Verdisys, If Seeing is Believing.

Check This Out!

Shares Outstanding- 32.3 million
Market Capitalization-  $300 million
Revenues From Unrelated Customers- 0

BREAKING NEWS.CEO OF VDYS STEPS DOWN

In a press release put out after the close of business on Thursday December 11, 2003, we see that Dan Williams has stepped down and the company is looking for a new CEO. To this we have 2 words.

Sarbanes Oxley

http://www.sec.gov/rules/proposed/34-46300.htm

According to Sarbanes Oxley, the CEO must personally verify that the numbers put forth by the company in its filings are accurate and complete and the CEO can be held personally liable.  Considering the restatement of earnings and related party transactions of Verdisys, Stocklemon does not see this resignation as a surprise.

What is Verdisys?

The product behind Verdisys is a proprietary horizontal drilling technology that was developed by Carl Landers and sold to Verdisys.  This Landers Technology is supposed to change the way oil is drilled..blah blah blah.  So what does this technology look like?  Hold on to your hats and start singing,

“C’mon listen to my story bout a man named Jed”

THIS IS NO LIE!!!  THIS COMES RIGHT FROM THE CARL LANDERS WEBSITE.

http://www.geocities.com/ap_enhancments/contacts.html

History Of The “Landers Technology”

Before owned by Verdisys, Landers licensed his horizontal drilling technology to a company that he owned named Advanced Petroleum Enhancement (Hence, the above website).  Yet, this company went Bankrupt. Not only did the company go bankrupt, but Landers was left with Federal Tax Liens.

United States Bankruptcy Court: UNITED STATES BANKRUPTCY COURT, WESTERN
DISTRICT OF KENTUCKY - LOUISVILLE
Petitioner: ADVANCED PETROLEUM ENHANCEMENT
Case Name: In Re ADVANCED PETROLEUM ENHANCEMENT
Case Number: 0142237
Filing Date: 12/20/2001
Type: Chapter 11

JUDGMENT INFORMATION
Jurisdiction: COMMONWEALTH OF KENTUCKY - HOPKINS COUNTY COURT
Creditor(s): IRS
Debtor(s): ADVANCED PETROLEUM ENHANCEMENT
Amount: $33,895
Type: FEDERAL TAX LIEN
Filing Date: 09/04/2001

How can a technology that was worth nothing 2 years ago now be worth $300 million…with no customers except related parties?

Verdisys Clients Are Like Having Your Sister As Your Prom Date!

According to the most recent filing:

“To date the Company has signed contracts to drill 540 wells and had drilled and completed 35 wells as of September 30, 2003. Of the 540 wells under contract 318 wells are related to Edge’s contracts, 102 wells are related E2000’s contract and 120 wells are related to Natural Gas Systems, Inc., of which Mr. McAfee, a
Director, and other affiliates have a 28.6% beneficial ownership.”
 

All Related Parties….No Real Customers

Interestingly enough, the Energy 2000 related party transaction was not made public until the fine investigative work of www.our-street.com

Big Thanks to those guys.

Edge Capital Group

Ok, so now that we know that Energy 2000 is a related party and Natural Gas Systems is a related party, that would leave us with one unrelated customer..Edge Capital Group.

A phone call to Scott Sossen, the CEO of Edge Capital, gave us some interesting information.  Mr. Sossen had a defunct company that was incapable of generating any business in his old business model.  But, then he met Verdisys.  Verdisys had Sossen get out of his previous business and get into the oil business.  Mr. Sossen nor Edge Capital Group was EVER in the oil business until approached by Verdisys.

Verdisys got Edge into the oil business.  Stocklemon doubts the capability of Edge to ever pay any bill to Verdisys.

Restatement of Earnings..LOSS NO PROFIT

On December 3, 2003, Verdisys restated their earnings from the previous quarter that showed a loss not a profit.  It was also in this filing that the company finally decided to deem Energy 2000 as a related party.  Doubtful accounts and deferred revenue became obvious in the restatement as the company lost $802,560 for the quarter.so much for that profitable quarter.

Stocklemon believes the accounting is still to be desired due to the capability of Edge to pay any of their invoices to Verdisys.  It is the opinion of Stocklemon that Edge does not have the financial means to pay any of the obligations.

How To Lose $620k in 2 Weeks! Will Someone Please Explain?
WHY NO PRESS RELEASE ON THIS ONE?

According to the most recent filing,

“On November 10, 2003, Verdisys paid $500,000 for an option to place an additional $10,500,000 deposit to purchase a large natural gas field with significant current gas production for a purchase price in excess of $100 million. Verdisys also paid fees to date of $120,000 associated with the transaction. The additional $10,500,000 would have held the purchase option open until February 2004. As of November 26, 2003, the $500,000 was forfeited and the option expired.”

How To Lose $1 Million

In April 2003, Verdisys issued 2,000,000 shares of common stock for software. The shares were valued at $1,000,000. The software has been determined to not be useful and was fully impaired as of September 30, 2003.

John Liviakis

The investor relations arm behind Verdisys is John Liviakis.  John Liviakis has been in the investor relations business for many years.  Instead of commenting on Mr. Liviakis, let his track record speak for itself.  Below is a sampling of some of the stocks Mr. Liviakis has been involved with over the past 6 years and their current trading price. (at one point they were all much higher)

Our Favorite of those stocks is Biopulse (BIOP).  Mr. Liviakis was the largest shareholder (over 13%) and spokesperson for the company.  The company was selling fake cancer cures in Mexico until the Tijuana clinic got shut down by the FTC and the Health Department.  This was only 2 years ago for Mr. Liviakis.

http://www.ftc.gov/os/2002/07/biopulse2stip2.pdf
http://consumeraffairs.com/news02/biopulse.html

All of this was happening while Mr. Liviakis was bragging to a reporter that he makes $40,000 AN HOUR.
http://www.contextmag.com/setFrameRedirect.asp?src=/archives/200012/Feature3PerformingWithoutaNet.asp

Conclusion:

Stocklemon believes that Verdisys is worth nothing more than the truck sitting on cinderblocks next to the Landers Horizontal Drilling Machine.  Verdisys receives the award for the first HORIZONTAL LEMON.