:
General and Admin Expense 406,500 Dr.
Share Capital (750,000 * $0.0001) 75 Cr.
Additional Paid In Capital 406,425 Cr.
There is nothing untoward about this at all - companies, whether start
up or not often pay for services in shares esp. common in the case of
going public. The 0.0001 cts per share as you can see is a par value
only.
It is worth noting that the transaction that you have been creating a
fuss about is the very transaction that allows you the luxury of making unsubstantiated claims above about the company.
TLWatson wrote: That is why the $3 million does not show anywhere in any form
as an asset. How do I know because I have analyzing corporate balance sheets and P & L Statements for almost half a century. Probably a lot longer than the PW account who signed off on the audited reported.
The 3 million has been used in product research, development and its
operations. The money went primarily in wages for Alya's programming
team. These people are the company's assets, not a fixed asset like a
factory or land etc. If you have been analyzing statements for almost 50 years as you claim, then you must have cut your teeth in an era when starting a business requires large investment in physical assets. To develop software one needs computers (several thousand dollars), imagination, creativity and programming skills. Only the computer shows up on a balance sheet. It's a totally different world for proper accounting of software/technology companies.
TLWatson wrote: By the way did you read his message to the BOD and Shareholders.
Let me post it here for you:
"The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operation and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty."
The Financial Statements clearly note that Alya was a development stage company. As was pointed out in an earlier thread, it is a boiler plate statement for start-ups, development stage of growth companies by an auditor.
Further, for you to say that a development stage company on NASDAQ OTC
is risky is like saying sugar is sweet - it's a given. The NASDAQ OTC is a risk capital market - it exists to provide capital to enable companies like Alya to create new technology and products and reap wealth for the risk-reward tolerant and patient shareholders.
Perhaps you may consider getting updated on the latest US GAAP reporting and accounting principles. Once you have a chance to do that, you may like to apply your criteria to blue-chip companies with huge revenues trading at much larger share prices, and having said that, some of those companies frequently report a loss of 0.01 or 0.02 cts per common share or more, and some report profits.
Clearly, a little knowledge is a dangerous thing. To imply that you know more than Price Waterhouse is quite a statement, esp. in light of the fact that you are yet to catch up with current US GAAP practices. The company confirmed to me that the financial statements were reviewed by four Price Waterhouse offices, including the US head office.
I was trained as an accountant many years ago and later moved into investment research. Today, I would not dare make authoritative statements without going back to school. I do not want to fuel your flaming campaign, so I will refrain from further discussion with you.
Thread readers should beware of your misinformation. |
