Replies to post #52812 on Solei Systems Inc. (fka SOLI)

[PamelaR]

If the software is actually worth $20M, and we purchased it for $2M, then the difference would be found under goodwill/intangible asset.

In that case, it would be negative goodwill, and would be recorded as gain on the income statement. $18 million gain would certainly have an impact on their taxes, which would be a good reason to lower the valuation to $2 mil.

So, the $64,000 question is...How much was the stock worth that Korangy was given in lieu of cash payment? If the stock payment didn't match the valuation of the asset purchased, there would need to be either goodwill on the balance statement (the stock paid was worth more than the value of the asset), or gain on the income statement (the stock paid was worth less than the value of the asset purchased).

And, therein lies the most likely problem with the financial statements--or, at least, one of the problems.