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The book assets as of 3/30/20 were $7.8B vs. $11.7B liabilities. $35B was property plant and equipment but that is only $5.8B after depreciation. In addition there is another $1.6B in preferred equity which would get paid before the equity. So $13.3B ranking above the equity and $7.8B of book assets. From the last 10-Q.
According to the Restructuring Support Agreement entered into by CHK and some of the debtors and described in this morning’s 8-K, “each holder of an equity interest in Chesapeake would have such interest cancelled, released, and extinguished without any distribution.“
The unsecured bonds which rank above the preferreds which rank about the equity are offered at 4 cents on the dollar this morning.
Nothing is elaborate about this scam. It’s transparent and sloppy. I don’t think he’s smart at all. I’m not sure how he benefits which is why I have in older posts referred to “whoever is really in charge.” Im assuming he is getting kickbacks from a shady brokerage, past and present loan holders who have benefited from discounted dilution, or some other form of payment. It is tough to tell as the list of the 115 common equity holders is not published - only the holdings of corporate insiders Bollen and Torno. Also likely that whoever is dumping is not a registered holder. It’s a weird company financially where no one pays them for revenues (just IOUs) and the employee(s) are not paid (by ALYI at least) in cash or stock - just IOUs. That together with the non stock ownership by Torno makes it a very odd, abnormal, and interesting mystery. The obvious answer is that Torno is getting paid by an entity other than LEXG. If anyone has any insight please weigh in but this whole story is sloppily put together as are the financials.
For which of these facts about ALYI and veteran serial fraudster Randy Torbo do you want back up / a link? The fact that Randy Torno owns no stock and Ed Bollen has the controlling vote with the preferreds but does not have any real financial stake in the common stock? The fact that Randy Torno doesn’t have ALYI on his LinkedIn page just like Alex Wash doesn’t list that he was CEO of LEXG for years on his LinkedIn page. Instead Torno only lists his current work with an international consulting firm and probably hides his ALYI involvement due to his real job’s strict ethics policy (yes it’s the same Randy Torno - compare the rest of the bios). The fact that Randy Torno went silent after he promised a multi-million dollar Kenyan contract (sound familiar?) years ago that never happened while at ANCE (which is now skull and crossbones on their markets). That this company is supposedly being run by one part time CEO and one consultant? The misrepresentation of Professor Mitlin’s role in the technology as “leading” the effort when he only performed a minor one-time consulting role (you can email him or call him at Clarkson University), the hinting that ALYI was partnered w a major company when it turned out that ALYI is only participating in a conference sponsored by the company, the amount of time required for the US and Africa contracts to come to fruition, the assumption that anyone would invest or order from a company with no financial or engineering resources (despite Randy saying companies needed product immediately in just in time delivery), the fact that they fund via dilution and an ICO scam rather than legitimate venture capital or partnering.
The repetition each quarter of major accounting flags - Accounts receivable growing with no increase in cash - one of the most common fraud flags. Revenues from least 2 years without any payment (and some of the work was COMPLETED at least two years ago or they could not book them according to standard revenue recognition and ALYI’s own policy.). The fact that the value of the digital currency Ven remains constant each quarter despite being a digital currency that fluctuates versus the dollar which is impossible. The use of paid analyst Rob Goldman to pump the stock for pay and the use of him for ICO research. The lack of details as to how thie ICO will exactly fund LEXG or other projects or if the ICO buyers will get ALYI “technology” or ownership (They have to get something for their $50MM) “diluting” anything that ALYI stock holders can claim to have (which is nothing as there is no shareholders agreement, no independent board of directors and Ed Bollen holds all the required shareholders vote with no financial exposure to the common equity). - they announce have broker iSuper duper fraud.
The claim that IS speculation that I can not prove except over more time when ICO money never shows up as cash in quarterly financials (but you can read It or give it to a lawyer friend) is that the “news” is real and my guess is that an LOI will be signed in the next few months if not in the next week and that if it is drafted properly (if we get to see it) it should be binding. However it is meaningless as a “funding partner” (cleverly worded) is not an investor but a party willing to attempt to sell ICO funding for a commission. Even when the LOI has been signed there is no funding. Again, that one I can’t prove except over time - if At least $5MM cash from the ICO shows up on the balance sheet I’ll admit that Randy is a genius and ALYI is a huge bargain. It won’t.
Yes. Thanks. I lost track of the massive dilution and took the share count from Bloomberg.com which looks like they are at the year end 2018 share count before the stock was diluted another 400%+. Here’s how much it changes the argument (or not) -
The “news” is real but silly/meaningless. It’s as if I bought a house worth $2.5MM (the market cap of ALYI determined by people valuing it in the public markets) and then said that my funding partner (a real estate agent) was going to list it at a valuation of $50MM and that we would have the official listing by the end of the month. In addition, my “funding partner” has prepared MLS information (which takes longer and means as much as “partitioned the block chain”) for listing in late June at a $50MM appraisal. More nonsense from this serial fraudster! What does this “news” mean to you?
The “news” is real but silly/meaningless. It’s as if I bought a house worth $500,000 (the market cap of ALYI determined by people valuing it in the public markets) and then said that my funding partner (a real estate agent) was going to list it at a valuation of $50MM and that we would have the official listing by the end of the month. In addition, my “funding partner” has prepared MLS information (which takes longer and means as much as “partitioned the block chain”) for listing in late June at a $50MM appraisal. More nonsense from this serial fraudster!
That’s hilarious. The plan is to do an initial $25MM ICO and then later another $25MM ICO at a $50MM valuation for a company which is already traded in the public markets with less than a $500,000 market cap. Right! No investor would buy this and the SEC won’t approve this. Also how will this ICO work? What will their claim be versus equity holders? We hear none of the details as it is nonsense. And the “funding partner” of course is not a partner providing funding. It’s a partner willing to take a potential commission to try to sell this thing. Also, they keep bragging about having “already partitioned the blockchain” - sounds impressive - a milestone! Too bad it is analogous to and as meaningless as saying “we have already designed the excel spreadsheet to record all of our future sales.” This is a small company but hopefully the ICO and the affiliation with PJET and ANCE will have the SEC on whoever is really behind this like they went after the death spiral convert investor behind LEXG. ALYI is far more ridiculous than LEXG and as I have detailed in earlier posts it has more red flags for fraud than anything I have seen. Randy is both lazy and hilarious.
That is outdated. Today S&P downgraded CHK from CC (where it was previously downgraded from CCC a few months ago) to D on the missed payment and said they “believe the default will be a general default and that the company will fail to pay all or substantially all of its obligations as they come due.” To see the entire rating action go to https://www.standardandpoors.com/en_US/web/guest/home, register and search for Chesapeake Energy.
That is why a locate is required. In order to legally short a stock you must first get a broker/prime broker/custodian locate which means the actual stock of a holder has been locates and you can “borrow” itt, for a few, in order to sell it short. In heavily shorted stocks the financing fees to “borrow” the stock to short can get very high and at some point there can be no more shares available or if the holder no longer wants to lend its shares, there can be a buy in where if you don’t cover your short the broker does it for you. This is one way a short squeeze occurs.
But the SEC might go after them if they actually launch the ICO. The SEC hates ICO scams. That is most probably the reason that LEXG (which for a brief period of time had a ridiculous strategic partnership with ALYI) never executed on its hyped ICO fundraising.
No. Can only buy bonds that were investment grade as of 3/22/20 and ETFs so no HTZ bonds (neither JNK nor HYG have HTZ bonds)
Where did you get a locate and what was the fee? This stock is being bought in and can not be shorted most places and with super high fees for existing shorts.
They are in covenant violation which puts $10B of debt in default. The maximum $300MM would make no difference.
Once again makes no sense. “A pre ICO funding round is ready to launch and ICO details are being finalized” Why do they have to do a pre ICO funding round? It doesn’t cost money to launch the ICO (other than likely commission to be paid after the ICO money even though it’s not clear how much of that if any goes directly to ALYI). This sounds like Randy speak for “another dilutive convert is coming and I thought I would lump that in with the ICO which sounds better.”
I agree. The far more likely answer is no tax fraud. No sales but a mistake under one caption that contradicted the other captions and the company filed financials good catch there though!
You are correct. I was wrong. The article says that! But the reporter is wrong unfortunately or if they were right they are wrong in all of the captions that say “almost market ready” and SHMP committed tax fraud By not reporting the sales which is worse. But yes, good DD there (but hopefully it’s wrong as no outlet is better than sales tax fraud).
It didn’t ruffle feathers. It made people wonder how you were thinking there were restaurant buyers and a Dallas retail outlet? The article says nothing about that, the captions say “ALMOST market ready” in each picture and the revenues are reported by the company itself as 0. I have no problem with the article or the author and I doubt anyone does. It’s the things that are NOT in the article (sales, an outlet, restaurants) that we are saying are not true even in SHMP’s own account in its SEC filings.
The writers of the article never said that the Dallas “buyer” or any buyer ever bought any. They never mention a Dallas retail outlet The article says he saw them (and cleaned them obviously) at a Dallas food show. A food show is where new products are displayed and sampled. Orders may be taken but since SHMP was not at production volumes at that point and since they never reported any revenues, they did not take orders here - only sampled. Not a retail outlet. The article says SHMP INTENDS to sell 7000 lbs to buyers not that they actually have sold any. Then the financials to 3/31/19 confirm that they sold none. Michael Scott, the Dallas chef with Rosewood meats has no shrimp on his menu and the other catering restaurant affiliated with Rosewood meats lists Steaks, cheese, charcuterie and “daily specials” - if they were ever Natural Shrimp they didn’t buy them as zero revenues were reported.
They must have been giving that shrimp away At the San Antonio Farmer’s Market as they reported 0 revenues for the fiscal year ending 3/31/2019.
My knowledge of the facts I listed. Which of those do you think are wrong? Is there cash flowing to the company? Did Ven stay constant for years? Does Torno advertise his involvement in Alyi on his public profile? Did he ever mention what happened to the ANCE Kenyan contract? Did he ever explain ANCE at all to the investors he suckered.
And that didn’t include everything ridiculous about this company supposedly being run by one part time CEO and one consultant, the misrepresentation of Professor Mitlin’s role in the technology, the hinting that ALYI was partnered w a major company when it turned out that ALYI is only participating in a conference sponsored by the company, the amount of time required for the US and Africa contracts to come to fruition, the assumption that anyone would invest or order from a company with no financial or engineering resources (despite Randy saying companies needed product immediately in just in time delivery), the fact that they fund via dilution and an ICO scam rather than legitimate venture capital or partnering. If this isn’t a scam, Randy is doing a good job of making it look like it. And why doesn’t he own stock and why doesn’t Ed Bollen who has the controlling vote with the preferreds own any real financial stake in the common stock? These all seem “normal” to you?
Same major fraud flags. Accounts receivable growing with no increase in cash - one of the most common fraud flags. Revenues from least 2 years without any payment (and some of the work was COMPLETED at least two years ago or they could not book them according to standard revenue recognition and ALYI’s own policy.). The value of the digital currency Ven remained constant once again despite being a digital currency that fluctuates versus the dollar. Impossible. No wonder why Randy doesn’t have ALYI on his LinkedIn page just like Alex Wash doesn’t list that he was CEO of LEXG for years on his LinkedIn page. Instead Torno only lists his current work with an international consulting firm and probably hides his ALYI involvement due to his real job’s strict ethics policy. TALUI is tied w LEXG for most obvious fraud ever other than that LEXG might have actually used their money made from diluting shareholders with the fake technology story to buy real oil royalties. We’ll never know - LEXG went silent just like ALYI CEO Randy Torno went silent after he promised a large Kenya contract that never happened while at ANCE (sound familiar?). The ICO is particularly funny - $100MM ! No details as to how this will exactly fund LEXG or other projects or if the ICO buyers will get ALYI “technology” or ownership - they announce have broker interest (which doesn’t mean they will buy it - it means they will accept a commission if they can sell it) and they announced “partioning the blockchain” as a milestone when it’s like saying “we have set up the future sales spreadsheet” for a non existent company. Finally loved that the ICO research was performed by paid for pumper Rob Goldman. Super duper fraud. Unfortunately not big enough for the SEC to waste it’s resources but they may get the whole shell, verges fraud group like they are going after Justin Keener one of the real profiteers behind LEXG. Torno also was awful in saying he thought it would be “disrespectful” to post updates during a pandemic. Bull - that’s when investor need REAL (not fluff partioning the blockchain’) info the most and almost ever major company gave Liquidity and operational updates during that period. Disgusting fraudster wrapping himself in his military experience but not willing to put ALYI on his public LinkedIn profile. Awful.
That’s a different Randy Torno
https://news.engin.umich.edu/2018/04/michigan-made
Note this one worked for international Equipment Solutions which was formed through KPS Capital partners which bought the patent holder Paladin.
ALYI’s Randy Torno has degrees in communications, film studies and public policy and has no patents nor technical expertise.
Yes. Founded in 2001 by Danny Meyer’s Union Square Hospitality Group
Shake Shack was a hot dog stand founded by NewYork City’s biggest upscale restaurant group (Tabla, Union Square Cafe, Eleven Madison, and more), opened to great anticipation, and run out of the kitchen of Eleven Madison, a three Michelin star restaurant always ranked as one of the top in the country (and #1 in the world shortly after being sold to a new group). It was created with massive talent (management and chef), resources, and publicity behind it. It was never “just” a hot dog stand and because it had an investable business plan it never had to issue dilutive toxic convertibles to fund itself.
Yes, Jim Nixon as of 1/15/2020 (last filing) Jim Nixon owned 14MM shares which was only 1.9% of shares out and only worth $2100 at today’s close and closer to $1400 at today’s VWAP. So he has no real economic ties to the stock (which is different from economic ties to the company). He owns ALL the super voting preferreds so together that gave him 98.51% of the vote. This is bad - shareholders don’t get a vote and the person who has all the vote has no incentive to care about the shares (caring about the company is different than and leads to different outcomes from caring about the shares). From the last 10Q covering up to the end of September, they lost $2.1MM on an earnings basis and lost more than $900K in free cash flow for the first 9 months of 2019 (the latest data until we get more on may 14). They had $78k in cash and $200K in current assets relative to $5.7 million in current liabilities and were being sued for $565k by a creditor. Pretty insanely bad numbers for a company with a $113k market cap which is why despite more than $3MM in revenues per year no one wants this company or they would be able to get real investors not toxic debt investors at much higher dilutive rates.
Unlikely anyone would franchise from a company with so few resources and one that is losing money on an operating basis. Since it doesn’t have the benefit of huge brand loyalty or significant scale in buying power I would think someone at this point would rather basically copy it which is perfectly legal. Obviously they can’t use the name or same design etc but they can serve CBD burgers (or CBS in the side). My fear w the Dallas franchisee was it was Randy Torno of PJET as that is where he is from but that is a very very wild outside chance. Either way we had not seen them return as they were supposed to nor have we seen others announced in the months before this crisis. It should not take a long time to sign a franchise agreement that already exists. It makes more sense to me that the potential profit and value proposition from franchising (if Jim can’t make money on an operating basis how will a franchisee once he or she has to pay a franchise fee) don’t work for any savvy investor. however BurgerIM (a scam with real burgers but a financial scam) found franchisees (all bankrupt now) so I guess one doesn’t need educated investors to sell a franchise just a celebrity endorsement!
Not sure what you are saying. Charles Schwab itself neither owns this nor is short this. There are only 56,000 shares short (900,000 at the peak in August) as of 3/13 less than $2000 worth of stock. 4.5 MM shares are available for borrow - I didn't check the rate as it’s all in retail hands who usually are not in a position to extract a high borrow fee and because it doesn’t really matter - even so if every borrowable share was shorted that would be a profit of $120k if it went to 0 - no hedge fund would risk shorting a penny stock for that low upside. Not saying no one is shorting but no real investors and not in any size compared to the 2mm plus shares that trade each day or the 369Mm shares + outstanding.
I have always said the business is real but the stock is a scam. This is shown by Jim’s sole voting power via the super voting preferreds vs having almost no economic risk via the common shares you are buying. If this were real he could simply LBO the whole thing or access Venture capital much cheaper than the toxic converts were. Jim had a real business that, like most restaurants, was losing money even though high revenues. Jim’s main goal was to pay off the legitimate loans backed by his mortgage which he did by diluting you. They were losing money on an Operating basis due to high costs of ingredients and labor not startup costs. All that is in their last 10Q. His association w PJET which he and Randy Torno have both dropped but also his association with Goldman Small Cap who had the $0.17 target but it was paid research and if you look who he has written paid research for (e.g. ALYI) it is mainly stock promotion scams. Goldman (not Goldman Sachs) also does non paid research but his WCVC was not in this “real research” category. This is all in the disclaimers of the report which is online at Rob Goldman’s site. Anyway the business can be real but the financing a scam. No one educated would but a stock where there is one person with all the voting power (over 50% so you never get a shareholder vote on anything), almost no economic interest in the common stock, no shareholders agreement, and no board oversight. Even if this does work out Jim can pay himself all the profits via salary and bonus. Not saying this can’t trade higher as people get excited by it but ultimately your bet has to be two fold - they will do well enough to pay the mountain of debt (maybe dilution has cured that but we won’t know until the 10-Q for the quarter ended March is posted which comes after the may 14 10-k AND that if this works Jim will allow shareholders some profits. Real stocks do not have this structure. The burgers are real - the financing is a scam.
Yeah. Super funny. No hedge fund is going to short a 3 cent stock w an $11MM market cap. If they got a locate on and shorted every share outstanding and made the most money possible with this being delisted to 0 immediately $11MM isn’t a pimple on any real hedge funds p&l. Plus the shares aren’t borrowable so hedge funds shorting - no.
Yes. You can buy the long dated bonds for 6 cents on the dollar and the bonds that mature this year are trading at 10 cents on the dollar today. This means the stock is worthless but like SHLDQ this could possibly go on a long time and allow someone lucky to trade it but more will lose that game than win as it will ultimately be a zero. They missed a coupon payment already.
What this means is that the SEC is going for the real people behind all of these OTC scams. It’s terrific. I always wrote that Alex was a dirt bag but he was really just a tool of the people making the real money - the death spiral convertible holds who would short stock without locates and allow these scams to go on for years. This is great news!
The one I called though “sounded” busy though (super unscientific but a lot of noise from workers communicating so didn’t sound dead) and they are still selling cocktails.
Who DOESN’T have Instagram marketing? That’s not some new insight. For example another local Denver Burger chain Park Burger has twice as many followers and more than 20x as many actively following as illegal burger. Doesn’t seem like they are doing anything especially “smart.”
Only a game changer for negative. No restaurant is doing better w covid. Fast food hurt a little and fast casual like Illegal burger hurt more across the board. Don’t listen me to listen to their landlords but at least this is real data and not a guess.
http://investors.spiritrealty.com/file/Index?KeyFile=403589422
The actual filings are on theotcmarkets.com.
At the last 10-Q they listed $22K of cash and $117,004 of Ven, a rarely used digital currency. This is obviously fraudulent as Ven, like most currencies, varies in valuation with the dollar but on the ALYI balance sheet the amount of Ven in dollars is always the same - it’s a fraud.
TTM revenues are actually $240K but this is also a fraud. The revenues are supposed to be from a data consulting business in South America which is never talked about. Worse, the revenues never become cash. They build up in Accounts Receivable and have for a year and a half as ALYI has never been paid. The revenues are just amounts supposedly owed to them for at year and a half with no actual payments in that time. Another sign of fraud.
The biggest sign of fraud is that Randy Torno ran at least two fraudulent businesses. He was on the Board of PJET while a college student was the puppet CEO. She now runs the website of a local nail salon. PJET was basically given away then folded after a story about it becoming a cannabis food truck and cafe. Worse was ANCE where he promised a multimillion dollar condom contract in Kenya (sound familiar?). It never happened and he just went dark never explaining it.
Another fraud signal is that their digital currency, Ven (not in the top 4000 digital currencies by volume) is ALWAYS listed at exactly $117,004 in dollars do even though the value of Ven moves around like any digital or hard currency, it never changes on their balance sheet. Now it could be possible that some genius (which would have to be Randy Torno who though not full-time is as close to a full time employee as this resourceless company has) is buying and selling the EXACT amount of Ven each quarter end and getting lucky enough to have it remain exactly $117,400. However, this never shows up in the statement cash flows so no. Just fraud.
Or look more recently at the last SEC filed document the DEF 14C from 1/20:20 - Jim Nixon has over 98% of the votes which is why they filed a Notification Statement rather than a proxy vote. They never have to vote on anything. Jim just decides.
What vote was obtained to approve the actions described in this information statement?
We obtained the approval of the holders of 14,000,000 issued and outstanding shares of Common Stock and the holder of 500,000 issued and outstanding shares of Series A Preferred Stock, representing approximately 98.51% of the voting securities.
The chart right below that shows Jim Nicon owns only 1.85% of the common but 98.51% of the vote.
Look at the latest 10-Q from nov 2019 on theotcmarkets.com they don’t even have $100K. They have $22K cash and $117K of a digital currency no one has ever heard of. This is against over $5MM in liabilities. And they have $60K of consulting revenues a quarter but these have not turned into cash in over a year and a half - just piling up in accounts receivable - ie not getting paid. This long term unexplained disconnect between revenues and receivables is one of the most common forensic accounting signs of fraud (but a bigger sign is that CEO Randy Torno ran 2 other frauds - ANCE and PJET which went worthless and dark - he even promised that he had a contract for Kenyan revenues for ANCE which disappeared without explanation - for an ex Hollywood guy he keeps the same script). The huge current account deficit is the sign that without huge dilution they would be going bankrupt. Yes startups have negative cash flow but real ones don’t have current account deficits many times their enterprise value.
Not a lie - 100% of the voting power (less but once you get over 50 it’s the same as 100 - they don’t even hold proxy votes due to this) but less than 5% of the common which is meaningless anyway. He holds more than 50% of the votes which is the same as holding 100% of the votes which is why you as a shareholder NEVER have received a proxy to vote on anything. See the last S-1. He owns a bit more than 9% of the common stock but 100% of the super voting preferred stock which makes him have a majority voting share so there are never any votes - just Jim Nixon’s decisions. While you are reading, read the part titled Corporate Governance” which says the company has no independent board and no code of ethics. You have no vote, no rights, no reason to ever expect any share of the profits (they can go all to Jim via salary and not the company) and nothing but OTC toilet paper to play with but that can be fun, and in the short-run even profitable.
It doesn’t really get you ownership - well at least not ownership of the company - it gets you 10% of the current stock outstanding AT THIS POINT. I don’t know what that means (well I do it means you get to play with those shares on the OTC) but even if you owned 100% of the common stock when Jim Nixon owns a majority voting stake (from the preferred shares) and almost no common and there is no board oversight or shareholders agreement it means you have no protection to ever share in any future potential profits (Jim can legally pay himself all the profits) and it means you can be diluted at Will or spun off or have more shares printed until you only own 1% of the stock -whatever Jim wants to do (I am sure he already thanks everyone for letting him use dilutive stock issuance to pay off the loan that was secured with equity in his house - very nice charity work everyone - easier than gofundme). And no, that isn’t how normal companies work - they rarely have concentrated voting rights without a significant economic stake in the common and they have boards, shareholders rights.