Artificial Life Inc. (ALIF)

[sfitz]

So I've had a chance to review the 10k and the flurry of comments here and mostly I have the same sentiment.

They had a great year, but a poor fourth quarter, made worse by the fact that the CEO is leaving the public to guess on details by not doing a cc. In this market, this only leads to rapid price drops as people exit first, ask questions later.

- They could have done a better job putting into perspective fourth quarter sales, especially with expectations running high with the iPhone/Adnoid platform release. You have to backtrack a bit, but if you take out the Q3 reseller agreement then we have a 6.5% increase from both Q2 to Q3 and from Q3 to Q4, but still - yoy growth has slowed dramatically and this kind of decrease scares people away.


- Why were the margins down significantly in Q4? They added $4M in G&A and Engineering/cost of sales in the fourth quarter - with G&A in Q4 being greater than for the first nine months? Maybe there is a good reason but it should be explained much better than "The decrease of net income was mainly due to the effect of a one time provision for a doubtful account of $731,500 in Q4 2008 and a one time gain from the extinction of liabilities of $685,130 in Q4 2007." Adding $700k back into the net income still comes up real short of where the number should be.


- I am concerned about A/R. They can't be proud of the fact that in almost a month and a half they only collected 4% of the outstanding receivables? "As of February 9, 2009, approximately $548,000 of this amount had been collected." Again, give some commentary on why this is and what's being done about it so they don't have to issue shares to fund growth.