Exten Industries (fka BB: EXTI)

[Patricia_1]

Email from Szabo re Form 4 and shares
Questions from poster and answer 12/3/03

By: rickj_65
03 Dec 2003, 10:14 PM EST
Msg. 18209 of 18211
(This msg. is a reply to 18106 by stillpursuing.)
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Stillpursuing

My last post on the issue as well.

Dear Mr. Szabo,
While I am very happy to read the PR today about insider's exercising and purchasing options, I am confused and concerned as to how the recent SEC Form 4 transactions have been filed if they are to reflect the transactions referred to in the PR.
Previously you had e-mailed me stating that many of the Form 4 stock acquisitions are not actual purchases, but they are stock issued to officers in lieu of cash for services rendered. Operating on your e-mail clarification, the stipulations in the 10K regarding officer compensation, the Form 4s themselves, and my knowledge of how Form 4s are filled out, I assumed that Mr. Newmin's recent transactions were also for services rendered in lieu of cash. Based on this information, I maintained a strong opinion on Raging Bull that these transactions were not purchases or options conversions, but they were stock compensation for services rendered. I know some of the transactions were compensation, but I'm confused as to the nature of the other transactions and am particularly concerned that the SEC Form 4s may not be filled out correctly.
According to the SEC Filing rules Form 4, Page 11 Section 4:
"4. Transactions and Holdings Required to be Reported.
(3) All exercises and conversions of derivative securities, regardless of whether
exempt from Section 16(b) of the Exchange Act. Every transaction must be reported even though acquisitions and dispositions are equal. Report total beneficial ownership following the reported transaction(s) for each class of securities in which a transaction was reported."

My questions are as follows:

1) The 11/25 transaction by Mr. Newmin for 636,909 shares with a purchase price of $.10 appear to be either an option conversion or a conversion of convertible debt into shares of stock. If it is a conversion of options, then why wasn't the section Table II (Derivatives) filled out to represent the derivatives conversion?
2) Similarly, the 11/27 transaction by Mr. Newmin for 250,000 shares appears to be an option conversion due to the $.21 share price and subsequent sale of 250,000 shares. Again, if it is a conversion of options, why wasn't Table II Derivatives filled out?
3) What is the nature of the 11/27 transaction by Mr. Newmin for 786,000 shares acquired at $.15? Is this stock acquired from convertible debt?
4) In reference to the transactions stated in your PR today, are there further SEC Form 4's that need to be filed?
I would greatly appreciate your response as I would like to clear up some misinterpretations made both on my part as well as others on the Raging Bull thread. Thank you very much for your time and attention to this.

And his response today:

Mr. *****, we work closely with our SEC attorney to be certain we comply with all rules. Although I don’t remember prior communication, it is a fact that the board, Mr. Newmin, and myself receive stock for all or part of our compensation. Mr Newmin receives, and has never received, any cash for the services he has provided to Exten and its shareholders. He receives periodic stock. These transactions are ALL reported. With reference to the conversions, we report on Form 4 when we receive the stock, not when we agree to convert. I, for example, just received my certificate for the $59,178 loan that I converted. Greg Szabo

Stillpursuing...

When I said I would get back to you, it was because I was awaiting Greg Szabo's response before closing the issue as I still had some unresolved issues (which are still unresolved) and also because I had addressed you separately in my previous attacks to you I wanted to address you separately here. I did not mean to imply any further escalation and it is regretful that you had interpreted it that way.

Egotistical needs notwithstanding, I have no problem with being or admitting when I'm wrong (it certainly happens enough for me to be comfortable with it). However, when you go to the great lengths of due diligence that I often do to get to the truth and have a significant amount of comfort and confidence in that due diligence, it is that same confidence that is not easily shaken. Unfortunately, that degree of confidence can brim into frustration and condescension when challenged.

Ultimately, my research and due diligence regarding the insider transactions proved to be wrong and your assertions regarding the buying and accumulating were correct. The Form 4s in question do not provide the appropriate level of detail to describe the transactions that were clarified in the PR and that is why I wrote Mr. Szabo. The fact that a document which is supposed to be a tool for accurately and verifiably reporting transactions between the company, it's shareholders and the SEC can be interpreted more than one way with a degree of finality is a problem (beyond EXTI) as our vociferous exchanges can attest to. However, I will leave that issue for the company's SEC attorney to grapple with and hope that future Form 4s are clearer for the benefit of all parties involved.

For years I have willingly shared my DD on these boards in an effort to cut through the BS that plagues them in order to help those investors that don't have the time, the patience, nor the resources, but have the same goals. The irony that bothers me is that the attitude and condescension in my posts to you and MyDogBuster are not only an embarrassment, but they are counter-productive to the reasons I post in the first place. I am truly sorry to you and to other posters on this thread who had to read it. I also apologize for discrediting you and implying that you were a hypster. Obviously you are also trying to help investors out with your own perspectives and due diligence. Best of luck moving forward and upward.

My apologies,

Rick

PS - I find it encouraging that the company clarified the insider transactions for everyone via PR. First of all, it shuts up people like me. Secondly, if it were harmfully dilutive, we would've never seen a PR. And more importantly, it clarifies the detail that is not immediately discernable in the SEC filings. I'm not sure how many companies actually do that. I do give this management team an A+.

http://ragingbull.lycos.com/mboard/boards.cgi?board=EXTI&read=18209