More to the point, if the EOY was pushed to Dec 31
Post# of 11107
Posted On: 10/08/2015 8:05:18 PM
More to the point, if the EOY was pushed to Dec 31, we need to see an amended Q2 10Q for June 30 and we shall look forward to the Q3 10Q due out in mid November. The next fin will be April 1 as that will be the FY15 10K and that will be followed by the Q1 10Q due mid May. Only the 10K needs to be audited, but, the preceding Qs need to be coherent with the 10K and thus we might see a few amendments between now and April 2016.
I see this as a good thing and here is why:
They want to be fully reporting with audited fins so that they can up-list out of the pinks. This is a good thing for us share holders as it brings in more potential investors given the higher visibility in the upper tiers of the market. However, to do this, they need to have a very clean paper trail of assets and liabilities. We all have seen the kind of book keeping that was done under the previous leadership. As such, the accounting team charged with this task has their work cut out for them. So, they will start with auditing all of the tangible assets of the company and their locations. They will need to make sure that the ownership rights are clearly documented and the values are clearly identified. Of course, they can simply zero out any "questionable" assets that came over in the merger. Also, they will need to identify any open liabilities from the merger or else prove that they are not carried into the new company. Once all that is done, then the focus is placed on cashflow and expenditures. Given that this company is a collection of partnerships, the fiduciary arrangements and equity stakes need to be clearly stated, agreed upon and included in the fins. Finally the expenditures need to be documented, categorized and tabulated as well as all revenue components. This is a time consuming task for a new company as they may not have all of the usual systems in place to document this as they go.
Bottom line: I was very skeptical when they said they could turn audited fins by October. By pushing EOY to December buys them about 6 months time to get all of this done. That is much more realistic especially if they are able to zero out PVEC assets and liabilities. Of course that will take some legal foot work to complete, but, 6 months should be sufficient.
Second silver lining here is that they clearly are not going to draw on the share holder equity in the interim given that the pps will be held artificially low until the fins are released. They need to establish credibility again before the pps will appreciate. And, they need the pps to appreciate before they can start borrowing against the AS or soliciting for a funding event given their reluctance for dirty money (thankfully).
At any rate, I see this as a net positive, not a set back. and yes...I am going to do some more shopping.
I see this as a good thing and here is why:
They want to be fully reporting with audited fins so that they can up-list out of the pinks. This is a good thing for us share holders as it brings in more potential investors given the higher visibility in the upper tiers of the market. However, to do this, they need to have a very clean paper trail of assets and liabilities. We all have seen the kind of book keeping that was done under the previous leadership. As such, the accounting team charged with this task has their work cut out for them. So, they will start with auditing all of the tangible assets of the company and their locations. They will need to make sure that the ownership rights are clearly documented and the values are clearly identified. Of course, they can simply zero out any "questionable" assets that came over in the merger. Also, they will need to identify any open liabilities from the merger or else prove that they are not carried into the new company. Once all that is done, then the focus is placed on cashflow and expenditures. Given that this company is a collection of partnerships, the fiduciary arrangements and equity stakes need to be clearly stated, agreed upon and included in the fins. Finally the expenditures need to be documented, categorized and tabulated as well as all revenue components. This is a time consuming task for a new company as they may not have all of the usual systems in place to document this as they go.
Bottom line: I was very skeptical when they said they could turn audited fins by October. By pushing EOY to December buys them about 6 months time to get all of this done. That is much more realistic especially if they are able to zero out PVEC assets and liabilities. Of course that will take some legal foot work to complete, but, 6 months should be sufficient.
Second silver lining here is that they clearly are not going to draw on the share holder equity in the interim given that the pps will be held artificially low until the fins are released. They need to establish credibility again before the pps will appreciate. And, they need the pps to appreciate before they can start borrowing against the AS or soliciting for a funding event given their reluctance for dirty money (thankfully).
At any rate, I see this as a net positive, not a set back. and yes...I am going to do some more shopping.
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