Additional meeting stuff:
At the meeting, shareholders received the agenda for the meeting that consisted of the introduction of the directors and officers and the presentment of business (the items being voted upon).
The first was the 10B authorized shares. I spent about 30 or 40 minutes elaborating how doing this has caused some long time shareholders to sell out of the company. They wanted to place emphasis that the shares are only authorized and not outstanding. I tried to voice concern that most investors when doing DD on a company look not only at the O/S but the A/S as well and this may cause S3 to be less attractive to new investors. I definitely got the point across that shareholders are not happy about the share increase and that is what many are focusing on at this point.
S3 has a long-term vision for this company. I do believe they are attempting to raise the PPS and are focusing on shareholder value. Unfortunately for short-term traders, their idea of increasing shareholder value stems from increasing revenues and assets which takes some time. Fortunately for long-term investors, their idea of increasing share value is on a much larger scale than most are thinking. They are looking for big, long-time investors. This is one of the things Equiti-Trend is doing. I asked how they thought Equiti-Trend was doing. I didn’t get the feeling that they were completely satisfied at this point and were still evaluating their performance.
The directors indicated that the deal with La Jolla is essential and the terms were very good. As I said before it’s to secure lines of credit. Just as an individual must have collateral to secure a loan for such things as buying a home, S3 must have the collateral to secure a loan through a Chinese bank. This is where La Jolla is essential. From what I’ve gathered, most financing deals allow the shares to be sold 40%, 60% and sometimes 80% below current market value. The La Jolla deal is for 20% below current market value.
Sino is doing great which is why they need the line of credit from a Chinese bank. If they can secure a line of credit, revenues from Sino will be big and dilution should be minimal. As we have the FDA (Food & Drug Administration), China has the SFDA (State Food & Drug Administration). Products such as For Life’s Stomocur 2 piece colostomy product need to be approved by the SFDA before being sold to the Chinese. There is a 90-day waiting period to get paid once these approved products are sold into the Chinese market. Another thing to consider is that Sino is paid in a “net” fashion. I don’t know if that’s for everything but the revenue received will be net. This is different from the U.S. principles, which receive everything as gross. These are only parts of the considerations facing S3 when consolidating the financials from the Chinese. I’ve only taken one accounting class in my life so I don’t know accounting but they seem to have a lot of work ahead to consolidate the financials by the end of September.
Erebusant had asked whether they would replace the accountants if they did not produce the financial reports on time. The accounting firm is Chisholm, Bierwolf & Nilson. I don’t remember exactly what was said but something to the effect that they are very suited to consolidate the companies and are very familiar with the Chinese principles.
The Parson Law Firm that was approved has been our legal counsel. We just had to approve them for the annual meeting. We will have to approve them next year as well. I asked them what would happen if shareholders voted no for the Accounting Firm or legal counsel. If we had voted no, then they would have had to have another vote. If that didn’t pass then they would have had to get feedback from shareholders who they wanted and then vote on that. This is possibly a long, costly process.
The board of directors is also all the same people we’ve had.
All of the directors are great people. Not that this makes a company but when speaking with them you know they are not some corporate suits that are going through the motions. These guys are diligent and personable. I know that they are working hard for the shareholders and that business is shaping up very nicely. Mr. Bickel is working his tail off. I believe that Sino is growing at a quick rate and Redwood will have many more companies to bring to the U.S. markets as soon as they are able to audit more companies and get them into the pipeline. As I said, Mr. Bickel is looking for 30 or 40 companies to be in the pipeline at any given time.
There were also things regarding Redwood that could not be discussed until the news is released.
The way things stand; S3 will be very strong with revenues from Sino and assets from Redwood. As soon as we are consolidated, we should be getting much more financial info and on a timelier basis.
I was going to post this on Raging Bull also but it's down for maintenance. There are still a couple of people on that board that I would like to keep informed about S3I so feel free to post this there if you would like.
See ya,
Sloth
AI
