Density12903: Re: As far as actual dollars, it appears NVEI has used about 26 million in R&D since 1999 when New Wheel was introduced.
Once again, I'm not sure which filings you are looking at. Here are the R&D expenditures taken directly from the 10-K documents:
1999: -0-
2000: $ 815,362
2001: $ 839,402
2002: $1,298,560
2003: $ 117,901
2004: $ 92,500
That's 3,163,725 *total* spent on R&D. Now, its true that they spent more on the acquisition of New Wheel, and the licensing and development agreement with ANI. However, Blevins and Shepard gave the money (shares) back so that does not count. So, throw in the 5.7 million spent on ANI (which shows up as a licensce acquisition, not R&D), and you still have less that 10 million. How did you come up with 26 million?
I saw accountings documenting millions of shares paid to Mike Sheppard and Al Blevins, as compensation in the hope they had what it took to commercialize this technology
I think you are confused. The technology acquired through the New Wheel (Blevins and Sheppard) acquisition is not the same technology that they are working on now. The New Wheel technology was abandoned. It does not work. Blevins and Sheppard gave back their shares, less a small amount to settle a law suit. The *first* truly disruptive technology was discarded because it did not work.
Then, by some miracle of happenstance, they found ANI and discovered *another* truly disruptive technology. They paid ANI $5.7 million to license their technology and to produce an FPGA. ANI has their FPGA, but NVEI still does not - fully 3 years after it was first expected - and will not have one, according to the SB-2, until as late as FY2006.
While some would say it was excessive, it is a common practice in start-up companies as a way to finance product development.
That's fine, if the money is spent on product development. Look at the filings. It's not.
To the uninitiated, or to those who just want a reason to argue, it appears cash expenditures were exorbitant. On corporate balance sheets stock distribution is recorded as cash.
Once again, it seems like we are looking at different documents. Look at the balance sheets. Find the entry for "ADDITIONAL PAID-IN CAPITAL". That is the amount of *cash* paid by investors for shares. In short, it is the amount of cash money raised by the company over the years. The last 10-KSB had the total amounth of paid-in capital at over $55 million.
Let me be clear. That's over $55 million in cash raised by the company, of which they spent just over $3 million on R&D.
Nowhere did I see large cash outlays to employees.
There are large cash outlays to catagories in the filings that are very questionable. Look at the cash flow statements to see where the money goes. The single largest catagory for cash outlays is "consulting fees and compensatory elements of stock issuance". Best I can tell, about 75% (a guess - I have not done the math, but its a lot) of the money raised by NVEI has gone to "consultants" or spiffs for raising money. The consultants are not engineers or anything else related to R&D or the cash outlays would have to appear in that column.
While they certainly have a right to free speech, misinformation, (I hope not willful) inhibits those who are less sophisticated from getting objective information.
You claim to have been studying the filings, yet you have drawn conclusions that are grossly inaccurate. I am assuming this misinformation is not willful on your part.
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