Zoloto claims it bought into the mill on 1-1-14. Zoloto could not have bought the mill for cash. They had no cash at the end of December, 2013. Zero. By the end of March, 2014, Zoloto's investment assets increased by 256,096 and there is a corresponding convertible promissory note with a date of 1-1-14 shown as a liability in that amount. Since the investment assets increased and the convertible note increased by that amount, it looks like the new investment assets were acquired by giving a note in the amount of 256,096. Although Zoloto had no revenue and only lost money, by the end of March their total assets had increased and the total liabilities decreased. It's a miracle! The shares stayed the same, according to the unaudited financials. It is impossible for the assets to suddenly increase and the liabilities decrease if there is no revenue and they only lost money and issued no shares.
This raises the questions: If Zoloto did acquire part of the mill from AGCZ or NWGC, then why would Boca Bob deny any connection with Zoloto? Since the AGCZ financials have been consolidated with NWGC, Bob cannot rationalize that it is something done by Andes and not involving NWGC, since everything involving Andes is consolidated into NWGC.
Also, if Zoloto bought into the mill by giving a note, then whoever took the note gave up assets and got a note from an insolvent company in return. What company would give up profit making assets and take a note from an insolvent company in return? Since Zoloto was insolvent and had neither revenue nor income, the only way they could possibly pay the note would be from the profits of the mill. Now, if the mill were producing a profit, why would a company give up a profit producing revenue stream and only get the note proceeds in return? For Zoloto to make any money, they would have to make more from the mill than they are paying in interest on the note. Giving up the interest in the mill and getting only interest on the note means the seller of the mill interest will make less than if they had continued to own the mill outright, since Zoloto has to make a greater profit from their new interest in the mill than the interest payments on the note. I could see selling an asset for cash, but to sell an asset for only the note proceeds means the seller is being shortchanged, since the asset sold has to produce more profit than the note payments or the note payments will not be made. So, the seller of the mill interest either got shortchanged, or they will not be repaid, or, perhaps the convertible nature of the note means the seller of the mill wants to dabble in selling the converted stock and perhaps make some money? Maybe it was convertible at .0001?
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