Borislav Tonev

Alexandria Advantage Warranty Co (OTCMKTS:AAWC) Hit by a Nasty Pump

by Borislav Tonev November 12, 2015

In a matter of just six and a half hours, AAWC managed to incinerate a whopping 49% of its value and it closed the session with a price of $0.003 per share.

Some of you are probably wondering right now if AAWC can bounce back up and give investors a chance to return at least some of their money. We've done some research, however, and we can tell you that this isn't really the most appropriate question at the moment. What you should really be asking yourself is “Is there anything at all to support AAWC at the current level, or will it continue burning through investors' hard earned cash?”.

The simple fact of the matter is that the company's situation is absolutely appalling. Take the latest press release as an example. It's almost three months old and it says that AAWC is going to sign a contract with a franchisor of automotive service and repair centers before the end of Q3. In case you haven't noticed, we're now well into Q4, but there's been no updates on the deal.

We've mentioned numerous times on these pages that basing your investment decision on press releases alone is never a good call. We've always maintained that you should carefully read through the financial statements as well, but AAWC's filings are so badly put together, that they're no help at all.

The management team say in their report for example that the company owns 100% of Jinshilin Techno Ltd and that it also has controlling interest in Asanté Technologies, Inc which, supposedly, provides Apple Computers with ethernet networking solutions. Apparently, however, the people behind AAWC have no idea what the two subsidiaries' financial situation is.

The figures that they can show us are coming from a third daughter company whose acquisition earlier this year resulted in the name change from TechnoConcepts to Alexandria Advantage Warranty. They look like this:

  • cash: $4,172
  • total assets: $226,765
  • no liabilities
  • NO revenues
  • quarterly net loss: $25,309

If anything, the financials above make the whole thing even more confusing. The statement itself says that there are absolutely no liabilities, but the notes accompanying it talk at some considerable length about numerous convertible notes. For reasons that are beyond our understanding, they also talk about the period ended June 2007.

The filings really are appallingly uninformative, and they should serve as a pretty good example of how loose pink sheet regulations are. That doesn't necessarily mean that a bounce is impossible, though. We, for one, have seen stranger things happen on the OTC. It does, however, mean that you should be cautious around AAWC.

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