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ALYI doesn't need legislation to build an electric motorcycle with a sidecar in Africa (with or without a hemp battery or hemp materials) - it needs cash, technology, and more workers than one multi-tasking, multiple fraud committing CEO with a PhD in Public Economy (and he's no Jack Dorsey).
The debt is the company's downside is like saying I like that house on the flood plain except for the floods.
They have 5.7MM of CURRENT (due in less than a year) liabilities relative to 0.2MM of current assets including $78K of cash while free cash flow is a loss of almost $1MM in the first nine months of 2019. Again, these are NOT start-up costs - the company has never been profitable and the loss money on an OPERATING basis with costs of labor and ingredients and other OPERATING costs being 102% of the prices they charge to generate revenues - that is not sustainable - it's not due to fixed costs or start-up costs.
If that and a 20x dilution over less than a year look good to you than good luck.
The first company I wrote extensively about was LEXG - had a lot of haters there also - now it is perhaps the most famous OTC P&D ever. Also PJET and ALYI. I don't think WCVC is an OUTRIGHT fraud like those - the stores are real -it's just a money losing small restaurant chain without a source of long-term competitive advantage and without resources - but the association with Rob Goldman, the frequent PRs and lack of updates when the PRs don't go well (like franchising and the hurricane), the huge amount of current liabilities relative to revenues, cash, market cap or losses and the massive dilution from 33.9MM shares on 12/31/18 to 755MM shares on 12/27/19 are very worrisome red flags.
From the manner in which you dismiss these red flags as the work of a short seller shows you are not evaluating nor pitching this company rationally. To talk about debt paydowns and state that Goldman Sachs recommends this company is either dishonest or ill informed.
But it's VERY different. Legitimate research companies are paid for by the investors (independent research firms by the direct investors and sell-side research by the banks via fees paid by the direct investors) NOT the company being researched.
It's as if a doctor were paid by a cigarette company to determine whether or not you had cancer. Or a policeman was paid by the accused thief to determine whether or not he was a thief and that thief is going to, if found not guilty, continually steal but pay that same policeman for each not guilty report issued over time.
Rob Goldman is here to help but to help WCVC not to help investors hence the required disclaimers. If anyone has a real broker, as your broker, not me about paid research and ask them to look at Rob Goldman Small Cap research and give their opinion.
That socialist comment is an illogical red herring - I'm not saying researchers should work for free just that you should take into account who the researcher is working for - in this case it's paid for and working for WCVC - not for you and other investors.
Goldman Sachs Small Cap Value fund is a fund, run by Goldman Sachs which, like thousands of small cap funds, invests in small cap stocks. Goldmans Sachs does not hold any WCVC in its fund - it would be filed in a 13F if it did. Rob Goldman's Goldman Small Cap Research has nothing to do with Goldman Sachs's fund. It's as if a guy named Jim Fidelity started an U.S. equity research firm and then anyone thought that had anything to do with a Fidelity U.S. Equity fund.
Simply go to the link you provided and hit contact us to ask in the comment section if Goldman Sachs has ANYTHING to do with Rob Goldman, Goldman Small Cap Research and / or WCVC.
https://www.gsam.com/content/gsam/us/en/advisors/about-gsam/contact-us.html
On Rob Goldman's actual site which reviews WCVC:
https://www.goldmanresearch.com/
it says in the disclaimers on the Goldman Small Cap Research site:
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
and
Goldman Small Cap Research is compensated by the subject companies, related parties, or third parties for the Opportunity Research reports, updates, hot topics articles, alerts, snapshots, CEO interviews etc. found on this website
which is disclosed to be $4500 from WCVC when you read the WCVC report on Rob Goldman's site
They are not extinguishing debt - they are ADDING debt
They have "paid back" convertible debt by issuing new dilutive convertible debt and issuing hugely dilutive new equity and equity derivatives. Outstanding shares from June 30, 2018 to Aug 16, 2019 have gone from 19.2MM to 68.2MM a 255% dilution (and now to 755MM as of 12/27/19 in less than one quarter - this is sick)! They have not had a single quarter of positive earnings or positive cash flow since inception. If you add up from June 2018 to June 2019 (financials filed in theotcmarkets.com) they have lost $2.5MM in earnings, lost $1.1MM in operating cash flow and lost $1.2MM in free cash flow. Worst NET ISSUANCE of convertible securities from 6/30/18 to 6/30/19 was $200K (they issued $1.2MM worth of convertibles and paid back $1MM - this is in fact getting worse as in the first six months of 2019 NET issuance was $410MM issuing over $1MM and paying back about $600K. They note that they have issued 5 dilutive (converting at a 40 to 50% discount to the then current stock price) and high interest (8 to 12% interest with a 10% OID) convertibles form 6/30/19 to 8/16/19 (so VERY recently) for a total of $437K while paying off $303K old convertibles (thus the $1.4MM "paid off" but at the same time over $1.6MM of new debt was issued) - thus "paid back in cash" means "paid back in cash" with the proceeds of new convertibles or stock or derivatives not with any non-existent restaurant profits. These aren't my words - it's the WCVC's words in its own financial filings.
With COGS at over 102% of sales in the last quarter, they are not losing $$$ due to start-up costs, new restaurants etc. - they simply don't charge enough to pay for labor and ingredients and this is directly stated in the last 10-Q.
This leaves them with over $5.7MM in CURRENT liabilities relative to $214MM in current liabilities (and only $78K in cash and equivalents) - NOT a healthy debt paydown situation!
Goldman Sachs did not value them at $0.17. Goldman Small Cap is a paid for research service from Rob Goldman who values OTC companies at high valuations in exchange for payment (he demands payment for a report, says the payment doesn't guarantee a good review but never gives a bad review for paid research). It has NOTHING to do with Goldman Sachs and it says in his disclaimers on his site:
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
When you go to his site
https://www.goldmanresearch.com/
You hit "view more sponsored research" in order to see the WCVC report.
His disclaimer also says
Goldman Small Cap Research was compensated by a third party in the amount of $4500 for a research subscription service
His valuation takes no account of the massive liabilities (any decent analyst using sales multiples would come up with the enterprise value and then subtract debt) and uses shares outstanding of 79.4MM!! Way out of date to come up with $.17. If he came to the same $13.5MM valuation and then subtracted the $5MM net liabilities and then used the share count of 755MM shares out (as of 12/27/19 - it may be higher now) then you get a share price of $.01 - still much higher than it is now but $0.17 is a fiction even by this paid for researcher's methods.
He also has a paid for recommendation for scam company ALYI on this site
R/S expiration date IS January but January 2021! The statement actually says that an R/S can't happen SOONER than 20 days after the statement was mailed to shareholders (so about Jan 20 2020 most likely).
Pursuant to Rule 14c-2 under the Exchange Act, the actions described herein will not be implemented until a date at least 20 days after the date on which this Information Statement has been mailed to the stockholders, or on or about January
and then will be abandoned if the split is not filed by (what I assume is a year later) an unspecified day in January 2021.
If the Amendment effecting the Reverse Stock Split has not been filed with the Secretary of State of the State of Nevada by the close of business on January (*), 2021, our board of directors will abandon the Reverse Stock Split.
and since they will always have more than 50% of the vote they can obviously file a new R/S filing at any time if they do abandon this one.
Well expressed reasonable response. I don’t know but Nixon seems like a real businessman who is looking to make a tough financial situation work. I don’t know but he doesn’t seem like a serial liar or crook like Alex Walsh of LEXG or Randy Torno of ALYI. (The association with Rob Goldman who charges for paid research recommendations for several fraudulent companies is worrisome however). Too much financial risk for me and I don’t , given the debt and the lack of board power or shareholder voting rights, think that the valuation is cheap but I don’t think this is an ill intentioned fraud either. Good luck and keep up the research!
Except that they are not paying off debt with revenues. You pay off debt with profits and cash not revenues which are eaten up by costs. Costs of goods sold are 102% of revenues at last quarter - this is not startup costs or corporate overhead but as they say in the 10Q, expensive labor and ingredients that cost more than what they charge for the food.
As a result, they are actually issuing more new debt than they are "killing."
They have "paid back" convertible debt by issuing new dilutive convertible debt and issuing hugely dilutive new equity and equity derivatives. Outstanding shares from June 30, 2018 to Aug 16, 2019 have gone from 19.2MM to 68.2MM a 255% dilution! They have not had a single quarter of positive earnings or positive cash flow since inception. If you add up from June 2018 to June 2019 (financials filed in theotcmarkets.com) they have lost $2.5MM in earnings, lost $1.1MM in operating cash flow and lost $1.2MM in free cash flow. Worst NET ISSUANCE of convertible securities from 6/30/18 to 6/30/19 was $200K (they issued $1.2MM worth of convertibles and paid back $1MM - this is in fact getting worse as in the first six months of 2019 NET issuance was $410MM issuing over $1MM and paying back about $600K. They note that they have issued 5 dilutive (converting at a 40 to 50% discount to the then current stock price) and high interest (8 to 12% interest with a 10% OID) convertibles form 6/30/19 to 8/16/19 (so VERY recently) for a total of $437K while paying off $303K old convertibles (thus the $1.4MM "paid off" but at the same time over $1.6MM of new debt was issued) - thus "paid back in cash" means "paid back in cash" with the proceeds of new convertibles or stock or derivatives not with any non-existent restaurant profits. These aren't my words - it's the WCVC's words in its own financial filings.
This leaves them with over $5.7MM in CURRENT liabilities relative to $214MM in current liabilities (and only $78K in cash and equivalents) - NOT a healthy debt paydown situation!
No one issues a reverse split authorization as option value or a formality as it scares the heck out of people.
They are actually issuing more new debt than they are "killing."
They have "paid back" convertible debt by issuing new dilutive convertible debt and issuing hugely dilutive new equity and equity derivatives. Outstanding shares from June 30, 2018 to Aug 16, 2019 have gone from 19.2MM to 68.2MM a 255% dilution! They have not had a single quarter of positive earnings or positive cash flow since inception. If you add up from June 2018 to June 2019 (financials filed in theotcmarkets.com) they have lost $2.5MM in earnings, lost $1.1MM in operating cash flow and lost $1.2MM in free cash flow. Worst NET ISSUANCE of convertible securities from 6/30/18 to 6/30/19 was $200K (they issued $1.2MM worth of convertibles and paid back $1MM - this is in fact getting worse as in the first six months of 2019 NET issuance was $410MM issuing over $1MM and paying back about $600K. They note that they have issued 5 dilutive (converting at a 40 to 50% discount to the then current stock price) and high interest (8 to 12% interest with a 10% OID) convertibles form 6/30/19 to 8/16/19 (so VERY recently) for a total of $437K while paying off $303K old convertibles (thus the $1.4MM "paid off" but at the same time over $1.6MM of new debt was issued) - thus "paid back in cash" means "paid back in cash" with the proceeds of new convertibles or stock or derivatives not with any non-existent restaurant profits. These aren't my words - it's the WCVC's words in its own financial filings.
This leaves them with over $5.7MM in CURRENT liabilities relative to $214MM in current liabilities (and only $78K in cash and equivalents) - NOT a healthy debt paydown situation!
Actually insiders don't hold a ton of shares - it's more evidence of a scam - see the PRE14C they just filed - CEO James Nixon owns ALL of the super-voting shares (500,000) but only 14MM of the 754.9MM shares outstanding as of 12/27/19 so he owns only 1.9% of the economics (so his stock is currently worth only about 5 thousand dollars!!!) but he gets over 98.5% of the voting power! Thus other than to continue to stay employed he has almost NO economic interest - $5K worth of stock - I bet many on this board hold more - and yet the complete power to do whatever he feels like to the detriment of the majority of the shareholders.
"Pushing for franchises" doesn't mean anything if they don't get them. The one franchisee they PR'd was delayed, then explained that they were "impacted by a hurricane and will come back soon" and then nothing - just silence like whenever anything bad happens in a P&D company. No - the over $5MM of CURRENT (i.e., due within a year and huge relative to revenues) liabilities has not been accumulated to pay lawyers etc. you linked to the financials - read them - they simply do not have high enough revenues as their labor and ingredients costs (they actually SAY this as well as showing that operating costs basically equal or are higher than revenues even without corporate overhead, capital expenditures for growth, etc.) There has been NEGATIVE progress in profitability and opening more unprofitable restaurants using death spiral converts and dilution from "cheap" equity buyers like the ones on here does not mean they are making progress in any category other than scamming stockholders. Literally anyone can grow revenues - growing profits is another thing and if it doesn't happen then the revenues eventually stop. WCVC is making NEGATIVE progress on growing profits - it has become less profitable (on an OPERATING basis - i.e., this is not the growth / start-up costs) over time - not progress. My older posts have many details and source references on these topics.
Revenue is not "making money" - they don't make money on an operating basis, they lose more on a net basis, and they accumulate debt and have to dilute their stock constantly to refinance. I have spelled out all of this several times and it is also in the 10-Q you linked to. The revenues don't matter for a franchisee. They need to see that the parent company has the financial resources to provide support in training, buying power, and brand recognition none of which a small debt laded, unprofitable restaurant has. I have explained in great detail how they have really not paid down debt - they say they have paid down debt but they have actually issued more debt than they have paid down over the same period - that's not healthy.
Yup - Tim Hortons (which was owned by Wendy's before a spinoff and sale to Burger King) had a footprint in Canada that Burger King wanted, it also allowed Burger King to headquarter in Canada as a tax inversion deal, had over $6.5B in sales, 4,500 restaurants, a 50 year old dominant (#1 quick service in Canada by a large margin) brand was profitable with half a billion of net income in the year before the buyout and forecasted to make over $2B in free cash flow over the next 3 years, almost 100% franchisee operated. WCVC has none of these advantages - it is just a small debt-ridden money losing (and not due to start-up costs - it loses money on an OPERATING basis which they explain in their own financials is due to having high labor and ingredient costs) mexican restaurant, burger and pizza operator.
Why would McDonalds buy a highly debt-ridden money losing (and its not only start up costs - WCVC loses $$$ on an OPERATING basis) operation like WCVC when they could just add CBD (which they can buy at much lower prices due to their buying power) to whatever they want if they want to be "current" just like Carl's Jr did? A McDonald's buyout will NEVER happen - they are not idiots.
What do you mean formality? They did it for fun? Did AAPL also file an RS for the same formality? What is the reason for the “formality”?
It isn’t as if he just failed. He went dark, ran, and left shareholders holding the bag without another word. What did he learn from promising African contracts that never came about at ANCE? He learned he could do it again and get away with it. He never paid for his mistakes - shareholders did so he’s happy to transgress again, make $$$ and cheat as many as he can.
But why would you believe Torno? He lied when he said he had African contracts at ANCE and he gave away PJET for nothing. Worst, he went dark on both of these without issuing an update or an explanation. Take the money, run and hide. A coward who disgraces the US military. If someone cheats you twice why would anyone ever give him a third chance?
They did not REALLY pay down debt. They replaced old debt with new debt and dilution leaving them with more debt than they started with - it's a real stretch to call that a pay down.
They issue more debt than they pay off. They paid off $1.4MM in convertibles but issued more than $1.6MM in the same period including issuing more debt than they paid off for 2019 and for the last quarter so it's not getting better plus they have also issued non-convertible debt, continue to lose $1-$2MM per year and dilute the stock by 255% in 14 months in order to "pay back" debt. That's NEVER a good sign.
This is not a profitable company generating cash to pay back debt. They have "paid back" convertible debt by issuing new dilutive convertible debt and issuing hugely dilutive new equity and equity derivatives. Outstanding shares from June 30, 2018 to Aug 16, 2019 have gone from $19.2MM to $68.2MM a 255% dilution! They have not had a single quarter of positive earnings or positive cash flow since inception. If you add up from June 2018 to June 2019 (financials filed in theotcmarkets.com) they have lost $2.5MM in earnings, lost $1.1MM in operating cash flow and lost $1.2MM in free cash flow - the losses are on an OPERATING basis - this is not a start-up cost - they even say the losses are due to supplies and labor being more expensive - that is not a new restaurant start-up cost. Worst NET ISSUANCE of convertible securities from 6/30/18 to 6/30/19 was $200K (they issued $1.2MM worth of convertibles and paid back $1MM) - this is in fact getting worse as in the first six months of 2019 NET issuance was $410MM issuing over $1MM and paying back about $600K. They note that they have issued 5 dilutive (converting at a 40 to 50% discount to the then currebt stock price) and high interest (8 to 12% interest with a 10% OID) convertibles form 6/30/19 to 8/16/19 (so VERY recently) for a total of $437K while paying off $303K old convertibles (thus the $1.4MM "paid off" but at the same time over $1.6MM was issued) - thus "paid back in cash" means "paid back in cash" with the proceeds of new convertibles or stock or derivatives not with any non-existent restaurant profits. These aren't my words - it's the WCVC's words in its own financial filings.
Yup - just about 0 short interest as I said - just about 0% (0.055%) of the float and just about 0 (less than 0.0005) days to cover - shorts have not been an issue here in the recent drop and have not really been significant (at less than 0.5 days to cover) even at peak shorting activity in August.
There is no short interest in this stock - there are no shorts
I care because Randy Torno is a crook who uses the good reputation of the US Army to help steal millions on at least three scams
Randy Torno ran a scam at both ANCE (CEO) and PJET (Board Chairman) so the probability is he is running one here. At ANCE he even promised that he had a Kenyan contract signed for tens of millions of revenue. So when your CEO is 0 for 2 for scams I don't think I allow him a third strike before he's out. I agree though that he might have a better pump and dump in him in the future!
My favorite part of this latest PR is that the "major brand name" for a "joint announcement" PR'd on 12/5 turned out to be not only still unnameable (which may be for the valid reasons stated in the PR) but also that it is a brand name JV for a CONFERENCE not a PRODUCT! That was HILARIOUS!
The financials on theotcmarkets say it is South American governments - I think Ecuador and Peru for data management. The funny thing is that the revenue has never been paid. It just piles up in accounts receivable rather than cash which shows that their customers have owed them money / not paid for more than a year and a half. Not a normal receivables cycle and definitely a red flag in forensic accounting.
It certainly didn't when the same CEO Randy Torno (was CEO of ANCE and now is for ALYI) announced contracted African sales for ANCE and then just let the company go dark without ever following up after those promised and repeatedly PR'd revenues never actual happened years even later!
The restaurants are real and making sales. Just not profitable and certainly not enough to overcome the mountain of debt. Did you speak to regular workers and managers who see sales (which are fine) or to accountants who see profits (which are horrible and not even due to start-up costs - they are not profitable on even an OPERATING basis and also have a ton of debt ($7MM of liabilities vs. $2.5MM in assets) to repay relative to revenues ($3.9MM annoualized))? The two types of employees would have a VERY different view of "business was really good."
Shareholders should only care about the debt and the profits (revenues only if they signal future profits and since OPERATING profitability is getting worse as they grow - i.e., not even including start up costs - costs of ingredients and labor relative to what they can sell a burger, pizza or CBD water or powder for is negative and getting worse - see the 10-Qs) this NOT "really good" it's "really bad."
Too bad the PR is from Randy Torno who also PR'd lies about ANCE including supposedly signed major African contracts and apparently just gave away / folded PJET when he was Chairman (it was supposed to have a name change and a JV with WCVC which never happened in exchange for giving it to PURA - another way of just walking away from it). Both are now "dark or defunct" on theotcmarkets. Even if one were to irrationally give him the benefit of the doubt and say that these companies failed due to things beyond his control and they were not lies he never PR'd explanations months or years after the disasters - just ran and hid. Not very military of him. To believe a PR from him is like saying that one might consider buying into Bernie Madoff's new investment fund as he is predicting it will do really well.
Super lame attempt to get it on the most discussed board by Spot On. I know this is just helping. Spot On Bot On!
Where are they? That order confirmed two months ago was initially announced more than a year ago.
Where’s the video? That PR was 2 months ago
I’m just saying if they agreed to do consulting work for over a year and a half without getting paid they are idiots and if they agreed for a real period of time like 30, 45 or 60 days they are getting cheated. NO real company has days receivable of 540 days. None. 90 days will have Wall Street saying your collections methods are poor.
Especially with a company like ALYI which finances at over 117% per year (see my old posts about the costs of their death spiral convertibles). In a year and a half the discounted value of $60K in revenue at this financing rate is closer to $25K. This it would be insane for ALYI to finance/float the revenue they are owed by allowing 540 day plus payment terms.
This is NOT normal. It’s nonsense.
See the link below for the warning from Forbes when receivables grow much faster than revenue
https://www.forbes.com/2002/12/18/cz_tm_1218sf.html
The news on today's PR comes down to
1) A summary of data that came out days ago from the 10-Q (i.e., not news)
revenue up 21% while Cost of Sales up 56% (that doesnt include start up costs - it is all operating costs!) - bad old news!
gross profit negative for first nine months compared to positive last year
debt higher and the cost inputs and of finding employees higher
2) A summary of franchise efforts with no update (promised weeks ago) about the first franchise. Just that they have established "franchise sales" in 31 states (since they didn't give any detail it most likely consists of the website that says please contact us to franchise)
So more disappointment and the repetition of bad news and the omission of details we were supposed to get weeks ago - that's not "HUGE NEWS"
Yes. Your quote is accurate when AR are paid within normal terms like 30, 45 or 60 days. When they are not paid within 540 days it means you have a serious problem. Cash is the lifeblood of a company. Receivables only represent money coming into the company if paid eventually. Unpaid receivables that haven’t been paid and haven’t become cash within 540 days is a fraud, a nightmare or just really really bad business especially for a company with negative operating cash flow like ALYI. Just think about it - would you buy a company where none of its customers have paid and some (or it looks like all since it is always $60K per quarter) have still not paid what they owed you a year and a half ago? That is not normal. Nobody wants that. It’s a sign of something seriously wrong.
That revenue you are excited about is a red flag for something odd. It has never converted to cash. Instead accounts receivable just keeps growing now to $360,000 - a year and a half of revenue. I.e., they are still owed payment for “revenue” from 18 months ago and have not been paid. Also it is odd that it is from an unrelated source - project management in data analytics in Columbia and Peru. Revenue that never becomes cash is not useful to anyone.
Yeah. So try to order one on that fake outdated site from the once promised retail sales of 2018 that you provided a link to. It’s ok for a company to change its strategy (but in this case they changed it as there were no bikes and wholesale sales in Africa without a deadline is a lot tougher to verify than retail sales in the US promised by Christmas 2018) but it’s not ok to keep a meaningless holiday shopping site up. It is in fact fraudulent.
Tentatively plans to issue an update on tentative plans - that’s a perfect example of why everyone loves this stock. The update will be exactly what was in the PRs leading up to this one - they met, everyone loved each other and their partner is investigating the ICO with IW global while for some reason ALYI is paying Rob Goldman for a feasibility study of the ICO after which Rob Goldman will put out a sponsored research report saying that based on the possible ICO this is worth a bunch of $$$. Rinse wash repeat the PRs.
I forgot Ed Bollen was involved with this until I read the 10-Q now I definitely vote scam (see ALYI, USMJ, PJET and more).
I think this company is a joke but I strongly believe that they will submit the 10-Q within 5 days. However, why they can't slap together some type of franchising update they promised for 3 days ago and why even a joke company would think it is OK to just ignore this deadline is a mystery.
Does anyone want to invest in a franchise with a company that is not only debt-laden with a business that loses $$$ at the operating cost level (and much more overall) but also doesn't have their act together enough to put together a 10-Q in 90 days (I love their reason - it's late because we couldn't do it in time) and a simple update within 3 days of it having been promised (and then doesn't communicate as to why it is late or if it is coming)?
They'll give you great support for your franchise operations!!!