While Southern ITS International, Inc. (PINKSHEETS: ALCD) has undergone a handful of name changes since their incorporation as Numeric Two Corporation back in 1984 one thing the company hasn’t been able to shake is the considerable net loss they have accumulated over the past four years, a staggering $30,938,055. Of course the company believes they are heading toward solid ground now that they have completed the acquisition Southern ITS Corporation, a move that serves to transition and expand ALCD’s position into the electronic security integration sector.
With Southern ITS Corporation now operating as a wholly owned subsidiary of ALCD the company stated in their August 15, 2012 press release that they “now will have the capability to provide a fully-integrated surveillance system including data and voice communication systems targeted for installation in casinos, schools, hospitals, commercial buildings and government infrastructure facilities.”
ALCD may have confidence in their ability to tackle this new venture but investors remain skeptical as the company’s share price saw an initial bounce from 0.0900 to 0.1300 when news of the completed acquisition hit but since that time they have dipped as low as 0.0510 and are currently moving around the 0.0650 level.
It was just ten days ago that ALCD announced the completion of phase one on its transitional business plan by completing its name change and restructuring its capital stock base, an announcement that included Sylvain Desrosiers, Chief Executive Officer of Southern ITS International, commenting, “The company is now positioned to aggressively move forward with implementation of our exciting business plan.”
An aggressive move forward would be a change of pace for ALCD as the company has yet to display anything of the sort ion their previous endeavors as evidenced by their lack of revenue. Of course with the acquisition of Southern ITS Corporation ALCD consolidated the their figures for their recently completed quarter and showed revenues of $307,133 during the three and six month periods ended June 30, 2012 compared to revenues of $21,000 and $42,000 during the same periods ended June 30, 2011.
Clearly the driving force for revenue comes from Southern ITS Corporation and while it is now a wholly owned subsidiary of ALCD that may not do common shareholders much good. Back in March ALCD filed an amendment to its articles of incorporation, calling for a 1-for-300 reverse stock split of all the issued and outstanding shares of common stock. The following month they announced they had issued 100,000,000 shares of common stock to the sole equity owner of Southern ITS Corporation, resulting in it becoming a wholly owned subsidiary.
To say that a common shareholder has a shot at seeing any kind of profit from this would be optimistic to say the least. Just last month shares were trading as high as 0.2370 so it doesn’t take a lot to figure out what’s driving the share price down, somebody’s unloading a lot onto the market.
ALCD says they are “committed to the mission of providing total systems integration to casinos worldwide and other larger integration projects by maintaining cost effectiveness while providing the highest end of voice, data, surveillance, audio/visual and fire detection available” but they don’t appear to be committed to providing much in the way of shareholder value.
Additionally, the fact that they are eyeing casinos, schools, hospitals, commercial buildings and government infrastructure facilities as their primary targets for installation of fully-integrated surveillance system including data and voice communication systems should be a cause for concern given the financial difficulties currently being experienced by each of these targets.
