"Artificial Reasoning" hahaha. I'm sorry, that one tickled me because I think it may well apply to their method of valuation of intangible assets.
Valuation of Intangible Assets: Top Methods:
1. RRM
2. WWM
3. MPEEM
4. Real Option Pricing
5. Replacement Cost Method minus Obsolescence
and now....
6. Artificial Reasoning Method
Correct me if I'm wrong, but as we know from the 8K of 04/03/23 the PXR Platforms + El Dorado License were jointly appraised at an eye-watering cumulative value of $3.1Bn. One hesitates to ask, but if these “Assets” were worth this much in dollar value on the open market, why didn’t the owners simply divest to A-another interested party, for the cash value less an attractive discount to help broker the sale of said assets?
Furthermore, there seems to be no relation between what the failed Arknet platform, actually does (or more accurately, doesn't) and these “assets”, save that you could effectively graft anything onto Arknet and claim there were business synergies.
For anyone with even a rudimentary knowledge of business and how Mergers and Acquisitions work, or even complete laymen with good common sense, would it not be safer or simply more logical to deduce that at the appraised valuations, there were no Private Companies or VHNWI interested in procuring said assets at a cash value anywhere near the $3.1Bn price (and I’m willing to bet, not at several zeros off the right-hand side of that price too).
Therefore, it makes sense for the owners to use a publicly listed company (albeit a shell with zero assets) to dump their overvalued offerings into and ultimately realize some value from them through the capital market mechanisms.
Yes, that’s correct before these “Assets” were grafted onto the business, the company was worth nothing and here’s the evidence:
$2,643,500,000 + 514,000,000 = 3.16Bn. According to this statement in the 8K, that’s the total assets the business now boasts of having:
“The fair economic value determined for the above-described Exclusive Capital Lease of the PXR Tactical Platform and the PXR Strategic Platform together with the recently announced royalty-free El Dorado grant of an Exclusive Use-license appraised at more than $514.4 million have increased the Company's shareholders' equity to over $3.1 billion”.
So, “increased the company’s shareholder equity to” (not by, but to) means that the combined value of all assets now is equivalent to the addition of these three assets (and their spurious valuations) alone, a stark admission by default, that Arknet itself, despite all the shareholders capital invested in the developer, paid consultants and many other sundry costs, is actually worth the square root of zero in asset value. Interesting that.
So, Arknet is worth zero (presumably they used the same method to appraise its value as the other three) and all new assets added to the company couldn’t be sold in the open market, hence they now form part of a newly named (if not formed) company ARtelligence Holdings Inc that is about to undergo a significant corporate exercise to massively increase the value of their share price and reduce the OS.
Perhaps they could start selling seafood products next because something sure smells fishy about all this.
PS 40M Common Shares will have been issued post-RS for “services rendered”. That’s a lot of shares that may (or may not of course) be looking for healthy bid support.
[Thanks to Valentiam Group]
AI
