Crybaby, I'm not sure you know exactly what you've got there but anyone doing their DD really needs to read between the lines with regard to those transactions. Forget the crossed boards for the time being and take a few minutes to study who, what, when and how much from September 30, 2013 to March 25, 2014 and also take a look at the market price at the specific points in time at which those transactions were executed. I think you'll find yourself scratching your head wondering what the heck was going on here.
It's difficult to unravel but one item clearly jumps out at me and I'm going to stick to just that one for now. The million dollar transaction between MRIB and the two principals for vacating company obligations to them. First problem I have is that the terms of the preferred shares are not disclosed. What were the obligations? Options? Salary? And not knowing the terms attached to that preferred stock and knowing Margrit valued it at almost a million dollars makes me think there was an absolute boatload of stock, options and warrants attached at well below market price. Second thing I don't like about this transaction was breaking it up between quarters and the lion's share going against the fourth quarter of the MRIB fiscal year while the relatively tiny portion of 13X less was booked on the first quarter of the new current fiscal year effectively allowing them to file a quarterly (which I don't believe they ever did) without disclosing the large portion and hiding dilution. This confuses me and maybe someone can explain it to me, but I don't understand why MRIB bothered to cite the distribution to Margrit from the MRIBS Q4 from the previous fiscal year on the June 2014 statement for results for the new fiscal year Q2. Was it to cover their ass for a little too creative bookkeeping? We're they trying to bury it and then realized it wasn't kosher and had to make public record of it? Was it reliant on Rule 504 and subject to the million dollar cap and they wanted to reserve the exemption? (which they did use later on in March and I'll get to that one later) I don't know the regulations, reporting and accounting well enough to opine yet but maybe someone else can. Something there is just not right.
I'll address the other transactions later on Crybaby because there's an even more intriguing story there if you connect some dots, but right now I have to get ready to watch some football. Hopefully Andrew Luck can cheer up some of us Stanford folks who got disappointed yesterday! Go Colts!
