AWSL management’s strategic “Deer in the Headlights” strategy!
Well, well, the IHub message board was alive and well this past weekend even if the AWSL trading volume is temporarily comatose. As always, I enjoy and appreciate SW’s spirited defense of the Company’s management – Kool-Aid and all.
IMHO, AWSL isn’t ready to run with the big dogs until its management is willing to come clean and issue timely financial statements with full disclosures – the good, the bad and the ugly - warts and all! We know that management isn’t bashful about beating the drums for the Company’s successes, so let’s see the long-delayed 2009 audit report and the complete financial picture through Q3-2010. Personally, I would much rather use the Company’s financials as the scorecard with which to grade management’s performance rather than its press releases… While I do comprehend and appreciate the future benefits that seem always to be just around the corner, I would like to know where we are now as of the end of Q3.
Much of the negativism on this board appears to have come from management’s past actions of inflated hype and heightened expectations in the form of unfulfilled press releases. Accordingly, I submit that calling IR is NOT the proper way to resolve these issues and restore management’s credibility. Simply issue credible financial statements with full disclosures on a timely basis for all to see and give IR a much needed respite from addressing bits and pieces of the big picture on a piecemeal basis one investor at a time. To argue that there are higher priorities than restoring management’s credibility (by issuing timely financial statements) is to completely miss the boat on sound corporate governance. In the absence of the start of construction, management’s credibility is all that AWSL has going for it.
In my opinion, management can issue the financials and start to redeem its credibility or they can go back to hyping the Company’s “green-sizzle” and 20-year cash flow potential absent owning up to the Company’s much diluted book value per share – of course, that’s only my opinion. So what’s the problem – a current market price per share that may be more than 100 times the Company’s net book value per common share - unless the Company’s net book value per common share outstanding isn’t even a positive figure! Who knows without some credible timely financial reporting prepared using generally accepted accounting principles?
Accordingly, I query IR to respond to the following:
• The Company’s unaudited 2009 balance sheet stated Total Capital (shareholders’ equity) as $3.4 million. After removing the $2 million of “paid in capital” created by the aborted HPSC acquisition, the $1 million funding from the Preferred Series A securities, the questionable collectability of the $.2 million advances to Hybridyne and the cumulative unreported startup losses through Q3-2010 is there currently a positive net book value accruing to the common shareholders?
• Considering the lack of any current income will AWSL be forced to report as a “going concern?”
• What is the status of the long-delayed 2009 audit report?
• How many shares of common stock are currently issued and outstanding? The Company’s website reports “approx 24,000,000 Post HPSC Acquisition.” Is that correct? Disregarding the restricted shares from the two stock dividends, if I start with approximately 30 million shares outstanding at yearend 2009 and deduct the 3 million HPSC shares shouldn’t there be 27 million shares outstanding? What happened to the other 3 million shares?
• Is the Company able to pay its officers and employees in cash or does it still compensate them with shares of common stock?
• Is the Company’s financing for the pending contracts still in tact?
• What is the current status of any pending litigation?
• When can we expect to see the 2010 interim financials? Just how long can it take to generate the Q3 financials with no construction and no income?
My guess is that management has made the strategic “Deer in the Headlights” decision that the stock price is treading water well enough (until this morning) in the absence of any new construction, in the absence of releasing the 2009 audit report and in the absence of any 2010 interim financial reporting that they won’t risk sharing the details of the Company’s financials with their shareholders until they have started the construction contracts; good strategy, perhaps, but not exactly the model of good corporate governance and managerial credibility in my book. One can only wonder how long the current PPS can be sustained with the dearth of buying interest to support the floundering stock price and the current vacuum created by management’s lack of transparency and forthright financial reporting.
As for me, I’m willing to take my chances with evaluating this startup Company’s financial statements and reading between the lines regarding the future prospects of the pending construction contracts, so to paraphrase Rod Tidwell (in Jerry Maguire (1996)), “Show me some credible financial reporting and I’ll show you my money!”
Gilda.
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