Yes...
The CEO stated that the Q wouldn't be anything great.
What he didn't do was ;
1.) Warn that revenues would see a near 55% decline from the same period last year.
2.) Warn that revenue would see a 30% drop in revenue from Q1 2017 to Q2 2017.
So I think that he shouldn't have said anything because what he did say ABSOLUTELY DID NOT REFLECT THE ACTUAL MATERIAL CHANGE IN SFOR's FINANCIAL CONDITION.
I want positive sentiment from SFOR, positive Press, Positive 8K's from SFOR as much as the next trader. What Kay did was, in my opinion, even if it was an effort to comfort shareholders, was mislead them.
He shouldn't have said anything.
Mofran, you've seen his emails. Maybe you've even gotten an email or two or more from him. The point is that Kay was eager to give interviews and talk about deals, lawsuits, channel partners etc. All very feel good stuff right?
I'm sure you'd agree that if SFOR signed a deal for $175K that it would be two things:
1.) Represent a material change in their financial condition
2.) Press release worthy and probably lift the stock.
Well, Mark Kay did not mention, in any interview, in any phone call, or in any email that I'm aware of, that he signed a $175K convertible debt feature that's potential very dilutive to shareholders.
At current prices, if converted, SFOR would add nearly 20 million shares to the O/S.
Did you read the Convertible Promissory Note in the 10Q?
Did you know that the Note Holder gets a 42% discount to the closing price?
If SFOR keeps falling, in 7 months when the Note Holder can begin converting, let's say SFOR is trading at $0.0050. The Note holder gets their shares at 42% off $0.0050 or roughly $0.0030.
Now instead of converting into 20 million shares...its dilutive to the tune of 100 million shares...or more.
You see, I believe that this Convertible Promissory Note is material to the financial condition.
SFOR knows that they disclose in every 10Q and 10K that they'll occasionally do this type of financing so they don't have to issue an 8K on a CPN of this size BUT MAYBE Kay shouldn't be spinning tall tales of deals if he's not going to to tell you he just diluted the crap out of you with this DOOZY of a "deal" for $175K.
Last thing Kay didn't do was talk about compensation. He talked about all kinds of feel good stuff, but he didn't talk about the raises he's gotten.
When a Quarter isn't "going to be anything special" perhaps it's not the best time to give yourself a 100% pay raise compared to last year.
How does ANYONE justify $58,000 in revenues and $205,000.00 in compensation?
So, you see Mofran...Kay isn't being transparent and he, in an effort to soothe savage trading beasts, he's misleading them. He's lying to them. He's sugar coating turds.
Call it what you want but Kay gets all kinds of credit for being honest and up front and willing to talk to shareholders and be a "straight shooter" when that credit is sorely misplaced and not deserved.
