The answer is no, isn’t it? These men never saw any buy-out or “alliance” money like that.
I have been studying the IA Global 10-K filings. As I mentioned yesterday, IA Global is a company that is still in business. Its stock went from the high teens in U.S. dollars during late 2007, to 25 cents a share nowadays.
I have previously linked to some of the contracts between IA Global and Terrie Lloyd’s Linc Media. Also, to those of IA Global and GPlus. These are all online, for their first few pages. You have to join a service to get the full contract. I don’t feel it’s worth the price ($199), but if you are a regular journalist reading me, it might be.
I have previously written that the buyout of IA Global’s 25% stake in the Gaijin Pot owner, GPlus Media, was for $75,000. I wondered whether GPlus had ever seen the $1,280,000 as cash for the stock portion of that transaction. Looking at the 10K’s for both 2009 and 2010, I’d have to say the answer was no. This was entirely a book transaction, where privately-held stock that was said to be worth 3,000,000 shares of a publicly traded company were exchanged. (By the way, if you do not know, “10K” is generally referred to as a company’s annual report; but it is a specific filing required by the American Securities and Exchange Commission for companies whose stock trades publicly. Sorry to be slinging the lingo.)
What is tricky about the IA Global dealings with both Terrie Lloyd, and Erik Gain and Peter Wilson, is that there are related and subsequent side contracts, and amendments, that change what looks like a vanilla deal.
As you know, I am someone who wants all the deals on one paper. It may not be one page, but the idea is: the deal is the deal. Any modification is to that deal, and shows.
I realize that this is not how everybody plays it in the contemporary business world. But then again, I think this is why the contemporary business world has the problems that it does.
Terrie Lloyd’s transaction is particularly disconcerting, because it was unwound shortly after the deal was done. This apparently was not breach, but rather, a clause in the original deal that it could be undone based on business conditions.
Here is the screenshot of the IA Global 10K, from July 14, 2010:
As IA Global tells the investing community last summer:
On March 12, 2008, the Company and LINC Media terminated the definitive agreements due to the U.S. market conditions. LINC Media retains the $110,000 paid to date, less $10,000 deducted for legal fees. There are no additional fees or cash payments or stock issuances required by the Company or LINC Media. The $110,000 paid to date has been written off as of December 31, 2007 and is accounted for as a loss from disposal of a discontinued operation.
Read more at: this site.
In the 2009 10K report, the $110,000 figure is mentioned, without connecting it to the LINC Media deal.
The evidence suggests that there was a similar arrangement with GPlus, which was unwound in March 2009.
So what look to be big losses for IA Global, may in fact have been transactions based on a lot of puffery on both sides. Isn’t this so typical with internet-based businesses? Companies that allegedly were worth seven figures, really had trouble being priced in the six figures. If that.
When you think this through, why is that?
Part of it is the desire of people to believe that this relatively new internet technology is also something that creates vast prosperity. What it does, in fact, is create and destroy. What we see is that it makes sharing information, text or visual data, much more economical. What it also does is create a lot of avenues to move this data around. It creates a sea of useless data, too. It opens up avenues to exploit other people’s information; and also manipulate their expectations and play on their gullibility.
What the analog world of “transmitting data by paper” did was block out all the nonsense that has begun to flow through the internet. If the communication didn’t have a legitimate purpose, the person doing any kind of sending out to the community was spending a lot of money for nothing. So with news or advertising, your product had to be solid. If someone didn’t want it, or wasn’t going to read it, you were just wasting your money and time.
Digital media creates a vast effluent. It doesn’t cost big money, and the value attached to it is whatever you can convince someone it’s worth as its own digital product.
So the web businesses that make it–and here, I’m talking about pure web business, not “clicks and bricks”–are those that you can persuade other people are valuable.
Sure, an internet-based business can be authentic. But it’s easier to put in an element of a con in it as well. Remember, “con” comes from the phrase “confidence artist”. The confidence artist is a cheater who is looking to gain someone’s confidence in order to cheat them.
Within the Japan-side expat community, the conning is over several levels. It’s intertwined. You hear that an online site is read by everybody, so you, yourself, visit it. If 10 or 20 people leave some comments or give it some sign of life, this enhances your belief that the site really is credible. It needs some credibility—otherwise you just laugh or groan, and go on to the next thing.
I think what we’re winding up (I use ‘we’ as a now-stateside expat), is about a 10-year stint, where a handful of people in Tokyo and a few other locations in Japan have been able to convince people that their businesses were really much, much more than they actually were.
They really didn’t have anything. It was the image that they had something.
I don’t mean to insinuate that the big names of the Tokyo internet business community were pure con artists. Sure, I think some are. And I think they con each other. (For example, saying that a business sold for $22 million to a guy who knows that he couldn’t get his sold for a million-two without it being hoisted back to him four months later.) What I am saying is that element of deception seems to be more important than the actual work of business itself. GPlus is a legitimate business–it’s doing something. I am sure that Terrie Lloyd’s activities do something. It’s not “give us money, and we do nothing.” It’s that what they make themselves out to be is more than what they really are.
And because it’s a select group doing it for each other, I think just makes it all worse.
Next, we are going to focus again on Ascendant Business Solutions, which I had blogged about last year. Something happened with them last month, which is worth a look.
[Update: IA Global recently changed its name to Asura Development Group. The SEC requires, though, that all the old information about IA Global be connected to the new name, which is why the links should still work.]
[Update 1/5/14: As an aside to my post from three years ago, it looks like Terrie Lloyd is being accused by Mark & Mary Devlin of not paying according to the terms of their sale of Metropolis, K.K., to Lloyd in 2007. There are a number of twists to the story, but the gist is that the Devlins turned over a cash positive business to Lloyd on an unsecured, installment sale (that is, on credit without collateral.) They say Lloyd still owes, and that assets have been encumbered and shifted overseas, to get out of paying. The unfortunate part of their claim is that the website entries where they put their side of the story out throughout 2013 tended to disappear, only to reappear some time later. Since only one side is talking, it’s hard to know what the bottom line is. But in the context of deals being done in the Japan-side expat community using fluff for payment, it fits the pattern.]