Gamecom/Ferris Shareholder Meeting 9/21/2001
This transcript will not be word for word but it will cover the important points discussed in the
meeting. The meeting lasted 2 hours and all items passed easily. Most of this transcript is Kelly
Jones speaking. I will note when someone other then Kelly is speaking.
Kelly Jones CEO of Gamecom speaking:
Special Meeting of Gamecom I like to thank the shareholders who came here today. I like to take this
opportunity to introduce the officers of the company and who some of the future officers are going to
be. I am Kelly Jones CEO of Gamecom I will continue as CEO after the merger.
John Aleckner is the current president of Gamecom John will remain on the board of the directors of
the combined company. Steven Haag is vice president of operations for Gamecom. Steve will stay
on with the combined company as Vice president of Business Development. Kimberly Biggs,
secretary of Gamecom she will stay on as secretary of the combined company. Lance Loesberg
vice president of business development for Ferris he will be asked to be on the board of directors
and be the executive vice president of the combined company. List of shareholders of record as of
August 10, 2001. There is an additional 1 million shares that are eligible to vote our securities lawyer
did not get the opinion letters to the transfer agent in time for the shares to be authorized and issued.
By law our records are minutes of shares issued and controls and is the determining numbers to be
used. That is why there is a difference between the transfer agents numbers and Gamecom's. Ms
Biggs will now announce if we have a quorum. 14,462,261 shares of common stock as of August
10, 2001. The amount represented by proxy is 10,103,204 so we have a quorum.
Ferris shareholders have met today and approved the merger of Gamecom.
The proxy statement sent out was correct but since we are not a Nasdaq company the first item on
the proxy card approving the issuing of shares in the merger does not require a vote for
shareholders.
Motion to approve the merger of Ferris productions. Got a motion and a second.
For: 10,073,754
Against: 54,600
Abstain: 10,850
Approve the amendments to the article of incorporation set forth in the proxy statement. Got a
motion and a second.
For: 10,030,604
Against: 108,300
Abstain: 300
Approve the incentive stock option plan to increase the number of shares to 6 million shares. Got a
motion and a second.
For: 9,661,138
Against: 32,646
Abstain: 445,428
Approve to elect to change the corporate name. Got a motion and a second.
For: 12,552,546
Against: 2,500
Abstain: 1,300
I am pleased to announce to Gamecom shareholders and to Ferris shareholders that each of the
four proposals has received a vote required for approval and therefore we will direct our legal
counsel to proceed with filing the articles of merger at a soon as possible date and we expect that
this merger is be accomplished by Tuesday,Wednesday or Thursday of next week.
Jim Poynter, vice president of Gamecom and a director enters the meeting.
Is there any discussion regarding these proposals? No discussion.
Mr. Cooper a shareholder of Gamecom asks.
Could you explain the Press release you put out this morning?
We have been looking for a broader perspective for capital the Swartz line is a great financing
vehicle in a Bull market but not a good financing vehicle in a Bear market with low volume and a low
share price. This deal is an outstanding deal for the company. They do not plan on having the
company repay them. They plan on converting. The shares are convertible at current market rate.
We will receive 250,000 dollars next week, we will receive 375,000 on or before October 15th and
375,000 on or before November 15th. The number of shares that each traunch is convertible into is
based on the 5 preceding days closing price. There is no discount to market which is unheard of.
We also entered into a consultant agreement with Olympic for them to find us additional acquisition
targets. All these things started Greg by going to New York and planting seeds this financing
package came out of talks with Prudential and Bear Stearns.
Mr. Cooper asks the purpose of the million dollars is to do what?
Ferris brings some debt into the deal our challenge is going to be utilizing the revenue Ferris
provides us along with the additional market exposure and growth of their reputation to create
market interest in the company sufficient enough to timely address Ferris' debt. This million dollars
there are many mouths to feed at the table but it gets us through the merger, gets our professionals
paid and a few other things. The consultant agreement in the S8 put out today they get 700,000
thousand free trading shares. However if they don't bring us a suitable acquisition candidate at our
good faith discretion they have to sell us back 350,000 shares at a dime. We clearly pointed this out
in the S8 if they go sell those shares today and they don't find us a good candidate they will have to
sell us back those shares at a dime which means they would have to buy them back at the current
market price which could be a lot higher. The debenture shares will have one year restrictions from
the date of the last traunch. This all indicates that they will be long term investors.
Mr. Cooper asks what type of company are you looking to acquire?
We are looking for companies that will increase our revenue, sales and industry presence with
minimal debt. If we can have the right opportunity to create revenue to create more earnings per
share that is the type of things that the investment community is going to recognize. That is how we
are going to get on the kinds of radar screens that we want to get on.
Mr. Cooper asks how far away are we from getting on that radar screen?
Well they know were there were not on the screen yet. That's hard to answer based on the market
we are in right now. I don't know what's going to happen and all we can do is try to continue to build
the company and we are in an industry that I don't think we will be to adversely affected if the
economy continues to deteriorate for an extended period. The whole parameters of the investment
community have changed. They are not looking for market share anymore. They had enough market
share with the Internet companies. They are looking for revenue they are looking emerging leaders
of an industry. Probably the best thing that has happened to this company besides the Ferris Merger
in terms of where were headed is this PC magazine that shows that virtual reality is one of the top
10 industries that will impact our lives for the next 20 years. All the analysts realize that this is a
growth industry. We are negotiating to acquire a competitor of Ferris' that gives us more of the
market share of virtual reality. It is that type of company we are looking for we don't need anymore
debt. That's the challenge of the Ferris merger there was a post on ragingbull that absolutely in my
opinion nailed where this company is in terms of what the Ferris merger does for us and what our
challenge is. It brings us industry presence and as soon as we file these papers next week and are
merged we are now the leader in virtual reality. Lance has a 7 or 8 year history in this industry and
he can tell you how this industry has evolved. We are now the dominate company in virtual reality
and the more we can expand that reach the better off we are.
I asked. The 775,000 shares when will those shares be issued?
It could be issued today. This is why the numbers are different from our numbers and the transfer
agents. Anytime shares are issued there are many things that could happen. The directors have to
approve the resolution to authorize the shares. Then we have to send that resolution to the transfer
agent. Then the securities counsel has to send an opinion letter to the transfer agent informing them
the shares have been authorized and that the company has properly issued the shares upon that
then the transfer agent actually issues the shares. The transfer agent actually prepares the shares
and sends them out. It is not controlling for the 10Q's filed, for the number of shares to vote, or 144's
our corporate records controls. The difference here is that they didn't gets those letters sent to the
transfer agent and because they were mostly our shares we didn't care because we knew they
were properly authorized.
I asked. Is there a certain price they will be issued at?
No, an S8 is issued for services rendered to the corporation. There is no money involved. We
issued 75,000 shares to the lawyers who put together the proxy statement so that we would stay on
top of their priority list so the proxy would be done promptly. The 700,000 shares issued to Olympic
is to pay them for this one year consultant agreement to find us acquisition targets. There is one
small company we are looking at that Ferris knows so the due diligence period would be nil. The
other company is of interest to us but we have to much on our plate right now with the Ferris
merger.
I asked. Does Olympic have a website?
I don't know I noticed all that business. Olympic is a newly formed company. I don't know if they
have a website.
I asked. How many people work for Olympic?
There is at least 10 people who work for the company. There is a Bio-technical, Bio-medical
element of this company that we are looking at. Now we are looking at a company that is 25 percent
Bio-technical. Olympic would take off the Bio-technical part of the company and we would take the
part of the company that relates to our industry and acquire that.
I asked. Are you looking at getting into the Military Industry?
The law enforcement and Military could be the biggest element of opportunities we have for virtual
reality. Deadly force training for police officers for military we can put them in environments that they
can't otherwise be put in. We can make them better officers and better soldiers by putting them in a
360 degree environment. We can put them in places like the Afghan mountains.
Mr. Cooper asks - How far away are you from doing that?
Lance you can answer that question. All we need is someone to cut us a check. The technology is
there we are looking for a buyer right now.
Mr Copper asks - So someone like special forces or Navy Seals or somebody like that will be a
potential buyer?
Lance - Anyone of those and a hundred more it is quite a few actually especially after last weeks
disaster. We got phone calls as recently as two hours ago. It is a very viable industry.
Kelly - I'll say this. A member of the Senate arms services committee has had a fund raiser in this
very office. We are ready and I think the opportunities for that are very real.
I asked. Have you filed a Summary judgement yet to dismiss the ETPI lawsuit?
I don't know if it has been filed and I appreciate the opportunity to address that. The press release
that ETPI issued was extremely misleading. There not going to win the lawsuit period end of story
take it to the bank. There is a clear case in Texas that says those type of agreements are not
enforceable. However the agreement that Ferris and ETPI signed says that it is to distributed under
Delaware law. The judge said two things to our law firm. First he said show me some authority
where a Texas court has disregarded a choice of law provision and applied the law of the state. We
got that case for him it was done by the Houston court of appeals. In that case the court disregarded
the choice of law provisions for Louisiana and applied Texas law ruling Texas law had more to do
with the parties than the law of Louisiana. That sound familiar you have Gamecom Texas
corporation you got ETPI headquartered in Texas, you got Ferris doing business in Texas, you have
the agreement negotiated in Texas and in Delaware you have a couple of companies that are
incorporated there but don't do business there. What state has more to do with the transaction
Texas or Delaware? Second of all and this is were in my opinion ETPI intentionally mislead people.
The judge said I am going to rule that Delaware law applies but Mr. Harwell you haven't sited any
Delaware law that supports your cause of action and that is why we are filing it is called special
exceptions Summary Judgement and even if you apply Delaware law they don't have any law under
the state of Delaware that gives them the coverage they seek. Now that says nothing to the fact we
have witnesses that will show that the CEO of ETPI on several occasions told Bob Ferris that we
don't think we can do your deal. We will have evidence that ETPI has defaulted on promissory notes
that it owes Ferris so even if we have to get to the merits of the case and we don't think we will we
are extremely confident that we are going to win.
I asked - Are you going to file a claim regarding the promissory notes ETPI defaulted on?
That counterclaim has already been filed. It is called Ferris' counterclaim against ETPI. Here is ETPI
claiming that Ferris is not negotiating in good faith and ETPI doesn't bother to pay its promissory
notes it owes Ferris. So there is a whole lot more to this than ETPI wins Summary Judgement and
all the judge has ruled is that for right now I am going to apply Delaware law that's it.
I asked - Do you have a figure on the Float after the merger is complete?
Well the Float is not going to change Greg. The Float has increased by 775,000 shares as shown in
the S8 but that is the beauty of the Ferris side and the commitment that the Ferris shareholders
have made to the future of the combined company is that all the shares are restricted. I will point out
that the vast majority of those shares are insider shares anyway so even after the one year holding
period you are subject to the leak out rules that all of us as insiders are subject to.
I asked - What about the shares you planned on redeeming have you redeemed them yet?
Those shares have not yet been redeemed and frankly we just didn't get it done and that is another
reason that the shares that are eligible to vote is about 775,000 shares higher. Accounting wise at
the suggestion of our CPA we have taken those shares out because for Accounting purposes they
have been redeemed and our obligation to pay for those is on the books. That is why our Accounting
numbers filed with the SEC did not show those redeemed shares but we haven't actually redeemed
them yet. They still show on our transfer agents records so upon the advice of our securities
counsel we felt it best to go ahead and include those for the purpose of this meeting which I point out
made it harder to get to our numbers anyway.
I asked - Can you give an update on the Projects Ferris recently completed?
Lance - The US ski team project we did for Chevrolet is scheduled to leave a week from Monday
from Detroit and it has a schedule of 60 cities that it is going to hit.
I saw a small clip of this Ski jump experience and was very impressed with the graphics and
scenes. There wasn't a headset attached to the video so I couldn't get the full experience.
Lance - The Red Baron one is due to go out the end of October for their tour. We are in the final
process now for both of them for doing what we call our scan/conversion of taking it from film to
digitizing it and then actually loading it into the hardware platform. We installed the platforms last
week for Chevrolet. We are installing Red Barons equipment next week.
I saw the raw film footage of the Red Baron squadron experience and was impressed with the detail
of the images and all the scenes. There wasn't a headset attached to the video so I couldn't get the
full experience.
I did get the full experience of the Buick LeSabre experience and was very impressed with the
motion tracking in the headset. I shook my head to test it and it was very responsive. The level of
detail was also impressive. I could turn my head and see the back of the car and I could even see
ole Ben through the rear view mirror and when you turn around he talks to you. There was also
smells of free cut grass and roasted chestnuts coming from a vendor cart outside Central Park.
