I'm well aware of all the connections and anybody that has read the filings should be well aware of them also. They didn't try to hide any of this, in my opinion.
The following is my opinion and read on the situation. Take it for what it's worth...
I see them as originally setting all of this up the way they did so that they could use FLPC as a mechanism to fund their idea and still maintain the majority of the proceeds and assume a limited amount of risk. What did they care about diluting the hell out of FLPC stock when the majority of their pay dirt was coming from their other companies?
The problem that they ran into, however, is that no large investor would take them seriously under that structure. Why would I invest millions into FLPC when I'm losing half of the profits from that investment right off of the top?
As a result, they came to the realization that the only way that they would be able to make their investment worth anything was to consolidate it all under the FLPC umbrella. The price that we paid to acquire these companies was cheap, in my opinion, given the current PPS. But, therein lies one of my concerns. What incentive did Don have to try and prop up the pps while all of this reorganization was going on? What incentive does he have to so until the deals close?
I believe that the consolidation aligns everybody's incentives more closely. It should also make us more attractive to potential investors. These deals alone more than double the potential profit we would have realize prior.
Now, they are all sitting on a nice pile of FLPC shares. It's not a coincidence that once this consolidation process started, they started focusing on finding non-dilutive types of financing rather than convertibles.
All that being said, the way things were structured has always been a long-run concern for me. I personally like this consolidation a lot and I think it simplifies things quite a bit.
I don't want to sound too critical here. While they may have used this period as an opportunity to load up shares, so have I. If they succeed and this stock rebounds, I'll be glad it all happened the way it did.
FLPC!
AI
