$ALYE - Based on my own experience of trading the OTC for close to 20 years, is that people often perceive a preferred placement in an OTC company as an opportunity for insiders to dilute and dump common shares through increased toxic financing while maintaining total control over the company.
And I would say approx. 90% of the time this holds to be true. Preferred shares are acquired through grossly discounted prices or at times with none of their own money except the few hundred dollar state fees to create the shares for the sole purpose to maintain control while toxic debt destroys common shareholder value.
This is not the case here. If looked at closely, we can see that they were very cautious in the building of $ALYE with a definitive long term strategy to success.
From starting off with the limited costs associated with obtaining a shell and listing on the pink sheets to using big banks to finance startup, to a three stage internal restructuring that took almost 18 months to complete to eliminate the outside debt used to grow the company, they have held strong to their goals.
This type of investment strategy allowed them to concentrate on preliminary acquisitions for rapid expansion while allowing the option of a BK and quietly disappearing from the pink sheets in the event they failed.
When conducted properly and with it's intended purpose, a preferred placement by the founders, insiders, and board members, using millions of dollars of their own money to payoff 100% of outside debt, is a huge green flag that big board up listing is in the future plans. And this would not be the first time this management teams has done this successfully.
Aly has grown from a mere $250k in assets to well over $35 million in under 5 years. Their revenues have grown in the same time period from zero to the over $11 million reported last quarter which represents over a 25% YOY 9 month ending increase.
Also if we note, they conducted a reverse split of 1 for 20 right before they began their internal restructuring. This here is also a perfect example of the true purpose of the use of reverse splits to protect shareholder value, to lower opportunities for hostile takeovers, squeeze out owners of shares from the previous shell, and greatly increase shareholder equity. This process is almost always found in the history of OTC companies that have successfully broken the chains of the OTC to successfully up list to the NYSE or NASDAQ.
So, I'm excited. After doing this for so long I can honestly say this company is a gem and has every catalyst I look for when going in for the long haul. They currently reflect a $2 book value, a .03 eps., double digit YOY revenue growth, triple digit qtr. over qtr. growth for Q3 2017, and a whopping EV/EBITDA pps of $7.35.
Yesterday they were up listed to the OTC QB tier and I'm betting a lot of money that an up listing to the NYSE is most definitely in the plans.
