SunWorks Inc (SUNWQ)

[SandridgeEnergy]

The company was desperate to keep Abe before.

In response to an article I wrote about how the company altered Abe's promissory not to be 3x more valueable (~.50 conversion instead of 1.50) an author who was talking to the CFO at 4AM in the morning had this to say.

By the way this level of analysis is coming from a guy who plagiarized the first part of his article straight from the 10-K, it's my opinion someone fed him this answer (though he denied this at the time):

No shareholders got screwed. Let's look at this from all perspectives that matter; the option holders, the board, and the shareholders.
From the option holders perspective, their options were deeply in the money from September 2014 to March 2015. They were exercising those options consistently through the first seven months and had exercised the majority of them. Then through no fault of their own they are locked out from exercising and taking the profits they had due. They had a right to those profits.
From the board perspective, the primary option holder was an extremely valuable employee. He may be the person most responsible for the company's success since January 2014. Top management had no no experience running a solar installation company but he had. One of your most valuable employees is locked out of taking profits he had coming to him. What do you do? I know what I would have done, and it's the same thing the board did.
From the shareholders perspective we expected the shares to be exercised for $0.52 if the stock was materially above that. We got that and we got a stock price that was well above that. A win for the shareholders. Everything was detailed in the 10Q's and 10K's.
So everyone won. The employee got his deserved profit, the board kept a valuable employee, and the shareholders got what they expected plus a much higher stock price. And we're going to get a lot more once the market realizes this company is for real with a great business model in a rapidly growing market.

The dilution that occurred was exactly the amount they expected to occur when they issued the convertible note. That note came from an extremely successful acquisition. Shareholders have suffered nothing here, and have in fact benefitted from the management brought in through the acquisition. Management of SUNW didn't know how to manage a solar installation business, management of Sunworks United made it happen. You are really dealing with minutia now.

And now with the benefit of hindsight it looks like that note was changed, costing shareholders millions, so this guy could fail, mire the company in accounting issues, and then leave.