Validian Corp (OTCMKTS:VLDI) With An Impressive Run In The Right Direction
If you work with computers a lot (and we suspect you probably do) you are most likely aware of how quickly the IT industry is developing. “Things really are evolving at a lightning pace.”, you’re probably thinking as you recall the processing power of the computers you used a couple of years ago. Well, Validian Corp (OTCMKTS:VLDI) have taken on a more leisurely approach.
After a couple of name changes throughout the years, they decided that they’ll be known as Validian Corp in 2003 and since then they’ve been working on a software program that will ensure a speedy and secure exchange of information between applications and computers in and outside your office.
Mozzilla started with their Firefox project a couple of months before VLDI, in September 2002, and since then they have been able to spew out 21 versions of the browser. By contrast, VLDI still don’t seem to be ready with a marketable product.
In the interest of fairness, we should point out that the software that VLDI are developing is probably quite a lot more sophisticated than the Firefox browser, but in any case, you would agree that 10 years is quite a lot of time for the completion of a single product. That said, the complexity of the program is probably not the only thing that stopped VLDI from being ready.
We had a look at their latest report and we can see that they are in a pretty sorry financial state. Here are the most important figures:
- cash: $13 thousand
- current assets: $18 thousand
- current liabilities: $11 million
- quarterly net loss: $383 thousand
- accumulated deficit: $39 million
On the plus side, we should point out that according to the 10-Q, they managed to complete the development of the program during Q4 of 2012, and they issued a press release yesterday according to which there will be some radio coverage in the coming months that will bring in some much needed awareness, but the fact remains that you’re still not able to buy their application from the corporate website.
Nevertheless, the press release, along with a mention from Quality Stocks on June 5 did push the price North and after a couple of green sessions, the value has doubled. Will this be a long-term run, however?
Well, once they finally put the program on sale, they could see some growth, however, their colossal liabilities might adversely affect the gains. We read in the 10-Q that there are numerous convertible notes that are in default which means that the interests are mounting as we speak. Some additional notes are due very soon and in the meantime they are borrowing yet more money in order to fund their day-to-day operations.
On the whole, things are looking grim right now and unless the applications is marketed properly and turns out to be extremely profitable, VLDI could be in big trouble very soon. One thing that does worry us even more is the fact that the publicity around the stock is abnormally high right now. Between March 2012 and March 2013 they issued a total of 42 million shares either as compensation for services, or as a conversion of debt. In case someone decides to sell even a portion of those shares on the open market while the price is relatively high, regular traders could be in for some painful losses. That is why, you should be extremely careful when considering the risks of a potential VLDI investment.
