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smells true. something is wrong in the interpersonal skills of the principals at Virtra.
at least we know what they'll do with the shares.
"Is everyone as confused as I am about what to think here?"
I am, half wondering if Kelly's return to the Board room would help the situation; half wondering if this doesn't further indicate bad decision-making on the part of those who likely caused the separation and made hash out of the relationship; and wholly wondering what Kelly is doing, really.
Somehow, I don't want to read an entry from Kelly about his hourly rate and the cost of stamps.
Perhaps we should think of this as part of a complex negotiation.
Yes, this means that the subject of Kelly and his leave-taking and the situation under which all that occurred goes front and center at the meeting. And so a final wondering, soon to be answered: will the subject be made out of order, now with a legal justification. ("Our lawyers have advised us not to comment on pending litigation.")
Painful.
Anti-phobia simulations. Yes....
"The only way to overcome any fear is to face it," he said. "Fear of management is one example, as is fear of sliding valuations."
"We at Virtra Systems have an answer. Our 3D simulators can give you experiences that are akin to those described by Charles Dickens in A Christmas Carol.
"We start with the historical perspective, allowing you to walk through an American city in the 1920s as investors jump out of windows. Relax! It's far worse in your imagination than in our shared reality.
"Later, we bring you to a conference room in 2006, where sober executives say, "You must be responsive to our shared needs. We have an emergency!" They also tell you that confidentiality precludes the firm from revealing the terms of an attempted sale of its most important assets.
"In a related scenario, you're asked to discern the company's odd relationship with a CEO who was all-but forced to resign and who was then treated as a stranger. As you ask about integrity and emotional balance, you will be told that such questions are 'inappropriate' and 'insulting.' How will you respond when your microphone is shut off?
"In your last and most difficult moment, we introduce you to an American courtroom in 2008, where you argue on behalf of a shareholder whom the script identifies only as 'the naif.'" You see, you'd make a very good advocate for shareholder rights!
"The combination of these experiences will lessen your fear of ceding control to people who know better than you do, and always did."
your comments on kelly have this undercurrent of something not said. or something said but not amplified. or something.
when kelly himself asked you about this, you said something to the effect of "oh i meant nothing against you. i just wouldn't want anyone to make their decisions on the basis of someone else's opinion."
i have the impression that kelly's description of what happened is what happened. am i likely incorrect? are you implying that something quite different happened? or may have happened?
if you say again, "no, i was just trying to be fair; you never know," please be aware that the tune doesn't seem to match the words.
People seem to have different takes on Kelly's likely purposes and sensibility.
Can we agree that some kind of clarity about the events of Kelly's leaving would be a good thing to gain from the conference call? Weo, it is not quite on target to say "I don't care about the past." We are discussing an event in the recent past that directly speaks to whether the board members should be trusted with more shares than they need to handle the current situation. Actually, it might even speak to whether we should "love it or leave" the investment.
What happened that caused some insiders to want to sell a chunk of the assets and others to perceive that the idea was crazy? Are the assets as valuable as Kelly thinks? Is it true that some insiders went behind Kelly's back? Is it because they had a superior understanding or because they had a misunderstanding or because (by some stretch of the term) there was corruption?
This is not meaningless wallowing in past events. ("How do you really feel about all this?") No, this is exactly relevant to whether management is sensible, to whether the assets are valuable, to whether the investment is appropriate.
We should try to draw out what happened. Who did what to whom? And why?
"I think that's certainly a fair question in light of the fact that they now want your vote after deciding to sell the company back in April."
Is there anyone who does not see the point? Am not wishing to bash a dead horse, but the tone of some comments (including someone's suggestion about "not being married to any stock") makes me think that a central idea is not being considered; and "love it or leave it" is irrelevant.
If Ferris et al. acted in a way that had little business sense, if their judgment was short-sighted in the extreme (as seems to have been the case), why would you provide them with shares far beyond what is necessary to handle the immediate need? Why? To save a few dollars on a later proxy that may be necessary in any case?
Given Ferris's technical competence and stage presence, you can love him and not leave him; but you can deny him and the others a power that is now yours and that you can retain just by saying "No."
Q: If the Board tried to sell significant assets at firesale prices and if the General (who may have a better grasp of business) is mortal, how can shareholder interest be served by increasing the authorized number of shares, when the use of those shares is (to some extent) at the disgression of the same Board?
Q: If an acquisition or merger requires shareholder approval of another proxy statement, how can shareholder interest be served by refusing to combine the two requests: one for a significant increase in authorized, the other for approval of the acquisition or merger?
Q: How many dollars would it take to pay off Duchess? Is there no shareholder who would pony up that cash for a premium?
Q: Wouldn't subsequent proxies be far less expensive than the initial one, given the use of boiler-plate language? In particular, what is the SEC filing fee? Can shareholders help? Couldn't folks do the proxy work on weekends, holidays, vacations, so that the real added expense is all-but nil and so that shareholders retain greater control and a greater percentage of the firm?
"The kids over there need better training."
Poignant phrase.
independent of whether the opposition is paranoid or rabid and independent of whether the consequence of accepting the proxy at Virtra is to dilute value or to accrete value, the absolute value of a stock is not meaningful; the percentage gain or loss is.
if you have $1000 worth of a .07 stock, and the company dilutes so that each share is worth .007, you still do not have a license to kill, but you're down $900 as surely as if you held a $7 dollar stock that went down to 70 cents.
further, a company-changing deal at 50 million shares becomes a nice supplement at 500 million, so bankruptcy is not the only issue, nor is "believing in the technology." you might believe in the technology of General Electric, but you might not want to be limited to small gains.
i'm going to try to lurk now, too, except to say that i can't imagine voting "yes" if Kelly says that he's voting "no." if the ever-optimistic CEO says that the idea sucks, the idea sucks. the firm would do well to treat Kelly as a representative of at least a subset of shareholders.
The objection that Kelly might have an axe to grind is noted. my belief is that he would keep his emotions in check, if that were an issue; but anyway, lawyers don't have emotions.
seems true <eom>
"You are asking the automotive mechanic to make money fixing cars before he is allowed to buy the tools he needs to fix the cars."
Okay, let's follow this, please.
Wasn't the intent to include the merger detail with the proxy? Why not insist that the deal be struck before the mechanic is holding the tools? (perhaps the metaphor is not quite right....)
Someone should address this from the "pro" point of view. What is wrong with insisting on a negotiated deal before accepting the requested number of authorized shares? The current order of events is not required, and was not intended. Why allow it?
Got burned, yes. As have you, if I recall one of your posts. So... wouldn't we want to learn from the experience, and wouldn't we want others to learn from our experience?
Sorry to be in "bad taste." I feel that you are being combatative in a personal way, in a way that does not address the subject at hand. I wish you'd return to being SirFelix the cool guy, able to communicate without causing offense.
Have often called Kelly the ever-optimistic CEO, yes. Was impressed on meeting Ferris, yes. Am concerned now, yes.
SirFelix, really! No one defined dilution to mean any increase of shares for any purpose. The fear is ... dilution. And it can come in the form of incentives or just unwise decisions.
It seems to me that managers of small companies are getting away with activity that is criminal even if it is not punished as such. Fiduciary responsibility is not always fulfilled, and the judicial system is not responding, which means that shareholder control is even more important than if (a) integrity was commonplace and (b) the judicial system punished evil-doers instead of rewarding lawyers.
You are not responding to what I've actually said. Instead, you are setting up a straw man and setting him ablaze.
Let me help you. Begin with a softening statement that strokes the other.
"Ellington, you are correct [Ahhhhhhh...] that other companies have pulled the wool over the eyes of shareholders. However, Virtra is different. [Oh?] First, the company has an actual business, is not vapor. Second, the company is led by a man of integrity whose every interest is to be successful. Third, the merger is in a late stage of negotiation, and the firm probably intends to give details that will remove at least the depth of your concern. Fourth, I don't think that a failure of this proxy will have devastating consequences, so we need not be so focused on ensuring that the company knows that it has an uphill battle. Worse comes to worse, they will re-issue the proxy in time for a decision in early 2007. Fifth, although it is possible that the Board was trying to sell a significant portion of the company's assets at fire-sale prices, we do not know the details and may be able to learn them at a conference call."
You may want to improve those points to reflect your perception and to otherwise respond to the real and appropriate concerns that are being expressed.
"How is this decision 'opposed to shareholder interests'?"
The use of shares for dilution would be opposed to shareholder interests, yes? The use of shares for that purpose is possible only if the authorized increases.
Will the firm say that they will use the shares for dilution? No, they will say their intent is to use it for deals that increase shareholder value. Does every firm claiming the best intentions fulfill the best intentions?
No, and that's the point. Why provide a blank check?
Let's put it another way. If management had asked for 400 billion shares, would you say, "How is this opposed to shareholder interests"?
It is odd to say that a huge increase in authorized is probably fine, even though the expected, accompanying decision (is a specific deal good or bad?) -- a decision that was going to be in our hands -- will be out of our hands, with the financing decision divorced from the use decision.
Wouldn't you rather be included in the decision to merge?
They lack shares. If I understand correctly, the shares are necesary to complete their obligation to Duchess and to make deals; and in the absence of additional authorized, the firm will have significant problems with Duchess.
SirFelix, ask the horse.
My main point is that there is time now. If we are faced with a "take it or leave it" kind of choice that is opposed to shareholder interests, we should leave it, having made clear from the start that such a choice would be rejected.
fair enough.
however, it's good to make noise so that the firm has no illusions but that this change has to be in the interest of shareholders.
in late November we should not hear, as the main justification for a "yes" vote, that the proxy must pass because if not, there will be hell to pay. that's not a reason to pass the proxy. it's a reason to change it now.
folks should make that sort of point with the company, and then if do not make an appropriate change and yet have nothing legally binding or convincing to tell us, we should reject the deal even if there is hell to pay.
do folks here agree?
The issue isn't their need for 50 million more. It's their request for 400 million more, with 2 million preferred. This is a very, very large jump in authorized, just after they surprise us with a non-merger and in the face of an unexplained disrespect as reported by Kelly and as may include other major shareholders.
There is something wrong here; at least in the consciousness of the management. And that consciousness is what we are being asked to trust.
This is a big deal. A big change to the number of authorized. We must not say yes simply because they need a few.
good post.
this proxy deal (and our necessary respond to it) reminds me of a rule in life. If someone says, "Do what I want ... or you're a bastard," be a bastard.
Is good. But.
Is there some implication to Virtra having sales -- seemingly, more sales than we are being told in detail -- and then flirtatiously giving up the information in small doses?
Yes, this is legal (the sales are not so overwhelming that any one of them is a material event); and yes, a company should consider how to release its news.
Maybe I'm just sour from the proxy debacle, but the game in this case seems more manipulative than shrewd.
Am sorry to be negative in the face of good news. The last days have really changed my emotion about these people.
"We are all overreacting."
This may seem to be a matter of personal style, but I will tell you my repeated experience. Folks are not hawkish enough when faced with management statements of intent, in the face of huge dilution. "We have to give them the benefit of the doubt" becomes the mantra; then the company is given the right to dilute vastly; and then the company does, and those with power do not feel the sting as others do.
The mantra should be "vigilance." No one has suggested that a later proxy could not accompany details that give a specific purpose of a specific number of shares. Statements at a conference call ("our intent is...") do not give us the same legal protection.
Few win expensive lawsuits alleging that managers did not act with fiduciary responsibility. The court says, "You gave them the power." If they don't have the power, the issue does not arise.
Why NOT insist on a single, purpose-driven proxy? What is the benefit of giving up so much power? Is your experience that people in control are always honest and (even if honest) always follow your best interests when events happen that affect them?
With a "yes" vote, shareholders will have far less control. In the real world, with ill parents and children in need, who is likely to benefit?
Being realistic is not the same as being cynical. It is a matter of keeping business relationships on a formal basis. "If you need 500 million authorized and 2 million preferred for a specific and PRE-NEGOTIATED purpose, tell us about it and we will decide."
Please be realistic.
Is it so, that "a no vote is a vote 'No.'" Or are shares that are held in street name voted 'Yes' by default (or perhaps by broker action), while shares held in person are voted 'No.'"? If the latter is true (and the company seems to believe this), many of the 50 million street-name shares are likely to be 'Yes.'"
We turn to Kelly partly for his general legal knowledge on issues like this.
If a shareholder uprising is going to work, we need folks to hold shares that may be voted. Perhaps a lot of holding is unlikely if the price per share goes to the teens (suddenly, we're back to a sad perception of what is possible), but holding is likely for most of us if the price stays as it is.
Count me in for 325,000 shares in street name, which as of now will be voted 'No.'
Another reason for "No": Isn't it better if those negotiating with Virtra are unsure as to whether the Virtra shareholders will accept a given deal? Doesn't that strengthen the argument for accepting a deal better suited to our interests? And wouldn't it be better if shareholders gave a public rebuke to the company on an earlier decision that is not in our interest?
I am not cooling, but can see one reason why perhaps I should: what if the people on this board (who might represent 10% of the company shares) were willing to pledge their votes to Kelly? Perhaps there is something of a real emergency, and it would be best not to force the company to put out a new SEC proxy later. Maybe it would be best if the firm backed down now, rather than later.
Given the possibility of asking for shares when a deal is done, it still seems wrong for us to accept the huge increase in authorized.
Something else is important. The leadership doesn't talk to Kelly. Why not? The story we are told here, is that the others went behind the man's back, did not consult with him, and therefore gave him little choice but to step away.
Now, assuming that the story is true, the reason for going behind Kelly's back may be the one criticism we can make of him: he was the ever-optimistic CEO. Maybe the others did not want his rose-colored thoughts to interfere with a hard choice.
Their behavior may have been justified, just a business decision. Kelly's response seems as if it too was justified; you can't ask a man to stay as CEO just to protect the stock price. In any case, it is now the new guys who are smashing the stock price.
What if we gave Kelly the right to speak on our behalf? Is there an emotional immaturity on the part of my erstwhile hero Ferris? Or is it something worse?
There's a real danger here, and it's not saying "No."
Please consider this statement very, very carefully:
"The retail shareholders bear the brunt of the damage from the issuance of the excessive numbers of shares initially and then, the second front hits, and we bear the damage that comes from the excessive numbers of shares that the directors and execs then acquire to make up for their losses from the original issuance of excessive shares."
If you need the shares to reverse-merge and you need shareholder approval for the reverse-merge, wait for the details of the deal before asking for the increased authorized necessary to handle that eventuality. Do not ask for a blank check.
"Note that a ceiling of 500 mil does not imply issuing those shares." It makes us vulnerable to other decisions that favor insiders. It implies the possibility of issuing those shares for reasons that are no longer in shareholder control.
The treatment of Kelly should result in skepticism. The lack of information about a seemingly material event (the merger that was in the cards but is not even ready for a proxy statement) should result in outrage.
Didn't you think that the word "proxy" (as mentioned in the General's statements) meant the merger details, too? Whether purposely or not, we have just received a bait and switch. Is this a wrong characterization?
They will find a solution if they are forced to find a solution. As Nancy Reagan said, "Just say 'No.'"
The only way to handle this is to say "No." They could have asked for 180M to handle their relatively small ($300,000) problem with Duchess. I'll bet their expense in going back to shareholders for a merger is not that much more if they have to repeat the interaction with the SEC for the share increase.
Perhaps in a military sort of way, the request for one big increase is a sensible one. But why are we being asked to trust those who run a penny stock? Did YOU know that the merger had ended? Why weren't we told that?
So we already have a question about integrity, and now the firm is doing what any number of penny stocks do -- ask for a huge increase in authorized.
Don't tell me about their huge problem with $300,000. Please. They can re-do the proxy now, they can beg someone for a loan.
And they can stop withholding information on mergers that may or may happen, ever.
We should be in a position of making an independent decision on the wisdom of this or that merger. RoseBowl has already told us that their wisdom may be in short supply in these matters; and I believe him and question why he was treated as he was.
Vote "No" now. The leadership will find an alternative much faster than if they believe that we are such fools as to trust them in relation to a decision where we do not need to trust them. The refusal will boost the stock price, despite the apparent emergency.
If we force the issue now, they will find an alternative.
"With a puzzled look on his face... " Yes, we could begin Chapter 1 that way, though I had thought more in terms of, "Like Moses at the edge of the promised land..."
Maybe that's excessive.
As the man hired to help write RoseBowl's autobiography (in a relationship he does not yet know about) I can assure you that the modifiers "seemingly" and the rest indicate a lack of insider knowledge.
One exception is the value and details of the rejected deal, which he seemingly was wise to reject.
BB, am fond of reading your stuff (perhaps I've posted as much before); and on busy days, yours are the only ones I read. FWIW, I've always thought that a less concentrated holding of stock would improve the stock price.
But I like the story of a group trying to grab the reins, partly by bringing in government investigators, partly by setting up a conversations on public information boards.
One hopes that we don't have a moment when you say, "I guess my faith in SEO was misplaced!"
Be well.
Sir Felix, regret is bad for your health; and the stock game is impossible for most people to win big consistently. Just be happy you and Virtra have a pulse.
RoseBowl, we have two facts here, and they make me uncomfortable. First, folks wanted to sell off substantially all assets at what you and others felt was a fire-sale price. Second, the company that stood to gain from the fire sale said "No, thanks." Why do you think they backed out?
Now, now. Sir Felix is a good man, first among equals. And besides, I use his graphic all the time in instant messages. It much communicates my point of view, which is not anywhere near as negative as that of everyone else. Always darkest before the ... etc. If only Virtra could stop the share press, now at more than 90 million fully diluted.
If no contract detail by year end, I'll join the pity fest.
I had the impression it was pumping, that Cyber wanted to sell a few shares. The tone was unpleasant, FWIW.
OT: about general walldog. Would you want to be dreadfully injured, or your child killed, to prevent (for a time) the 1400-year fight between Sunni and Shia Muslims? A large minority in each group would do worse to us if they could.
What are the best justifications for the American presence now? To show that we will fulfill a promise (as has strategic value); to protect those who trusted us; to kill terrorists; and to give the Iraqis a chance to go beyond their culture.
Would be great if we could make that last choice a reality, introducing some kind of Christian enlightenment to Iraq. It's not bloody likely.
Ex-CEO Steve Parent bought 100K at .01. Hmmm.
http://edgar.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=4493359&Type=HTML
FA, here is the note from RB. Eighthaero is a babbling brook and not concerned with clarity. He's been around for years and is a believer. Some think he's a manipulator, but I remember how he sold all shares because folks were rude to him when he went on one of his expeditions to the excavation area. So I think he's just a gambler. Not the brightest guy in the world, but who is? He's probably telling the truth as he sees it.
By: eighthaero
03 Jun 2006, 12:20 PM EDT
Plum is in fine shape. Staff had 8 hr safety class. I was inside looking for a soul when Scott drove in and we talked for most an hour. Profit opns continues and expected to reach the 1,200 oz mo. goal in steps by end of summer. As I left to take pics of B t Kid pit two haulers pulled out up the haul rd mile down NV 341. Waved to the guys and took some good digitals. The contractor BTW is the owner of the big gypsum dig down at Dayton up on hill to the left off US50. I said we were told was self opn. Scott thot we were informed was a hire co. Then said well he also owns all the new claims we took last summer, Justice, Woodville and Keystone so is rather in-house and have the option to purchase the equip anyway. 2 Trucks now with another 2 on the way when needed in ramp up going on. Large general drill program due in by Aug.
Expect a real demand for both Daegerstrom and original Am Asphalt to justify cost based on actual survey of pad. Reason both mineral claims went to Cahan and Cook was best offer around. The two got investors arranged with good frist hand info on Alberta and Big Mike. Anything comes back is frosting on Plum and from what is implied will be more opn's announced along with a resource bankable this fall. IF!!! Parent would drop court case and just become very rich all will see PPS rise. Is to be hoped. Good word is buy all the .011 shares meantime and wait for a settlement of some kind. At worst, 2nd 10QSB will establish a profit bottom line forever more and that should be that. After 3rd qtr can be no more doubt Plum will pull GSPG out of debt in time. Good trip. Pad is looking super under leach. VERY ORDERLY looking site as best I have seen. Looks a winner to me. My 3rd OTC:BB million awaits. Simply time EA
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
not crooks, but the situation is not happy-making. the firm is now available at a new, Houston number: 1-832-242-1100. The Web site is out of date, and the receptionist who answers the phone may be handling calls for several firms, as she didn't seem to know that the firm had moved.
kelly's comments on the possibility of the loss of a big-time contract (the loss because of lack of government funds) suggests that the technology is well loved; but the failed deal to sell assets (the simulator technology itself, I'd guess) tells us that the buyer was not blown away by the opportunity.
i wonder how it came to be that two board members would want to finalize a negotiation without kelly rather than include him throughout the process and deal with his objections. he would have walked at the mere hint of giving up the asset? i suppose he could have been so obdurate... well, i don't know, but would like to.
kelly, will the remaining guys protect our interests? hmmm...
OT: thanks. would not have thought that immigration was a problem before, but perhaps i was wrong. immigration has benefits to the host country; the result is not all infrastructure costs without added production. but massive immigration can undermine a nation.
by the way, the video referenced numbersUSA.org, which is also interesting.
our writing about immigration on the JDZ board is a bit like thinking of our own mortality. can you feel the coming event? soon we will be wiped out.
"... better than no PR at all."
Though you have a great graphic, you are incorrect. The text sounded tentative and babbling and (unless a further downturn was in the offing, and why would that be so?) it had no effect on the stock price or volume.
We knew Ferris was alive; and frankly, I think better of the image I had of Virtra as compared to the image provided by the declaration of "staying the course" blah blah.
The real question is, when will the merger proxy be available? Someone spent time on that PR. Not helpful.
Dear Virtra:
Do NOT respond to shareholder hysteria by putting out a meaningless PR. Reduces your credibility.
Please do not do this again. What counts are sales, not words. Let the shareholders yell.
So... a rise in PPS is likely in the next four days, as the firm is also supposed to have completed the details on the merger by mid-May. A purchase now is good as a trade; and probably as an investment.
umbra, homeport said "legit [ legitimate ] distraction," and then he said "but"; in other words, you distracted from an ongoing focus, and he thinks that the distraction was completely appropriate. The "but" begins a phrase in which he suggests that the focus on the legal issue is also appropriate.
As the saying goes, he didn't mean to "diss you," which is a phrase that means "disrespect you." He not be hating.