my02cents - let's discuss Phil's convertible loan as well. Just to refresh the group on the facts:
1. Phil "VTI" Verges loans Phil "NMKT" Verges $5million in Q3 and Q4 of 2004. It's not disclosed to investors at the time via 8k.
2. In the Dec 31, 2004 10k, a small sentence in the middle of a disclosure paragraph says that VTI loaned NMKT $5million. Two pages later, a small sentence in the middle of a paragraph says that NMKT is carring $3.8million of convertible debt, loaned from a related party, earning interest at 8%, and convertible at 10cents per share (40million shares, at an 80% disccount to market). Add the two together and you get "VTI loans $5million, of which $3.8million is outstanding as of year end, with terms grossly unfair to investors. (side note - what happened to the other $1.2million? Well, as we all know, the big driver of NMKT dilution is debt conversion...so take a guess).
3. An avid 10k reader (me) points out the loan on raging bull, sending Lutz and Phil into damage control mode.
4. Phil issues a letter to shareholders, lying about being the beneficiary. (Apr 25 2005 8k filing).
5. Phil, still under pressure, sends a 15 paragraph email to telephonics admitting that he is behind the 'related party' loan (as if that wasn't obvious)...but then says that he will not convert ("security for the loan"...as if it needed security..."take over defense"...as if that's good for shareholders...."impractical to convert that many shares"...see next) http://www.ragingbull.lycos.com/mboard/boards.cgi?board=NMKT&read=54176
6. In Q1 2006...Phil converts half the remaining $3.8million loan balance, pocketing a profit between $3.5million nad $7million (did he sell at 75cents? 50cents?). Once again, this insider transaction, like all of the other related transactions, goes undisclosed, except for a small mention in the 10Q that would require significant historical knowledge of the deal.
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