AN OPEN LETTER TO DRGP MANAGEMENT AND SHAREHOLDERS
[I've sent a copy of this letter to CEO Rice and the guys at CEO Cast. We'll see if any response is forth coming. I'll share with this board any response I get.]
It is clear that since the last quarterly report, there has been a prevailing spirit of discouragement. Part of this is attributable to the broader market, while part is certainly based upon the poor bottom line results of the Second Quarter.
What has really changed since before? NOTHING. I think the biggest deal is that many of us thought we were further down the road than we were...that we were already transitioning from a developmental stage company to an operating and profitable one. In short I think we/I had overly optimistic expectations.
I think the biggest complaint we all have is the share price. While I don't know for sure, I don't think many of us would be complaining if we were presently trading at even 4 or 5 cents per share. If this is truth it ought to make us pause and think about our frustration and complaints. While growing revenues isn't everything, it is something. The company has managed to averaged about 250% growth in each quarterly report this year compared to last year.
What would it take for me to have restored confidence? I'm not entirely sure. Here's what I think would help.
1. Better Communication from Management.
a. Assurance that the company is not on the brink of going bankrupt. The stock is being priced by the market as though this is a possibility. It is clear that we are walking a financial tight rope by using cash flow to grow sales. Is there reason for concern here?
b. Disclosure of DRG's Strategic Plan. How can we tell if things are going according to plan if we don't know the plan? Are things going OK? Great? Poorly? We have a right to know.
c. Get the stinking website up and running. I could make one better than you have.
d. Although talking to the CEOcast guys is better than nothing, there should be some additional way for management to stay in touch with the investing public.
e. Perhaps when/if the website is upgraded, a shareholder question/answer or a shareholder update section could be added.
2. Fuller Disclosure of Insider/Management Ownership.
a. There is no good reason management and insiders cannot disclose their ownership of DRGP. The CEO should requre that these forms be filed...by not requiring it, I'm pretty sure there is some negligence of duty.
b. The SEC requires these disclosures
c. If Insiders and managment are not holding and/or buying shares why should the investing public.
d. CEO Rice should file her Form 4's in a timely manner. Is there a reason why she was buying consistently (as per previous Form 4 filings) and has stopped buying since then?
e. We have yet to see a Form 3 filed by anyone.
3. Convince us the DRGP Has a Future
Here's the real rub. Many of us current and long term shareholders are unwilling or unable to buy shares at the current market prices. Why not? Some feel like they've been scammed. With business as usual, the company has managed to disinfranchise, discourage, and depress the very base that could be used to the company's advantage.
In my opinion it is way easier to convince current shareholders to hold or add to a losing position than it is to convince new shareholders to build new ones.
We know the story...we have followed the company for the last year or two.....we're the ones that have encouraged our friends and acquaintances to invest in the company and it's future. For the most part we have looked like fools and idiots.
Running the company, growing revenues and keeping things going is good...even great. But we'd like...no we need more.
Randall K.
