junkHustler,
Press releases are indeed a very powerful tool.
As you mentioned below, you're here because of Alterrus's press release. You suggest that it was an attempt to alleviate concern which in your experience is a red flag.
I think you need to balance your perspective by asking the question; Why did George Afflek issue his press release in the fashion he did? In my eyes, when politicians grand stand like that ... it's also a red flag.
Its interesting that the tone of your post seems to side with Afflek before examining the entire issue. In other words, Alterrus is somewhat assumed guilty in the court of public opinion - until proven innocent. ("If everything is sound then there's nothing to worry about")
Incidentally, I think you are the norm by the way. I think most people would react in a similar fashion. Its human nature. And ... I also think that George Afflek has a keen understanding of that. I suspect that George knew by embellishing the numbers and setting the appropriate tone, he'd ensure other press outlets would pick up on the statement. And, a quick Google search suggests that he's been successful.
Afflek's letter is clearly sensationalized. For instance; embellishing the $52M deficit number. This statement without further investigation is ridiculous. The current management team came in Jan 2011 to take the Verticrop technology and commercialize it. On the day they started they're new jobs - Valcent had a deficit of $51.3M. That mess was based on all the misadventures which past management teams created. The new management team immediately closed all those doors and refocused the companies attention on Verticrop. They have amassed an extremely small deficit and yet have built and are successfully operating their first commercial system.
Why didn't Afflek comment on this but rather write the press release to insinuate that Alterrus's verticrop system is responsible for $52M of investor's lost capital?
In 2 years, the current team has raised capital through placements (see the financials). It's private sector financing not public sector financing. The city was able to take an underused parking lot rooftop (only the roof not the whole lot) and create a consistent income stream from that portion of the parkade for the next ten years which will benefit taxpayers. In addition, taxpayers benefit from the construction spending, new job creation and a sustainable supply of healthy nutritious food. As well, Alterrus will be a new tax payer.
Obviously, they wouldn't have walked into a bank and attained construction financing with no history of business income and $52M in lost investor capital unless the economics of this new project made sense to the lenders. Banks don't give their money away that easily.
In 3 months, the greenhouse was sourced, built, planted, harvested with secured sales commitments for all of its produce according to today release.
Greenhouse businesses are notoriously capital intensive businesses as I'm sure Steven Fane can attest. But lenders like these deals because food is a necessity to life and cashflows are fairly stable.
I'm not sure what Afflek's angle is or whether he's legit. But it will be interesting to follow this in the coming months as I'm sure we'll learn more.
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