You say you "don't know how" they liquidated. Someone asked that question at last Tuesday's shareholder meeting. It appeared at first that the question generated a lot of confusion. It was as if everyone on the board panel was suddenly trying to get up and head off in every direction. It was really quite unique. Then after a bit someone (I couldn't catch his name/title) took a mike -- it wasn't a board member, nor did it appear to be a member of senior management, Then whoever it was provided an answer of sorts.
The answer was that shares in Simon and Louis's respective estates were "double-counted" when reported in the 2017 Annual Report because they consisted of shares held by Kerns Corp and Living Data Corporation. The background to this involves each brother having been the owner of 50% of each corporation, the result being that each brother was the "beneficial owner" (as opposed to direct)of 1/2 of the total number of Vaso shares held by both corporations.
Here one must assume that sometime between 3/31/18 and 3/31/19 (the posting dates for the Item 12 "Security Ownership" disclosures) Simon/Simon's estate bought-out Louis' estate's interest in both Kerns and Living Data. But since Simon's shares and Louis' estate's shares were "double-counted" in the 17 Report, there was no change on the 2018 Report in the number of shares Simon's estate owned. While the listing of shares beneficially owned by Louis' estate according to the 2017 Report became zero in the 18 Report.
I seem to recall some of the shares Louis owned fell outside those he beneficially owned through Kerns and Living Data. In which case their liquidation would arguably have required an SEC disclosure/filing, which to my knowledge hasn't happened. The larger point is, management could have done a much better job explaining these changes in the Annuals under the Item 12 disclosures. It didn't. Skeptics call that obfuscation. And whether "double-counting" qualifies as an SEC violation, I don't know.
The "larger picture" part in your post is spot on. No question. In my opinion, they woke up to the cash flow/inflated costs problems about four quarters later than they should have. I remember when someone asked, about three annual meetings ago (the last one in NYC) if they had identified/quantified the Net Wolves market. The answer was No. Leaving people in the audience dumbfounded. The follow-up question to that would have been, "Then how could you possibly have determined if the price you paid for Net Wolves was the correct amount?" Then when someone asked management to identify the "reputable . . . investment banking firm" (as characterized in the 2015 Annual Report) who confirmed the fairness of the purchase price, management refused to do so. I mean, if you made a video of this, you could play it in every business school in the country as entertainment on April Fools Day. They wouldn't be able to stop laughing.
eecpfan
