By Tom Winnifrith, The Sheriff of AIM | Saturday 6 February 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
We have already demonstrated that not only is Servision (SEV) teetering on the brink of insolvency (HERE), has a ludicrously aggressive revenue recognition policy (HERE) but that also it announces deals as pre-placing ramps then patently does not deliver on them HERE & HERE. Now lets look at a pre-placing ramp from Brazil from April 2015. This is a shocker.
On 7 April 2015 Servision announced a deal in Brazil - a territory which comes in its Rest of the World geographical segement. Servision stated:
SerVision (AIM: SEV), the AIM quoted developer and manufacturer of digital video security systems, is pleased to announce that SerVision Limited, the Company's wholly owned subsidiary, has entered into a new partnership agreement with Sectrans Industry Trading Pty Ltd ("Sectrans") for the supply of SerVision's video gateway products across a range of vehicles in Brazil.
Under the terms of the Agreement, Sectrans will have exclusivity over the distribution of the Company's video gateway products in Brazil until December 2016. The Agreement is for the supply to Sectrans of MVG200 units and MVG400 units. The Company will also be supplying the SVControlCenter, SerVision's enterprise-level video monitoring software platform, as well as the SVProxy server solution, a proprietary server designed to overcome a range of cellular network related challenges.
Salineira, a large Rio de Janeiro-based bus operator and end customer of Sectrans, has committed to an initial purchase order for the supply of 400 MVG400 units with an aggregate value of US$500,000 for which US$250,000 in cash has been paid to SerVision with the balance of the initial purchase order expected to be paid to SerVision when the units are delivered to Sectrans shortly.
Under the terms of the Agreement Sectrans has undertaken to use their best efforts to sell a total of 2,000 units before 31 December 2015 and a further 4,000 units before 31 December 2016.
Under the terms of the Agreement, Sectrans has also undertaken to use best endeavours to charge their end-customers a monthly maintenance fee for each MVG200 and MVG400 once sold. Sectrans has committed to pay SerVision a 15% sales commission on the net revenues generated from all monthly maintenance fees for projects requiring the MVG200 and a 20% sales commission on the net revenues generated from all monthly maintenance fees for projects requiring the MVG400.
What brilliant news. And so...
On 22 May 2015 it raised £911, 127 at 5.2p which was enough for it to get its accounts signed off as a going concern so that in June it could belatedly publish its calendar 2014 (piss poor) numbers.
But on 30 September we got the interims showing ROW (including Brazil) revenues for the six months to June 30th 2015 of.....$70,000. WTF? Before its placing Servision said that it had already booked $250,000 with the cash received with another $250,000 delivered shortly.
So did the $250,000 arrive before April 7 2015 in which case the interims contained a lie or was it that the interims are correct and the RNS of April 7 was a lie.
Either way this is further evidence that this company just cannot be believed on a word this it says, that Nomad Allenby should quit at once and that, at 2.75p the shares are uninvestable, a storming sell with a far value of 0p.
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