Well, based on all the circumstances and everyone getting at each other's throats, the reality is that we have one solitary hope: the Intel suit. It's painfully evident that nothing else will be done to move the business forward. With that in mind, here are a few thoughts and observations:
1. The company has divulged that, absent a cash infusion, it will run out of money in the first quarter of 2022. Looks like there is under $1 million left, and the ongoing legal fees will ensure that the money dries up;
2. Inasmuch as we would hope that a settlement can be reached with Intel, my supposition is that Intel won't budge. Why would it? Not only has it revealed with other infringement cases that it is willing to go to trial, but it also has the opportunity to continue appealing and pushing back, thereby dragging things out. It has that luxury as a company with resources. Further, one quick look on the part of its attorneys into the financial condition of HDC would help make that strategy an easy decision. In other words, we are likely in it for the long haul (assuming we get that far);
3. Based on the above, I'm not sure how we can expect anything but the 'long haul'. Who is going to pony up with an investment for a company that hasn't monetized anything, not to mention the fact that our patents are forever getting closer to expiring? Perhaps insiders throw more money at it and, if so, they convert to more shares, and the rest of us just keep taking it on the chin with seemingly no end in sight, and certainly no guarantees of a windfall from Intel in the near term. Meanwhile, the share price doesn't move in the right direction;
4. In the meantime, the 10-k includes the following: Additionally, the Company noted in its motion that Mr. Quirk’s claims lacked substantial justification, were commenced and maintained without reasonable cause or for an improper purpose, and the Company’s 2020 attorneys’ fees and expenses of litigation in the amount of $216,000 are reasonable. For strategic purposes, in November 2020, the Company elected to withdraw this motion against Quirk, without prejudice to renew as may be appropriate. I'm not sure what the strategic purpose means, but the money is gone for now;
5. Another telling issue relates to Dr. Zhang's compensation. We've certainly known this all along, but it has unfortunately been clarified - the guy is simply not involved, although he's the guy with the subject matter expertise. Shameful that they appear to just pay him a stipend to be the Chief Science Officer, but otherwise haven't capitalized on anything to drive revenue;
6. Unfortunately, the 10-k also includes the following: On September 24, 2020, the Company accepted service of a lawsuit filed by Laurie Venning (“Venning”) and one of his companies, Vennwest Global Technologies, Inc. (“Vennwest”) from Alberta, Canada. According to recent publications, Venning is involved in additional lawsuits, one of which is against his formal legal counsel, Dentons, who has countersued Venning. Frankly, putting aside the merits, or lack thereof, of the arguments from both parties, this second sentence about Venning being involved in additional lawsuits 'based on publications' is concerning, if not alarming. I certainly get it – HDC threw it in there to subtly ‘suggest’ that the complaint has been filed by someone who might not be above board. However, it’s pretty easy to understand that any other lawsuits which this individual may be involved in have no direct bearing on the HDC complaint. Can you imagine if it was the other way around? It’s sadly comical that Venning could say the same thing about HDC. In other words, it doesn’t give me the warm and fuzzies that HDC leadership didn’t have the common sense to leave this out of our 10-k. Thus, in and of itself, it is all too revealing about our chances for success.
Normally, I would have found myself hoping for things such as a legitimate annual meeting and enhanced communication to shareholders. However, at this point, it's not worth worrying about, since those normal expectations either won't happen or, if they do, they won't bring value and will likely be a waste of time and money.
I wish there was a ‘glass half-full’ argument, but I’m having trouble finding it.
