KGIC Inc LGLTF

$50M+ Investor Money Vaporized within 24 Months

[Muddywater2013]

I hate to say it: "I told you so". Look back at my posts since 2014. Education sectors in Canada and Korea both knew about LOY's reckless behaviour. Let's look at facts instead of speculating on fictions: 1) No responsible CEO would lead his company to $231,848 cash in bank (per LOY's Q-3 report) when running a $50M revenue company. With $231K in the bank, it is not enough to cover rent for 1 week. Yet, he borrowed money to buy more non-education business in Korea. What's up with that when employees and suppliers in Canada are not getting paid on time? 2) LOY's 9 month retained earning was $7.1M Net Income from Operations. Where did the cash go? If LOY is kiting the profit from quarter to quarter, this is a very big time bomb which will trigger a Class Action Lawsuit. A mini Enron fiasco. 3) In order to hide the inflated Net Income, bogus companies quite often bury the losses in "Cost Relating to Acquisition" to write off (or to reverse the fake profit) by Q4. Truth will come out on April 30th 2015 when the F2014 audited yearend comes out. Huge write off this year will be consistent to prior year practice. 4) Prior Year MO was: -Record Earning announcements Q to Q -One Acquisitions per 8 - 10 weeks to hide losses and hype the stock -Raise or borrow money every 90 days -Big Write off by audited yearend -Pump investor monies to Asia where acquisitions can not be audited -Use un-collectible Accounts Receivable to pay for acquisition in order to hide losses (see page 7, item 3c of LOY's Q3 report. $2.465M of Accounts Receivable was used to pay for the Acquisition of SEC with seller's registered owner located in Korea. What kind of legitimate Seller would accept someone's un-collected AR as currency to sell his business? This could be an innovative way to hide $2.465M of losses by converting bad debt into acquisition currency and avoided losses. If truth, this is fraud. 5) The LOY story was told as a Canadian ESL school story a year ago. After $50 million of Canadian investors money vaporized, this story is now converted to a Korean story with money going overseas at inflated asset purchase price. Also interesting to note, majority of LOY acquisitions were transacted with Korean sellers. Family ties or arms length transactions? What's Next? My guesses are: a) More acquisitions in Korea b) No money, no problem. Borrow it or raise it through Coremark c) issue more stocks d) Record losses for Q4 F2014 period (scheduled release is Apr 30 2015) e) Immediately follow by Record Earning for Q1 2015 to erase the bad memory, then repeat the cycle for 2015 f) Reason of huge losses in Q4 2014: Acquisition Related Expenses, same as last year g) buy more Korean businesses and pay them by un-collected AR h) Pump more investor money to Korea so that the transaction is away from the prying eyes of Canadian auditors I) LOY needs money to survive, and $7M below $0.40 with a warrant will mean 35 million shares of new issuance. j) if successful, this company will reach 200M shares fully diluted including the Convertible Debt which was issued less than 6 months ago. Company should receive an award for its ability to vaporize money so efficiently.