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5700 looks about right so far....11K is average, lately. This puppy really rocks when it manages to trade 20-30K. This has to be the least covered and most thinly traded billion dollar company in the country.
Troy
Troy
<<I spent the last hour trying to figure out a really annoying air leak in the pool's pump/filter. Spent all this time (and some time last night) cutting, re-routing, and replacing hoses and fittings all over the place. Finally found it. It's the rubber gasket on the pump cover. Found it by running a garden hose over everything until it quit sucking air. Figures it'd be the thing that's easiest to replace (once I find it online somewhere).>>
Been there, done that -- two weeks ago. Only difference is that I just called the home warranty folks and had them send someone out. I figured that there just had to be a serious problem with the pump since no water was being pumped out of the particular waterfall it went to. I was finally going to get some value out of the pool add-on to the home warranty. A few years ago I figured that with six pumps for various things and 60,000 gallons, the warranty would almost certainly pay for itself: of course, that was just wishful thinking on my part. Imagine my feelings of stupidity when the guy looked at it, saw the cracked cover and broken gasket and had it diagnosed and fixed in under 60 seconds. He must have sensed it too since he just charged me a $45 co-pay instead of the normal $55.
Sometimes the most obvious things are the hardest to see.
Now it is time to take some pleasure time this afternoon and walk the six blocks from my office to the Astros game. Now if they will just win!
Troy
Troy
<<The problem is, there is nothing to discuss that is stock related.>>
The semis may already be in the early stages of an upswing. Look at the great news from SILI.
Troy
Troy
<<There a problemo somewhere?
No, or at least not one that hasn't (I think) previously been addressed. I was primarily curious so I could ask an intelligent question of someone else, privately. Thanks.
Troy
Troy
What are the officially "valid" reasons for deleting a post? I seem to recall reading that there are only three valid reasons, but other than "personal attack," which I think is one of them, I have no idea what the other two are (if there are only three). TIA.
Troy
Troy
I asked once before and got no response, so I'll ask again since I am still curious:
Do you have permission from NVEI to use its copywrited (and presumably trademarked) "Cu@ocx" as a handle?
One new question: do you work for NVEI?
Troy
Troy
<<I think the incarceration of Ola was warranted.>>
I think Matt's point on this whole debate was that he did not incarcerate Ola, only ask him to cool it. I keep looking for cuffs on Ola and do not see any.
In any event, as I recall, Ola (like the rest of us) agreed to let Matt censor and jail when he joined. As with most things in life, if one does not like the rules of the game, one can: (1) ignore them and suffer the consequences; (2) work to change them; or (3) decide not to continue to play the game.
Troy
Troy
<<Rule #1-1. Only those WAG's posted before 7:50am will be considered for a given trading day. This will allow all editing time to expire prior to pre-market open. IH time as logged is the reference, which is EST, currently.>>
Thanks for the info. I guess I could have just read the thread header. I just need to remember to pick the night before. I am seldom awake enough at 6:50 a.m. local time to make it in the mornings. Even when I do manage to stir that early, it is because I MUST be somewhere else.
I liked the prior 8:10 CST -- but, it is not my show, so I'll play by the chosen rules (as if I really have any other choice). <g>
Troy
~~~~~~~~~COMPX 3/28/02~~~~~~~~~~~
Previous Close (1826)
1835 WTMHouston
1842 timhyma
1858 Albert
Of course, now that my pick is timely, the no win string will likely continue.
Troy
<<My late, untimely WAG is 1825. Muell (1795) and I will have our own late, unofficial WAGs. <g>
It figures I would nail it when it did not count.
Is it 0800 Eastern?
Troy
Glad I looked at more than the last post......
My late, untimely WAG is 1825. Muell (1795) and I will have our own late, unofficial WAGs. <g
Is it 0800 eastern?
Troy
Screen Capture
I got very tired and frustrated on occasion of not being able to take a screen shot. When you need it, you need it and nothing else seems to work.
Finally found a Parson's Technology Product that works great. It is called Screenshot and will do everything you need or want when it comes to capturing the screen. It is $20, but it beats the heck out of being frustrated.
http://www.parsonstech.com
http://www.broderbund.com/Product.asp?OID=4145760&SC=1105642&CID=99
Troy
~~~~~~~~~COMPX 3/21/02~~~~~~~~~~~
Previous Close (1833)
1800 Joemoney
1840 WTMHouston
1850 Phil (The) bullrider
Hoping to keep my streak alive....
Troy
11 deleted messages today???? Or is an IH gremlin messing with things.
Troy
Troy
<<and, a 100 point spread !!!???!!!>>
Just about right for the -48 point day. If it could have gone either direction by as much as it went down, the spread of 100 is about double the -48 for the day.
Our group picks were a pretty good measure of volatility, even if not direction.
Congrats to alexed -- the bearishist (if there is such a word) of them all. Bearish enough to win, but not bearish enough to really be close.
Troy
<<, being smooched up by prostitutes, with parrots climbing all over his person, lying on the ground getting a henna "Tattoo, standing in front of a Neon Marijuana Plant outside a "hemp" products store, etc.>>
I do not think that I would consider this "seamier" experience as funny or cute no matter whose kid it was. Adults can make such choices, "young boys" should not have those choices made for them.
Guess you had to be there, but do not think I would have wanted to be.
Troy
<<Kids are fun (your kids).>>
One of life's funny little (and frequently inverse) truisms is that it is always funnier (and sometimes only funny) when "it" is someone else's kid.
This is similar to the grandparents' motto of "they are only borrowed for the fun parts."
Troy
Troy
~~~~~~~~~COMPX 3/20/02~~~~~~~~~~~
Previous Close (1880)
1868 poet (the only bear)
1874 WTMHouston
1885 timhyma
1889 Sara
1905 ez2
1917 Matt
1930 Muell
Just trying to keep my losing streak alive.....
Troy
<<You got your bid in right at the wire Muell.>>
And a good bid it was.......
Troy
<<I show no mercy when taunting others.>>
It sure seems to me like there are more accurate words than "mercy" to use in that sentence.
I smell a contest brewing -- fill in the blank for what Joe shows "when taunting others."
"I show no __________ when taunting others."
Let the games begin -- all in the spirit of helping "your" writing ability Joe.
Troy
Here is my take on some aspects of it.
http://www.investorshub.com/boards/read_msg.asp?message_id=307067
Troy
Troy
~~~~~~~~~COMPX 3/19/02~~~~~~~~~~~
Previous Close (1877)
1818 ez2
1841 Horsetrader1
1845 Joemoney
1852 timhyma
1869 Sara
1888 Phil(Bullrider)
1895 WTMHouston
1917 Matt
Troy
<<who do I bash?>>
Based on what I have been reading, the better question is who don't you bash. Even if you have a point sometimes, it gets lost in the delivery, or rather, lack thereof.
http://www.investorshub.com/boards/read_msg.asp?message_id=307069
Troy
Edit:
<<was that a weak assumption>>
NO -- if I make an assumption I will generally say so. You should assume that my lack of saying so means that I am assuming nothing. In any event, it was an impression, not an assumption (kind of like the difference between your and you're -- two different words that have two different meanings) and it was far from weak.
<<You never miss the opportunity to bash someone. You're like some big mouth old woman getting in everyone's business. You need to shut up, sit down, and stay away from the people who don't like you.>>
Time for that look in a mirror again.....
Edit:
<<You are just a disruption to the entire site and a WASTE of bandwidth.>>
<<Did your intelligence run out early? * * * I think you are the most worthless, piece of shit member this site has even seen.>>
You ought to reread or rewrite your essay. Wasn't it you who said "you have to mean it."
Troy
A few noteworthy snips from the 10Q:
Convertibles total:
"As of January 31, 2002, the outstanding amount for the above notes was $927,500."
The following two statements appear to be contradictory and inconsistent. It appears that the first statement's reference to January 21, 2001, is a typo and that it should be 2002, but the amounts funded through 1-31-02 are inconsistent. I would not be surprised to see an amended 10Q fix these apparent inconsistencies.
On page 21, in Management Discussion:
"As of January 31, 2001, the Company had funded approximately $2,127,000 of the production costs towards this project, which included the purchase of camera equipment in the amount of $266,004."
On page 17, Note 9 to the Financial Statements:
"As of January 31, 2002, the Company has funded approximately $1,857,000 of production and other costs, which was included in projects under development in the accompanying consolidated balance sheet."
New stock after 1-31-02:
Substantial issuances after January 31, 2002 through March 14, 2002:
Options granted outside the plan 500,000
==========
Warrants granted in connection with
consulting agreement 300,000
==========
Options granted in connection with
2000 stock incentive plan 1,302,500
==========
Sale of common stock for cash 3,674,000
==========
Common stock issued to employees 485,000
==========
Additional shares issued under
settlement agreement 1,261,946
==========
Total 7,523,446
There also appear to be warrants for approximately 3,628,000 additional shares of stock that were not included in the 1-31-02 share data because they were allegedly anti-dilutive at that time. With the share price around $1.00, these warrants are no longer anti-dilutive and would now be dilutive. They include, from Note 8:
November 17, 2000 2,428,000 Lesser of 6.00 November 17, 2003
or 50% of market
($0.20 at 01/31/02)
October 31, 2001 1,000,000 .25 October 31, 2006
November 5, 2001 200,000 .51 November 5, 2005
Total 3,628,000
This 3,628,000 plus the 7,523,446 issued since 1-31-02 means an additional 11,151,446 shares to be counted among the "WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING" Thus, if "WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING" at 1-31-02 is 32,479,898 and there are at least an additional 11,151,446 to be counted in the current Q, then there are, at least, 43,631,344 shares outstanding.
The significant dilution is the bad news. The good news appears to be that they are still raising money, albeit at what appear to be greater discounts to market and thus at a proportionally larger dilutive level. Although cash had dropped at the end of 1-31-02, it looks like they raised some decent cash in February and early March.
Of course, if the share price remains around $1.00, future money raised will be less relatively dilutive and the number of shares required will also be a progressively smaller percentage of currently outstanding shares. That is, 1,000,000 shares is a greater percentage of 30,000,000 shares than it is of 44,000,000 shares.
Troy
Troy
<<He's already asking me to help him build a half-pipe. We'll have to wait and see about that one.>>
I got that one a long time ago. That one was not just a delay, it was a "not a chance in Hades." Some things should not be parent sponsored in the street in front of the house.
Tomorrow, we will be shooting the bow-and-arrow -- hopefully, a bit more prudently than when I was a kid and we leaned the target up next to the neighbor's A/C compressor. Yes, the arrow went through the (cardboard box side) target and into the A/C line. That was my first lesson in homeowner's insurance. We will place the target somewhere else tomorrow. <g>
Troy
PS -- I have been reading the thread for some time.
Troy
<<he had constructed a 16" tall ramp for his skateboard. Needless to say, that project got dismantled.>>
My son has been on me for months to build him such a ramp. One of the reasons (there were several) I kept putting it off was because of his mother's concern that it would be too dangerous -- some battles are just not worth fighting. Well, one of the neighbors just built an 18" ramp. I discovered this as I looked out the front window this morning and saw my son moving towards it on his skateboard. As he got to it, friction was obviously slowing him down. As he got to the top, he went off the other side and onto the pavement -- no big deal. Sometime he went over smoothly, sometimes not, but he was never moving quickly enough for it to have been a big deal even if he fell. Of course, the helmet provides an extra measure of protection. I could not resist the temptation to call his mother to the window. She gasped the first couple of times (as I chuckled), but then got over it.
All-in-all, riding a bicycle is much more dangerous -- it is faster and higher. I now wish I had built him the ramp months ago. As for his mother's fear, some battles are still not worth fighting.
Troy
Troy
This is probably an obviously simple question, but I cannot seem to see the answer.
I have several PMs in my inbox and would like to archive them. However, the only option that appears on the far right is "remove." How do I get PMs out of my inbox and into my archives:inbox?
Troy
PS -- obviously, I am also happy that the servers did not go down from 2:00 p.m. to 6:00 p.m., although I was woried that it would happen just as I hit "post message."
<<But unless you proof that you are a NVEI shareholder you shouldn't get any credibility here.>>
Let me see if I understand you correctly -- if I can prove to you that I own NVEI stock, then I am credible and otherwise I am not? Aside from the fact that credibility has nothing, factually or logically, to do with whether one owns a stock or not, I frankly do not care whether anyone thinks I am credible or not. We are not here to discuss me or my (or anyone else's for that matter) credibility; we are here to discuss NVEI.
<<Your (IMHO) perverted indeepment [sic] of discussions about NV's movie project only has one target:to make te [sic] investors here feel insecure.>>
At least you identified this as your opinion and not as a fact. As a claimed fact it would be false. Frankly, even as an opinion it means little since it has no factual basis.
One question for you: Do you have permission from NVEI to use its copywrited (and presumably trademarked) "Cu@ocx" as a handle?
If I were responsible for protecting a trademark, I would sure not want those over whom I have no control using it publicly for their own purposes.
Troy
<<WTM has come here and picked apart the filings. And admits he has been wrong about his numbers.>>
Now why would you say that if you were really interested in an honest, open, frank discussion of this company? Is that what this board is or is it just rah-rah for NVEI with everything and everyone else unwelcome?
Contrary to your statement and implication, what I admitted was that I was wrong about my recollection of a total number from NVEI's 10K. It is inaccurate for you to recharacterize my honest admission of a fallible memory (and one that I said might be incorrectly remembered when I first posted it) as admitting that I have "been wrong about his numbers."
In response to your question regarding why I am posting here:
I am a member of IHUB and have decided that I would like to look closer at and discuss this company and its stock. Is any more necessary? Unlike many people, apparently, my looks are typically very thorough. Unlike many people, apparently, I am willing to question apparent inconsistencies. I am not (nor should anyone else be) willing to accept anyone's claims (including posters and management) at face value. No one who is interested in protecting their hard earned money should either. If NVEI is as solid (or speculatively solid) as some believe, then people should be neither offended nor threatened by someone who wants to look at a company other than through rose-colored long glasses.
At present, I have no position in NVEI nor have I ever had any position in NVEI (sounds like I am denying being a communist). Aside from what I have read on this thread (and the other one) I know no one who has any position in NVEI and I do not personally know anyone on either thread. I am considering (but have not yet decided on) an investment in relation to NVEI. But, long-term long is not the only way to invest -- especially over the last two years.
If I decide to invest in or in relation to NVEI, I will disclose it. Until then, I will discuss it. Isn't that what this board is for?
Troy
PS -- the only times I have responded to anything in less than an objective way is when such comments have been addressed to or about me first. I would much rather discuss NVEI and not the people who post.
<<hopefully the following quote from today's shareholder letter from NVEI will put an end to this movie debate.>>
It does not. They can say that all they want but unless the JV contract has been amended, that is not what the contract provides. The contract provides that NVEI's $2.25 million is second in line, not first.
Troy
The 8K
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
On Thursday, March 14, 2002, Ray Willenberg, Jr., the President and Chief Executive Officer of New Visual Corporation (the "Company") issued a letter to the Company's shareholders on the Company's website (www.newvisual.com). The letter addresses several of the Company's recent developments and prospects.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following documents are provided as Exhibits to this Form 8-K:
(c) EXHIBITS.
EXHIBIT NO. DOCUMENT DESCRIPTION
---------- --------------------
99.1 Letter to Shareholders, dated March 14, 2002.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NEW VISUAL CORPORATION
March 14, 2001
By: /s/ Ray Willenberg, Jr.
-------------------------------------
Ray Willenberg, Jr.,
President and Chief Executive Officer
-----------------------------------------------------
EXHIBIT 99.1
NEW VISUAL CORPORATION
[LOGO HERE]
THURSDAY, MARCH 14TH, 2002
Dear Valued Shareholder:
First, I'd like to thank you for your ongoing support and demonstrated belief in New Visual Corporation. I'm pleased to report that the progress we are making at NV Technology in the development of our high-speed, broadband delivery solution is on track and gaining momentum. In fact, it is our hope that we will be prepared to launch much-anticipated carrier trials as early as this summer.
In preparation of this milestone event, considerable attention is now being placed on refining our business development and marketing strategies to ensure that New Visual is properly positioned to maximize the market entrance of our technology into the telecommunications industry.
REUTERS recently reported that high-speed Internet usage in the United States accounted for more than half of all time spent online in January, outpacing dial-up Internet access for the first time. We believe this is a clear indication that the market demand for quick access to online voice, video and data is creating an environment rich with opportunity for New Visual and its proposed solutions.
In this regard, we are delighted to have recently announced the addition of Mr. Thomas Cooper to our Board of Directors and as a consultant to our management team. Tom is currently working closely with us to assess a variety of unique market opportunities for the technology and utilize his proven experience in exploiting them. Tom's ability to translate his vast knowledge of access networks and high-speed technologies into next generation revenue opportunities will provide the kind of insight and leadership New Visual needs to be successful.
As former Senior Vice President of Corporate Development at GlobespanVirata Corporation, Cooper played a visionary role in the development of Virata's business model and its rapid growth from a relative start-up company to becoming the world's leading DSL chipset provider. He joins his former colleague, Dr. David Greaves, a Virata co-founder and current advisor to New Visual, in our goal to duplicate the success they enjoyed at Virata.
We have also gained industry confidence with the recent addition of Dr. Walter Chen as an Advisory Director and a technology development consultant to the Company. Dr. Chen is widely viewed as a global authority on broadband communication systems with particular emphasis on high-speed copper digital transmission systems, as well as a recognized expert in DSL systems. Dr. Chen will be assisting Dr. Michael Propp, who leads our technology development team, to advance the completion of the field prototype that will be used in the initial carrier trails scheduled for late this summer. New Visual has assembled what is arguably one of the most accomplished and credible teams in the industry, composed of highly regarded professionals across many complementary business, technology and academic disciplines.
--------------------------------------------------------
Additionally, our legacy entertainment business is beginning to make some noise in the action sports and feature film industries and is well on its way to achieving its full potential. New Visual's wholly owned subsidiary, NV Entertainment, achieved a major milestone with the completion of the shooting of "STEP INTO LIQUID" (working title), a full-length feature surfing movie produced on budget in association with Dana and Bruce Brown and J.P Beeghly. Planned for domestic and international release this summer, STEP INTO LIQUID has been the subject of great anticipation by the global surfing community, estimated to exceed 17 million professional and amateur surfers. Considering the exceptional success that Dana and Bruce Brown realized from THE ENDLESS SUMMER AND THE ENDLESS SUMMER II - films they produced that collectively generated over $120 million in gross revenue to date, we are hopeful that STEP INTO LIQUID will follow suit and enjoy notable success.
In accordance with the terms of our joint venture agreement with Top Secret Productions, New Visual provided $2.25 million in production financing for the film. Upon release, we will be entitled to receive the first $2.25 million in revenues to recover this investment and then collect 50% of the net revenue thereafter.
Additionally, to assist us in communicating exciting and material developments at New Visual to the industry, to Wall Street and to our shareholders, we have engaged Elite Financial Communications Group, LLC. As a full service strategic resourcing, investor relations and financial communications company, Elite will begin a strategic campaign on our behalf later this month to increase exposure and awareness of our unique story.
These are just a few of the momentous strides we are making at New Visual. Over the course of the next several months, I look forward to providing you with ongoing details relative to the development of our technology, our corporate progression, alliances that will accelerate our business plan, our upcoming Annual Shareholders Meeting and other meaningful events you may have interest in.
Thank you again for believing in New Visual.
Sincerely,
/s/ Ray Willenberg, Jr.
Ray Willenberg, Jr.
Chairman and Chief Executive Officer
WITH THE EXCEPTION OF HISTORICAL INFORMATION CONTAINED IN THIS LETTER, THIS LETTER INCLUDES FORWARDLOOKING STATEMENTS MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS, INCLUDING BUT NOT LIMITED TO THE FOLLOWING: PRODUCT DEVELOPMENT DIFFICULTIES; AVAILABILITY OF FUTURE FINANCING; MARKET DEMAND AND ACCEPTANCE OF PRODUCTS; THE IMPACT OF CHANGING ECONOMIC CONDITIONS; BUSINESS CONDITIONS IN THE INTERNET AND TELECOMMUNICATIONS INDUSTRIES; RELIANCE ON THIRD PARTIES, INCLUDING POTENTIAL SUPPLIERS, LICENSORS AND LICENSEES; THE IMPACT OF COMPETITORS AND THEIR PRODUCTS; RISKS CONCERNING FUTURE TECHNOLOGY; RISKS RELATING TO THE FILM RELEASE OF "STEP INTO LIQUID," INCLUDING COMPLETION OF THE FILM AND MATTERS RELATING TO ITS DISTRIBUTION, AND OTHER FACTORS DETAILED IN THIS LETTER AND IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION FILINGS.
<<The movie began production long before NVEI entered the broadband business.>>
This is inaccurate, but is addressed in another post.
<<[Me] This movie deal smells very similar to the guy who in a desperate effort to keep his personal financial situation from going bust, begs and borrows whatever he can to come up with $$ for the deal that cannot miss. It is desperation at its best and worst.
[You] I have to disagree with you there. The movie is fully funded, and has a potential to produce some revenue when it might be needed most. Again, your lack of understanding of the timeline is clouding your judgement.>>
We will simply have to agree to disagree about this. But, it is a matter of perception and opinion, not fact, so it is not provable by either of us.
<<If the technology is truly commercializable, it could be worth hundreds of millions annually.>>
That is likely true, but the better question is whether they can make it to the point of commercialization. As I recall, it took a long time (more than five years) for DSL to move from concept to reality. Can NVEI hold out that long or even longer if necessary? Is a current investment going to be worth much of anything by the time they get to that point, if they do?
<<[Me] And, in the face of all this, one employees gets $600K a year in salary? I now know who is making money off this company. Is anyone else?
[You] You really lose a lot of credibility when you clearly have not done your homework. As many have pointed out, this is not correct. The figure you give is the total aggregate salaries of officers, not the salary of one employee. If you read the recent 10K, you will find that the CEO actually gave back some salary.>>
Okay, I blew it on that one as far as the $600K being for a single employee. I'll discuss this and related issues more later. I am not quite ready to do so yet. I don't want it to be incomplete again.
<<I would also like to point out that this is clearly a speculative investment.>>
You also hit the nail on the head and I agree. It is, at best, a VERY speculative investment. I did not get the impression from reading many of the posts that a lot of folks really understand how speculative it really is. Predictions of hundreds (or more) dollars a share, wreak of get rich quick schemes and expectations and not an objective evaluation of a speculative investment.
At the risk of sounding flippant, I would sure be interested in some of those immediate 50% return convertibles. That does not seem to be nearly as speculative. <g>
Troy
<<You are leaving out some very important details.>>
Before you accuse me of this you should read the contracts a bit more closely. Frankly, if you think I am leaving something out, then quote from the agreement what I am leaving out. I am certainly capable of missing something in the documents. But, so are you.
<<According to the 10K, there was only $865,000 financed through convertible notes, not the $1.9 million that you claim.>>
Actually, I did not "claim" $1.9 million. What I said was:
"As I recall, and I would have to look it up again to be certain, there is about $1.9 million in convertible financing so far." I am sure glad I qualified what I said because as it turns put, you are right, I did not recall correctly. It is $865K. But, me recalling incorrectly, when I qualified it as such hardly qualifies as leaving something out or making a claim. In fact, and so they will be easier to find next time someone wonders, it $865K breaks down as follows
From the 10K filed in 2002:
"In October 2001, we issued the following unregistered securities:
an aggregate of $615,000 principal amount of convertible promissory notes to three investors, which notes are convertible into our common stock at a conversion price of $0.40 per share, and are due and payable upon the receipt by us of certain proceeds from our motion picture currently in production."
"In December 2001, we issued an aggregate of $250,000 principal amount of convertible promissory notes to three investors, which notes are convertible into our common stock at a conversion price of $0.40 per share, and are due and payable upon the receipt by us of certain proceeds from our motion picture currently in production."
"10.18 Convertible Promissory Note [$250K] dated October 10, 2001 by New Visual Corporation in favor of Nellie Streeter Crane, Ltd.*
10.19 Convertible Promissory Note [$125K] dated October 15, 2001 by New Visual Corporation in favor of Quail Run Trust Limited.*
10.20 Convertible Promissory Note [$240K] dated October 23, 2001 by New Visual Corporation in favor of Charles R. Cono.*
10.21 Convertible Promissory Note [$62.5K] dated December 14, 2001 by New Visual Corporation in favor of the Gerald and Judith Handler Living Trust.*
10.22 Convertible Promissory Note [$125K] dated December 14, 2001 by New Visual Corporation in favor of W.P. Lill Jr. Trust dated 12/22/99.*
10.23 Convertible Promissory Note [$62.5K] dated December 14, 2001 by New Visual Corporation in favor of the Handler Children Trust.*"
BTW, for what it is worth, the $1.9 million figure was what they had funded on the film through 10-31-01 according to the 10K filed in 2002: "As of October 31, 2001, we had funded approximately $1,913,000 of the production costs towards this project."
Since we now agree on the amount, let's deal with the other issues.
<<The language appears to be identical in each Exhibit except for the amounts and the threshold at which the notes become payable.>>
I agree. Although I did not read every word of each document, I did (or at least think I did) read the relevant parts that we are discussing and seem to disagree about.
<<1) The notes are not convertible until they are payable. See Section 1 of each exhibit. As such, the holders cannot exercise the conversion now. They must wait until the notes are payable. The conditions that make the notes payable vary, but in general, NVEI must have recovered an amount equal to or greater than 150% of the note amount before it becomes payable. In other words, the notes do not become payable until the movie has grossed enough to pay them. Pretty simple really. Note that for Exhibits 10.19 and 10.20 the notes do not become payable until NVEI has $2.25 million in revenue.>>
While I agree that the Notes are not "payable" in cash until the listed events occur, I strongly disagree that the Notes are not convertible until payable. I think that your interpretation is directly contrary to the express language of the documents. Based on your suggestion, let's look at Section 1 and the other sections.
<<NVEI "promises to pay to . . . NELLIE STREETER CRANE, LTD., . . ."PAYEE" . . .$250,000 (the "PRINCIPAL"), plus an amount equal to 50% of the principal sum (the "NOTE OBLIGATION"). All amounts due under this Note shall be payable if and at such time as the condition to payment set forth in Paragraph 1 shall have been met."
"1. PAYMENTS The Principal and the Note Obligation shall become due and payable only if and at such time as Maker shall have received gross revenues in the amount of . . . US$375,000 from . . . "Liquid.""
"4. CONVERSION.
(a) CONVERSION OPTION. This Note shall be convertible at the option of Payee . . . at any time, in whole or in part, in lieu of and in satisfaction of the unpaid Principal and unpaid Note Obligation hereunder. This Note shall be convertible into that number of fully paid and nonassessable shares of Common Stock . . . as is equal to the quotient of the unpaid Principal plus the unpaid Note Obligation divided by the applicable Conversion Price (as defined in Section 5 [$0.40]) in effect from time to time.">>
The Notes expressly provide that they are convertible "at any time." The conversion option applies to "unpaid Principal and unpaid Note Obligation" and not to only that which has become payable or due. I agree that the holders of the notes cannot make NVEI pay (and NVEI has no obligation to pay)
anything in cash until the conditional events occur, but the Notes do not provide that conversion cannot occur until the conditional events occur. If that had been the desired effect, it would have been very easy to have used the same language in section 4 as was used in section 1.
There is NO doubt in my mind based on the clear and unambiguous language of the contract that they are, as they state, convertible "at any time." In fact, you will notice that NVEI charged the 50% interest expense from the Notes in Q4-2001. From the 10K filed in January 2002:
"The additional payment of 50% of the principal, or $307,500, was recorded as interest expense during the quarter ended October 31, 2001."
This amount could not have been accrued based on cash being payable, since the conditional events had not occurred. Thus, the only way that this would and should have accrued and thus been charged in Q4 was if the amount accrued for some other reason. That other reason is that the Notes were and are immediately convertible into stock valued at 150% of the face amounts of the notes at $0.40 a share.
Please quote me what language, if any, there is that says that they are not convertible unless they have become due and payable.
<<2) The shares are not restricted. So, once the note becomes payable, the payee can, at any time, convert the notes to common stock at a strike price of 0.40 and sell them if he sees fit. The total dilution would be (865,000 x 1.5)/0.40 = approximately 3.24 million shares, not the 7.125 million you calculated. Additionally, please remember that the notes are not payable (and hence not convertible) until the revenue goals have been met.>>
I agree with your calculation of the Notes being convertible into ~3.24 million shares As discussed above, however, I disagree with the last sentence -- they are convertible "at any time."
<<You [WTM] also said:
Thus, before stockholders of NVEI get even, NVEI must get 150% of whatever NVEI ultimately invested by way of the convertibles. If they get the full $2.25 million for such notes, they will need $3.375 million in revenue to NVEI before the owners of NVEI are even.
I [Spokeshave] believe this is incorrect. The $2.25 million includes the 50% override as an interest cost. I an quite certain that I saw that in the 10K. I will try to go back and find it. Therefore, the total "nut" is $2.25 million - not $3.375 million.>>
I think we were both incorrect, but for different reasons. First, I have seen nothing indicating that the $2.25 million includes the interest. Indeed, the JV agreement provides that NVEI is obligated to fund $2.25 million to the JV. The interest (~$308K) on the convertibles is not money funded to the JV. If there is something that indicates this, please point it out. I suppose that the $1.9 million funded through 10-31-01 plus the $300K interest charge from the convertible Notes, adds up to $2.2 million, but I strongly suspect that this is only coincidental -- I seriously doubt that NVEI has spent no additional money since 10-31-01. Plus, the $300K interest charge is not a cash item; that is, it is not cash spent by NVEI.
After writing all of the above it dawned on me that the $1.9 million had already been spent through 10-31-01, but that the final $250K of convertible financing did not occur until December. I think it is far more likely (in fact, almost certainly) that the $1.9 million already funded through 10-31-01 plus the $250K received in December (plus another $100K from somewhere) total the $2.25 million.
But, that said, my $3.375 million figure was also wrong, because it assumed 50% of the full $2.25 million -- which does not appear to be the case.
Based on the current 10K, and assuming that only $865K of the total $2.25 million gets funded from convertible Notes at 50% interest, which results in interest charges of ~#308K, and assuming that there is no other financing cost to NVEI for the other $1.385 million funded to the JV (which is doubtful but not quantifiable for purposes of this discussion), NVEI's total cost is $2.56 million.
In order for NVEI to get its $2.56 million from the JV, the JV will have to generate at least $2.86 million. The answer to your question about how I came up with $4.5 million (from $2.25 and 3.375) is also answered here. NVEI's interest cost is not a cost funded to the JV. It is NVEI's cost of money but not a production cost of the JV. Thus, assuming that NVEI gets the first $2.25 million (they will not) of gross to the JV, in order for NVEI to recover its financing cost, the JV will have to generate an additional amount in net profits equal to at least twice that amount. This is so because NVEI only get 50% of the net, not all of it. In order for NVEI to recover its $308K interest cost from the net profit distribution, the JV will have to have generated net profits of twice that much -- or with this example approximately $616K.
Regressing to my original, and admittedly inaccurate numbers, for explanation purposes, if NVEI had incurred 50% "interest" on its entire $2.25 million investment, an interest amount of $1.125 million, the JV would have had to have generated twice that much ($2.25 million) in net profit in order for NVEI to have recovered its $1.125 million. Of course, the additional $2.25 million in net profit would have necessitated at least an additional $2.25 million in revenue (above the initial $2.25 million) and probably much more. This $2.25 million (from net) along with the initial $2.25 million initial JV gross) would have meant a JV gross requirement of at least $4.5 million.
While it does not appear to be easily quantifiable, there are undoubtedly other financing costs associated with NVEI's $2.25 million investment -- or, more accurately, the remaining $1.385 million not generated by the convertible Notes financing. Non cash costs associated with this financing must still be recouped in order for this venture to be truly profitable for NVEI shareholders. Since they are not easily quantifiable, it is not easy to figure how much more "net profit" must be obtained before NVEI simply gets even in the transaction.
<<Upon its release, we will receive all revenues generated by the film until we recover 100% of our initial investment.>>
I understand that this is the language used in the 10K. It is not, however, the language in the JV contract.
<<It is very clear that *all* revenues generated by the film will be received until the investment is recovered. * * * So, the first $2.25 million of movie revenue all goes to paying off the production costs."
This is neither "very clear" nor accurate. The "gross" amounts quoted for movies are typically box office receipts. These are not amounts that the JV grosses. Thus, a movie that "grosses" $10 million, only delivers some fraction of that amount to the production company -- in this case the JV. That fraction depends on lots of things, but it is far from insubstantial. For example, and this is for illustration only and is not meant to imply that these are actual numbers, if this film grosses $6 million, but only $2 million of that makes its way to the JV, then NVEI only gets some portion of (and perhaps a vast majority of) that $2 million. NVEI gets none of the $4 million that was part of the film's gross, but that never made its way back to the JV. Of course, if the film "grosses" $10 million and $5 million of that makes its way to the JV, then NVEI will likely make some money.
NVEI only gets the majority (and perhaps vast majority) of the first $2.25 million in gross revenue of the JV -- not of the film. They are not the same thing.
One other things that no one seems to be considering is that merely because the film's production budget is within the $2.25 million does not mean that the JV will not continue to incur expenses and perhaps substantial expenses as distribution, exploitation, and marketing continues. These expenses have to be paid from somewhere. The answer to where, is found in the JV agreement, and explains why I am so insistent that the first $2.25 million in gross to the JV does not go to NVEI. From the JV agreement:
"16. REVENUE: In consideration of the services provided by the Parties pursuant to this Agreement, the parties shall be paid a percentage of the revenue generated from the distribution, exploitation and marketing of the Property, in accordance with the following priority:
a. TSSF Venture operating expenses, including all expenses incurred by the TSSF Venture in connection with the distribution and exploitation of the Film and the ancillary rights therein and all costs of production of the Film, which have not already been paid."
Thus, before NVEI gets a dime of its $2.25 million, all expenses, including "distribution and exploitation" expenses, which do not appear to be part of the $2.25 million, get paid. This clause was not inserted for no good reason.
As with how much this film may gross, there is no way that you or I can know how much these other "distribution and exploitation" expenses are going to be. But, it is clear, at least to me, that they are not the same as the "production" expenses funded by NVEI and that there are going to be some of them. The JV will not stop incurring expenses just because the film is ready for distribution.
<<I will not get into a heated discussion about potential gross revenues at this point. Neither of us can really speculate with any authority.>>
I agree.
Troy
<<but regardless, NVEI will receive the first 2.25 million of the gross to re-pay their initial investment, plus a percentage of every dollar the movie grosses.
Your statement is not true. Read the contract. NVEI's $2.25 million is second in line for distribution from funds received by the JV. There is NO agreement (at least not one that has been made public) for NVEI to get any percentage of the gross. Rather, according to the JV agreement, NVEI gets 50% of the net, as net is defined in the contract. The JV may get a percentage of the "gross," but that does not all flow through directly to NVEI. NVEI is not the joint venture (JV) making this movie -- they are only a part of it. From the contract:
<<DISTRIBUTION OF REVENUE:
16. REVENUE: In consideration of the services provided by the Parties pursuant to this Agreement, the parties shall be paid a percentage of the revenue generated from the distribution, exploitation and marketing of the Property, in accordance with the following priority:
a. TSSF Venture operating expenses, including all expenses incurred by the TSSF Venture in connection with the distribution and exploitation of the Film and the ancillary rights therein and all costs of production of the Film, which have not already been paid.
b. INITIAL DISTRIBUTION: MOGS shall be paid One Hundred Percent (100%) of the gross revenue received from the distribution and exploitation of the Film and the Property in all media (including, without limitation, all ancillary rights) worldwide until such time as MOGS receives the sum of its initial investment of up to $2,250,000, which shall not include interest, plus any such additional financing provided pursuant to this Agreement (the "return of investment").
c. Deferments, if any.
d. Third Party Participants, if not paid directly by MOGS or FIGS.
e. ADDITIONAL DISTRIBUTION: After the return of MOGS investment, MOGS and FIGS shall each receive Fifty Percent (50%) of all net profits. The net profits shall be defined as gross receipts received by the Film and the Property, to the extent related to this Film, in all media (including, without limitation, all ancillary rights) worldwide, less the aggregate of all costs, charges, fees and expenses of the Film and the Property. For purposes of computing net profits only the costs and expenses approved by both Parties and incurred by either Party directly on behalf of the Property shall be a charge against and shall reduce the gross receipts of the Property in calculating net profits of the Film and the Property.
Back to your post:
<
That is not true, either. Not all warrants and options from public companies are turned into "144 restricted shares after they are issued." In fact, in the context of convertible notes, it is VERY uncommon for converted shares to be restricted in any way. In any event, there is NOTHING in the agreements that indicates that the stock issued on conversion is in any way restricted. If there is such a provision or an agreement, it does not appear to be among anything NVEI has made public. If it is, please point me to where it is.
<<even though the movie was announced after the tech was aquired i'm positive it was in the planning stages way before we aquired the tech.
It does not really matter to anything whether the movie agreement or tech agreement were cut first. The only reason I mentioned it is because I was chastised in part on that basis for not having done any DD. As it turns out, my initial statement (which I thought was true when I made it) was in fact true (at least according to the publicly released statements by NVEI) and it sure looks as though I was not the one who had not done the DD. But, that said, it makes no difference to any evaluation of NVEI. This aspect is a dead issue as far as I am concerned.
<<the gross dollar figures you are seeing talked about have not been plucked from the sky by NVEI, but rather those are the figures the distributors they have been talking to have given them.
And this is publicly disclosed where? Surely, this is not nonpublic information has not been provided only to a select few.
<<it's my understanding any distribution deal that is signed will be a percentage based one. john said they have several options. they could sign with a major distributor and have the film played in more theaters, but this would probably cost them a greater percentage. or they could sign with a smaller distribution company, have the film shown in fewer theaters but get a bigger percentage of the gross. bruce brown has been in the motion picture industry for 30+ years so there's no doubt in my mind he knows the in's and out's of that industry.
I do not doubt that any distribution deal will result in the JV only getting a percentage of the gross: in fact I agree with it. But, that is, in part, my point. The total gross does not all go to the JV. The JV will only get a portion of the gross -- not all of it. Thus, it is not true that the first $2.25 million of the movie's gross goes to NVEI.
<<i have read several articles about the up-coming movie in various surfing publications. it seems the surfing world is very excited about this film. there's a link in the links page for one of those articles.
I have not read those yet, but I will.
Troy
I have done some more (but not complete) looking at NVEI.
You asked me:
"How much DD did you do before jumping all over NV?"
and then said:
"3D and movies was their goal before technology came along. During that time a financing deal was made for the up coming movie. THIS WAS MADE BEFORE THE TECH!!!"
Actually, the movie financing deal (April 2000) was AFTER the merger (completed in February 2000) that brought the tech. Thus, I cannot resist asking, how much DD you did before jumping on me? Just in case, that question is rhetorical and does not seek or require an answer.
That said, I have also looked at the JV agreement for the movie and it does appear to define net profit in a more traditional manner, rather than in typically evasive Hollywood fashion. Thus, assuming the movie generates sufficient revenue, discussed below, there appears to at least be a possibility of potential profit, at least in the sense that the definition of profit does not wholly exclude it.
It is now within 5 months of the "end of summer 2002" and I wonder whether there is a distribution agreement in place for the film? This really is a question and not an accusation that there is not.
Finally, having read the convertible agreements more closely, I will be shocked if they have not all been converted. The conversion privilege allows the holder to convert not only the principal, but also the 50% "interest" into stock at $0.40 a share. As I recall, and I would have to look it up again to be certain, there is about $1.9 million in convertible financing so far. The additional 50% raises this to $2.85 million, at $0.40 a share = 7.125 million shares.
Lets assume that I loaned NVEI $125K under these terms. I have a convertible option to get $187,500 of NVEI stock at $0.40 a share. Thus, by accepting 468,750 shares, NVEI no longer owes me any money. At the recent $1.00 price, my initial investment of $125,000 can be liquidated for $468,750. Under the note, the most I could ever be paid in cash is $187,500, but if I exercise I can now get more than $450K. It is a no brainer. Frankly, it is a no brainer for an immediate 50% return at ANY price at or above $0.40. Since the note provides that I get NO money (principal or "interest") unless NVEI collects money from the movie, I have NO assurance that the note will ever be paid. I would be taking the production risk. However, since I can immediately and at any time convert the note into 1.5 times as many shares of stock, the ONLY prudent financial move is to convert. It makes NO sense to wait to get paid back in cash.
Thus, before stockholders of NVEI get even, NVEI must get 150% of whatever NVEI ultimately invested by way of the convertibles. If they get the full $2.25 million for such notes, they will need $3.375 million in revenue to NVEI before the owners of NVEI are even. Of course, to get to this $3.375 million, and assuming that the JV never has any expenses above the $2.25 million, which is unlikely, the JV (not the movie) must gross at least $4.50 million. The movie's gross will have to be MUCH greater than $4.5 million for this to happen.
And before anyone tells me that this "could" gross $20 or $30 or $100 million, save your breath: there is NO objective basis that you are aware of (nor that I have been able to find in any public information of NVEI) for making such a prediction. I doubt that there is any such public prediction by anyone from NVEI. Merely because some other movie grossed some amount means NOTHING about what this one "might" do.
One final question, has anyone ever asked how much money would flow through to NVEI if this movie "grossed" $20 million? Has anyone ever asked what this "feature length" film has to "gross" before NVEI stockholders get even? When you (used generically) have an objective basis to answer those questions, then you can tell me that a $20 million gross has any meaning or is sufficient for NVEI to make money.
There is nothing wrong with speculative investments -- so long as those speculating understand all of and the real risks and just do not assume based on the way things appear to be because of how they are worded.
All for now. I'll discuss tech and other issue(s) next time.
Troy
Doesn't really matter in this case, but I hope (for your sake) that whatever gremlin ate it did not eat anything else.
Troy
That link has worked for me until today.
Troy
Did you take down one of the links?
My favorite places link no longer works:
http://www.investorshub.com/beta/default.asp
Obviously, it was not difficult to edit the link; just an observation.
Troy
<<Is that one you like?>>
Not really, just noticed it. Someone else, somwhere else, had mentioned that their post was 299946. Thought I'd check to see if 300000 had hit yet and it had. I suspect there are more then a few folks who wish they had that post number.
Troy