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Microcap & Penny Stocks : AmeriResource Technologies (ARET) -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Jens Tingleff who wrote (4884)	12/23/1998 12:23:00 PM
From: Siber	Respond to of 7609

Had my husband look over the 10QSB. He's a CPA, and based his opinion solely on the 10Q which is good, as he was not prejudiced by any posts or news regarding the company. He didn't have a lot of time to go in depth, so his response is short but to the point. First came a whistle...not a good thing coming from him when reading financials. His findings in his words: 1. Receivables. One would presume the related party receivables are good. Therefore trade receivables show extraordinary loss provision. 2. Company is basically insolvent (Assets 1M, Liability 4M). 3. They have negative cash flow and are currently generating cash via loans and issuance of stock. This is highly dilutive and is the reason for the price of this stock. This can only continue for so long. 4. Has current law suits, yet appears not to have resources to defend itself. 5. Going to issue more stock for compensation mergers, etc., again dilutive. 6. Tomahawk went BK. They are not going to get construction jobs that require bonding, hence their ability to generate good income severely hampered. 7. If you are going to lend money, usually you have money to lend. Where is the bacon? I really don't understand their business, one moment they are talking about financing mortgages, and the next they are talking about FannyMaes and Washington Mutual. Somewhere along the line, they have to have some money and they don't have any. 8. Company states net loss went from 1,233,536 to 457,381 and was the result of reduction of staff and acquisition of FAMC. Although this may be legally accurate (is this report written with the aid of Clinton?), the real reason for the decrease is the settlement with MK Ferguson/DOE. Conclusion: Chapter 11 or Chapter 7 Bankruptcy appears imminent. John asked me to include the following: "This opinion, which I have enumerated, is solely mine without the benefit of doing more due diligence than merely reading the unaudited financial statements and applying basic financial tests to them, therefore this is neither a solicitation to buy or sell this or any other security." ******* Well, there you have it. Unless they have a few rabbits in their hat that have yet to be pulled out the future seems to look bleak for ARET. John, as you may have noticed, is not very positive on this stock, yet here I am still holding my shares. Best of the season, Helene