Unfortunately I see a lot of patterns here as I do in NVEI. Also unfortunately I believed their company line and lost many $$$. So when I see something like this red flags go up.
A lot to go over in the report.
Main part is below.
One thing I did notice is the last paragraph asks the company to make a statement which they decided not to.
That's not a good sign imo.
http://www.our-street.com/featured.htm
OUR COMPLAINT
Sometimes a story almost too strange to the point where you wonder how people believe it to begin with. Such is the case with the Kovar family's latest venture, Skyway Communications Holdings, Inc.
Here is a family that has been working different versions of the same type story with the public since at least 1996 and still seems to be able to find willing believers. The premise is simple. "Invent" a product with remarkable capabilities. Also invent a great story to go along with the "product" and be really good at telling the press and others about it so you can convince others to invest in you and the product. (Keep in mind, when we say "invent" we mean that in the broadest terms possible). Keep this up as long as you can and make sure you pay yourself and your family well along the way. When the story falls apart, invent a new product or recycle the old one in a different package and repeat the process.
The head of this family, Papa Glenn Kovar's history as a man who makes materially false and/or misleading statements to get what he wants goes back even further beginning with his lies on a job application to get a position with a Redevelopment Agency from which he was subsequently fired when the lies were exposed.
Actually, our story starts in the late 1980's. Around that time Glen was getting fired for his "creative resume" work. Also around the same time another apparent turning point for the Kovar family occurred. Glenn tells you of a poignant father/son moment aboard a sail boat in 1987 in the Virgin Islands, where Glenn and Brent began wondering about the opportunities in the satellite and related businesses. We don't know if this moment came before or after Glen was fired from the Redevelopment Agency but with Glenn being out of work and fresh from this magical moment, Glen and Brent experienced the genesis, the inspiration for their first recorded commercial father and son project, Satellite Access Systems (SAS).
This is the first evidence we have of Brent and his dad teaming up on a project. Now, when it comes to getting caught in a lie as Glenn did, some people learn their lessons and change or even commit themselves to atoning for their past mistakes while others just keep on keeping on. That appears to be the case with Glenn because his misstatements didn't stop after the resume lie/firing incident. There are so many misstatements in the article about his formation of SAS that we are reluctant to list them all on this page. Instead, we have listed some as additions to the article itself.
Tampa Bay Business Journal article
Although Glenn credits Brent with being the "genius", it is obvious where Brent got his education when it comes to outrageous promotional claims. We can see this in their first venture together, Satellite Access Systems. Although Glenn is the one taking the lead in the news story and bragging about their mysterious "black box", Brent, at age 29 does "yeoman's duty" in helping carry the promotional load by making his own grandiose claims. For example, when Glenn tossed up the claim that they just were signing a contract with an AOL subsidiary, Brent hit it over the fence by adding that the contract could "blossom into well over $500 million."
It was only after realizing how badly he had been scammed, that the reporter who wrote the initial SAS story came back and filed a follow up story not only on Glenn's resume problems but on several of the other lies told to him as well.
It isn't often you see a follow up story by a reporter where the reporter actually goes back and attempts to correct a snow job he had gotten previously. We commend the reporter on his vigilance and note this must have been a better than average snow job to cause this kind of reaction.
From here we don't find much on the Kovar's and their so called "black box" technology and inch wide satellite dishes until two and a half years later in April 1999, when Corsaire Snowboard Inc announced the acquisition of SAS and the changing of their name to Net Command Tech, Inc. (OTCBB: NCDT now pink sheets). Here is what they thought they were acquiring.
According to NCDT, the Kovars were involved in the "development of ultra high speed satellite and Internet communications for the transmission of voice, date and video signals; technology"
Somehow the Kovar's managed to talk the folks controlling NCDT out of about $3 million in cash in addition to debt assumption and a bunch of stock without ever confirming the existence or effectiveness of their alleged technology.
Were not quite sure how these things happen but we got this information from NCDT SEC filings (see link below). We find additional credibility in these particular disclosures due to the fact that about 60 days after the announcement of the SAS acquisition and right about the same time as the acquisition of SAS was closing, the SEC stepped in and suspended trading in NCDT stock while requesting information on, among other things, their recent acquisitions and claims surrounding the acquired company's technology and claimed income.
There are some pretty troubling claims in these filings and we suggest anyone with an interest in Skyway Communications, read this information thoroughly.
NCDT FILING
Here is just a sample of what you are going to find.
"However, SAS had not successfully delivered contracted services or technologies under these contracts. In addition, as discussed in Note 9, substantially all counterparties to SAS's contracts have made claims for return of the customers' advance deposits and other damages."
Bottom line here is simple; amazing claims about technologies were made but not delivered by Glenn Kovar and Brent Kovar while sucking money out of the investor's pockets.
Fast forward again to today and the latest venture of the Kovar family, Skyway Communications Holdings. Through this company and its subsidiaries, they are once again promoting some amazing technology with outrageous claims both in their press releases and on their website and people are buying the story. Here are some of the claims:
"While all commercial airlines currently provide some limited In-Flight Entertainment (IFE) and communication services, these systems currently rely on data transfer systems that are inferior in reliability and speed when compared to Sky Way Aircraft’s system. Sky Way Aircraft has the ability to provide data link technology that will dramatically increase IFE connection speed and capability."
BUT WAIT!
In their most recent 10Q filed on March 16, 2004 they clearly state, All of our products and services are in the development stage and will require additional testing.
The obvious question here is
How can these two statements exist when referring to one technology?
It appears to us that Skyway simply hopes to someday have the ability to provide these services.
And
How in the world can they claim superior reliability when they haven't even finished installing the first working model which will decide if the technology even works? This it a total fabrication.. a lie... a deception.. a con... "masculine bovine exhaust" at its best.
Section 10b-5 of the Exchange Act prohibits a person from making materially false and/or misleading statements in relation to the sale of stock and we believe that SWYC's claims on their website as stated above are clearly false and/or misleading.
We have another problem with Kovar's claims about his technology. This has to do with how he describes it in his SEC filings. In his most recent 10Q, Kovar refers to his technology this way.
"Sky Way Aircraft, a division of Sky Way Communications Holding Corp. was formed to utilize now-patented wireless data transmission software technology developed by Mr. Brent Kovar, our President. This technology is a software program for data indexing, which is similar to data compression but which mitigates data loss problems associated with compression. This technology permits faster and less expensive transmission of data, video, voice and audio between the ground and an airplane or other homeland security related ground locations than using traditional, non-indexed data transmission mechanisms"
However, when we look at the patent itself, the first sentence of the abstract clearly says,
"A system for increasing the transmission bandwidth of a terrestrial digital network". Additionally, the patent says nothing at all about cost effectiveness. More masculine bovine exhaust!
Again we find contradictions between representation and fact. And for those who might want to say, "but the technology can be used for wireless", we say SO WHAT? Disclosure is about accuracy and truth and the truth is that Brent Kovar's patent, IF IT EVEN WORKS, was designed for terrestrial digital networks. In his patent, Kovar even goes futher to make the distinction between satellite and wireless transmissions and the more traditional "terrestrial networks" such as phone lines.
Given this fact, how can Kovar then file a disclosure document with the SEC and call his technology a "wireless data transmission software technology"?
It is a violation of Securities Law to knowingly file false information with the SEC and, in our opinion, the claim that Brent's patent is for wireless data transmission software, is materially false and/or misleading.
Basically, this is what we see going on with the "technology". The Kovars, through SWYC, have acquired the old AT&T in-flight tower phone system for the US. This is the system that AT&T essentially abandoned when it got out of the in-flight phone business. Now, they are attempting to upgrade this system to support their claim of being able to transmit data at a rate of 15,000,000 bits per second". According to their own charts, the system they acquired from AT&T, an "in flight phone system" was only equipped to transmit data at a rate of 2,400 bits per second. Skyway does not disclose exactly what is required to upgrade their system from 2,400 bps to 15,000,000 bps but we think this is the kind of information that should be clearly and fully disclosed both in terms of cost and time.
This use of bits per second alone is quite misleading, in our opinion. The industry simply doesn't measure data transmission in bits per second anymore. A bit is the smallest form of data one can transmit. Data transmission today is measured in terms of kilobits, megabits per second (Mbps) and not bits per second.
Accordingly, the data transmission rate being claimed by Skyway is 15 Mbps or 15 Megabits per second. By comparison a typical T1 internet connection transfers data at a rate of around 1.5 Mbps. So, according to Skyway, they have developed their own technology for transmitting data back and forth between an airplane and a ground tower about 10 times faster than a T1 connection by using their software designed for terrestrial network systems and not by using other state of the art compression technologies or hardware thus allowing them that speed on both the up and down link.
Given the historical facts of the Satellite Access Systems promotion and eventual demise added to the apparent inconsistencies already in evidence, we find Mr. Kovar's latest claims about this technology to be highly questionable at best. We have written the company and asked for some documentation of their claims and have not received a reply. We will advise you if we get any additional information.
Adding to our concerns regarding the technology and the credibility of the Kovars and Skyway Communications, is evidence we are receiving regarding the relationship between Southeast Airlines and Skyway. According to Skyway, Southeast Airlines initially entered into a Letter of Intent in July and then
"signed a SkyWay in-flight system contract for a wide variety of in-flight services. Under the contract, Southeast Airlines shall receive, on a reoccurring basis, a percentage of the revenue generated by advertising and in-flight service usage of the system. Terms of the contract call for the installation of the Upgraded SkyWay in-flight system on the fleet of Southeast Airlines eight (8) MD-80 and DC-9 aircraft."
This understanding is not shared by Scott Bacon, a VP for Southeast Airlines. According to reliable sources who have spoken with Mr. Bacon, there is no formal contract with Skyway Communications or any of its subsidiaries. According to Mr. Bacon,
1. There is no "formal contract" with Skyway Communications or any subsidiary.
2. They do have what amounts to an agreement that is more like a letter of intent based upon numerous conditions gs, among them
a. Proof that the technology works
b. All required FAA certifications
c. Inspection and working demonstration of a fully installed and complete working model
3. Once Southeast has had an opportunity to see the product in action and can confirm its functionality and that both the airplane and Skyway have the proper certifications from the FAA, then they will "look at it" to determine if they want it.
4. It is way too early in the process to determine if anything will come from the relationship.
5. In the interim Southeast continues to investigate other options including but not limited to the Verizon technology which uses existing installed hardware. They also have been in discussion with other airlines. This is an active subject of investigation for Southeast out of a commitment to be competitive while Skyway continues to fail to deliver requested documentation.
Recent developments also concern us. We called Southeast Airlines to personally speak further with Mr. Bacon about this subject and were told by the operator at Southeast that Skyway had called and instructed her to refer any further calls regarding their relationship with Southeast Airlines to Steve Kline, the IR representative for Skyway. We find this action both troubling and inappropriate. We have written Mr. Bacon and asked him to comment and will let you know if he replies.
ADVERTISING CONTRACTS?
We also have serious concerns about the accuracy of certain press releases referring to advertising contracts between Skyway and commercial organizations in the Florida area.
On October 2, 2003, Skyway issued a press release announcing that
"SkyWay Communications Holding Corp. its wholly owned subsidiary, Sky Way Aircraft Inc., and Mavilo Jewelry Company of Tampa, Fl. announces their new Southeast Airlines 12 week In-Flight advertising contract valued at $75,000. The contract is scheduled to commence Spring 2004.
As previously announced in the original press release of August 29, 2003, SkyWay and Southeast Airlines signed an in-flight services contract whereby SkyWay would provide a wide variety of in-flight services to Southeast Airlines. A significant part of these services were the advertising of local Tampa Bay and other businesses and info-commercials that would be tailored to specific destinations of the Southeast Airlines flight schedule. The contract with Mavilo Jewelry Company, an import diamond and fine jewelry company located in Tampa, provides for a 12 week ad coverage on Southeast Airlines scheduled flights, between St. Petersburg., Ft. Lauderdale, and Orlando, Fl. Allentown, Pa, Newburg, NY, and Newark, NJ.
We contacted Mavilo Wholesalers in Tampa Florida, a respected jewelry company and asked them to confirm the contract with Sky Way Aircraft. When we informed the receptionist we needed to talk to someone who would know about advertising contracts, we were put in touch with Maria in their business office. We introduced ourselves and told her we were researching Skyway Aircraft and Skyway Communications and wanted to confirm the existence of an advertising contract between Mavilo and Skyway and she replied
"I’ve never heard of them."
Question; You’ve never heard of them?
Answer; "If we had, I would know about it."
Question: You would think if it was for $75,000…..
Answer: "[Laughs] – Yeah, I think I would know about it."
We also looked at the two press releases regarding contracts with automobile dealerships. One claims that Dew Cadillac entered into an advertising contract valued at over $200,000 and the other claimed to have made a deal with a West/Central Florida Bentley dealership. Surprisingly enough Dew Cadillac is a part of the Dimmitt Luxury Automobile Group as is Dimmitt Cadillac, the only Bentley dealer in West/Central Florida.
We have spoken with both the marketing department for Dimmit Luxury Automobile Group and with the General Manager of Dew Cadillac. Originally, Tracy Peterson, in the marketing department, indicated "I can't confirm this..... We're not doing anything like that". We offered to send her a link to the press release and she confirmed her willingness to follow up her statements with an email. We subsequently received an email from her referring us instead to Scott Larguier, the General Manager of Dew Cadillac.
We then spoke with Scott at Dew Cadillac and he refused to comment any further indicating that they were not in the habit of discussing their advertising relationships and weren't familiar with Our-Street.com. When we explained to them that Skyway stock was being publicly promoted using the Dew name already as well as the $200,000 figure, he didn't feel this was sufficient to change his mind. We then invited him to visit our website and to review the work we do and then decide further if he wanted to provide more information. To date, we have not heard further from him. We can only hope that, should the SEC inquire of them, that they will have more success with Dew Cadillac than we did.
We think it is important to note here that these press releases announce contracts "valued at" various figures. This should indicate the value to Skyway but understanding deceptive promotional tactics, we are fully aware of the fact that this can also be used to describe the value to the advertising customer as in "we can let you have this advertising package valued at over $200,000 today for the incredibly low price of only $xxx". Who of us haven't had the opportunity to purchase something from a TV pitchman that represents an $820 value for only $69.95?
Time alone will tell us what the actual truth is with deal with Dew Cadillac and the Dimmitt Luxury Automobile Group but as far as we are concerned, we are terribly disappointed in the Dimmitt group because, in the world of stock promotions, if you are involved as Dew Cadillac is, and you aren't part of the solution, you are part of the problem. We would expect this from an old style bait and switch Motor's Holding type store from the 70's but not a Cadillac and Bentley dealership. Oh, well.. no accounting for ethics.
Now for something really stupid!
(And really, really wrong too!)
In our opinion, Brent Kovar holds the investing public in very low regard. In fact, we get the feeling he thinks most of you are total idiots. We have reached this conclusion based upon a picture Brent has added to the monitoring page of his technology overview page. Here he has added a picture of a high-tech room full of monitors and work stations. On the wall of this obviously state of the art looking room, in the center of all the monitors, is the Skyway Aircraft Logo.
It doesn't take a rocket scientist to see that this logo has been added to this picture to give the false impression this is a Skyway Aircraft facility. This is both outrageous and insulting and we believe this is the kind of dishonest practice that deserves swift and harsh SEC action.
NAME THAT ROOM -
Now you too can be a Junior Detective and help Our-Street.com find out exactly what kind of room this is. We notice to the right of the logo is a map of Florida and some weather data so it looks like a Doppler radar screen but we just don't know. Can you find this room somewhere else on the net? Do you recognize exactly what this room is actually used for? If so, please let us know. Write us at info@our-street.com and help us "name that room". Help us solve this and, if we had a secret decoder ring we would send one to you.. but we don't. You will have to settle for our gratitude and that of others who want to know as well and you will know you helped us take back our street, plus, if you want, we will post your name right here as a champion internet detective.
TO STC OR NOT TO STC. THAT IS THE QUESTION!
The March 2004 issue of Avionics Magazine it is reported that
"The aircraft itself will serve as a technology demonstrator and test bed. The systems on the DC-9-15, as of early February, were in the supplemental type certificate (STC) approval process."
We have been further informed by the company's IR person that the DC9 is in Chicago at DuPage Airport and that the system is being installed by Scott Aviation. So we checked with the Aircraft Certification Office at the Chicago office of the FAA since that is the normal place where an STC for the plane would be handled. As of March 29, 2004, the FAA representative called us back after checking all the records and informed Our-Street.com that
"there is not any current Sky Way Aircraft STC projects in this office"
In fact the man we talked to at the FAA hadn't even heard of Sky Way Aircraft or Skyway Communications. We figured that if anyone in the FAA knew about Sky Way Aircraft or Skyway Communications or the Kovars, it would be the Tampa FSDO office of the FAA so we called them as well. They informed us that they had never heard of Sky Way either and further, that neither Sky Way Aircraft nor Skyway Communications had applied for or been granted any FAA licenses either.
We also asked about an STC under the other Registered owner of the plane Royal Sons Motor Yacht Sales, Inc.
Now maybe there is an STC application somewhere in some other name but frankly, we doubt it very much. We invite the Kovar's to provide the proof of an ongoing application and we will gladly publish it here.
For those of you who aren't familiar with the STC process, the first step is to file a Certification Plan. This informs the FAA of what you intend to do. You can't even start work without that plan being filed and approved.
We also spoke with the FSDO office of the FAA in Tampa, Skyway's nearest office and the gentleman there, who handles the certification of companies hadn't even heard of Skyway or the Kovars either.
BUGGY WHIPS ANYONE?
In 2002 Claircom Communications, a division of AT&T shut down their InFlight phone service. It wasn't profitable, it wasn't going to be profitable and previous attempts to sell the system had failed. This left Verizon as the only other Air to Ground company providing in flight phone service the old fashioned way, with land based towers instead of satellites.
In steps a white knight, Skyway Communications and they get the deal of the century, or so it might seem. They bought the entire 10+ year old system, including the broadcasting hardware for a cool million. Was this because no one else knew about it? Hardly, the fact Claircom was trying to dump this property was common knowledge in the airline and communications industry.
We are being led to believe that the reason the system didn't make sense to anyone else in the industry is that Brent Kovar and Skyway Communications Holdings has been sitting on a technology so advanced that it will allow the Clarion tower/communication system to transmit data in both directions ten times faster than land based broadband internet systems and what's more, he has been sitting on this unique software technology since 2000 without finding a single profitable commercial outlet for it to date.
Further, Brent is asking us to accept his claim that this technology will not only support high speed internet access on commercial aircraft, he also is asking us to accept his claim that their web cams and other aircraft monitoring technology will prove valuable to both airlines and governments in the quest for homeland security.
Of course to accomplish this task we have to suspend our concern for the fact that this technology, (assuming it even works at all in the first place), will be limited to the US and some limited parts of the Caribbean and Canada so it would have no practical value to any airlines that have need for technology which is international in scope. Without the use of the latest ground-to-air satellite based technologies, Skyway's system will be useless as soon as the plane leaves US airspace and the range of the coastal towers. This automatically eliminates all the international carriers.
Of course, this also calls into question the logic behind ramping up the towers in Alaska and Hawaii since the system would go dark en-route. We could also get into discussions about compatible systems and how Skyway intends to integrate their airlines and systems with the major airlines who will all be forced to use competing systems that feature the latest in leading-edge, state-of-the-art equipment and global satellite communications technology instead of surplus towers and equipment purchased from a now defunct company.
In case you didn't know it, Transdigital Communications Corporation, the company SWYC just announced buying some equipment from, is out of business. Phones at their listed phone number are disconnected and their website is down and has been for some time. We aren't quite yet sure what happened but if you look at their former website you will see that they never really got beyond the "we're putting our website together" stage.
Also, since international flights are the ones that are the primary focus of terrorist watches, having facial recognition software installed only on airlines and planes that will be limited to domestic flights would seem a little irrelevant.
We are doing our best here not to get really sarcastic but come on now. Are you getting a clue here?
Competition Anyone?
Just so no one thinks that the Kovar's have a lock on the high speed air to ground communication/internet business out there, there are a few other players on the scene. Granted, none make the claim of 15Mbps of two way data transmission like Skyway does and none of the serious players have the advantage of a once mothballed network of ground based antennae that Skyway does either. Lacking the distinct qualities of a "US and limited areas of Canada and the Caribbean only" ground based antenna system these companies are forced to resort to other methods of air to ground data transmission like leading-edge, state-of-the-art, global satellite systems.
Of course, being well funded companies, they have managed to get a jump on Skyway. One example is the Boeing Connexion who, although they don't have the Southeast Airlines letter of intent contingent on just about everything including the apparent "if it works and we decide we like it and haven't found something better in the interim" clause, they do have Boeing behind them.
It is our understanding that Boeing does have some involvement in the manufacture and sales of commercial airplanes and, even though they don't operate their own airline, we suspect they can perhaps influence the kind of systems which are installed in some fleets anyway. Perhaps that is why the Boeing Connexion has already concluded in flight trans atlantic testing and is launching their system using Lufthansa Airlines as their initial launch airline.
NOTE: The chart displayed by Skyway showing their connection speeds is misrepresented. The initial trans-Atlantic test run, according to articles had a downloaded speed of 3 Mbps and an upload speed of 128kps. This initial test download speed surpasses what Skyway indicates on their comparison chart and according to Boeing Connexion, their download speed now is at 20 Mbps, surpassing Skyway's claimed download speed by 33%. Boeing Connexion's upload speed is currently at about 1 Mbps.
IF YOU ARE GOING TO MAKE COMPARISON CHARTS, AT LEAST GET THE INFORMATION RIGHT. DON'T MISREPRESENT THE COMPETITION TO MAKE YOURSELF LOOK BETTER THAN YOU REALLY ARE!
Another player in the field is a Bothell, Washington company called Matsushita Avionics Systems. Matsushita is a bit of a newcomer to the Avionics business having only entered this field in 1979. Fortunately they did have some previous experience in electronics having originated in Japan about a century ago and establishing a name for themselves in electronics. Among other ventures they established and still control the Panasonic product line. They already supply systems to airlines and are offering upgrades to their latest systems that include internet access in addition to other features. Of course, Matsushita is also stuck with that leading-edge state-of-the-art, global satellite based communication system instead of Skyway's 10+ year old revived, ground based, geographically limited system so there is no telling how they are going to compete against Skyway once (and if) Skyway ever gets their system installed, working as represented, and certified by the FAA.
Of course Skyway will have the edge, they claim, because they will be offering the systems for free to the airline and the internet free to the customer and making their money on forced advertising. Despite the fact this model has yet to be successful over the long haul, as far as we know except in the area of mass media, Skyway has offered to prove the critics wrong and backs it up with presales of high value advertising contracts to the likes of Dew Cadillac, Dimmitt Bentley and others commercial establishments in Florida.... or do those contracts really exist after all and are they for cash in the amounts represented??? Looks like a bunch of smoke and mirrors to us based upon what we have been told.
DID YOU KNOW THAT BRENT FAILED AT AN IPO ATTEMPT BEFORE SWITCHING TO A SHELL MERGER?
We find it interesting too that the Kovar's initially attempted to take Sky Way Aircraft, Inc public before finally giving up and taking the easy way to the market with the reverse merger into a shell. Now, in our opinion, there is nothing wrong with a shell merger but we get concerned when a company, or more appropriately, the people involved with a company, can't get an IPO through the SEC then quit trying and resort to merging into a shell where the SEC has less to say and less opportunity to ask questions. Remember, the key to getting an IPO through the SEC is thorough and accurate disclosure. They don't conduct a merit review to determine if they like the business. They simply want you to explain the business and the corporate structure completely and accurately.
If you can't get your IPO cleared, there is definitely something wrong. Aside from not answering the SEC's questions fully and accurately, there aren't too many reasons why you might not get cleared. We have heard that another source of difficulty can sometimes come (unofficially) from being someone the SEC would prefer wasn't running a public company. In the past the SEC has been accused of "bed-bugging" registrations (not responding in a timely fashion) or of simply issuing comment letter after comment letter no matter how well you responded to the previous ones. Given that registrations are reviewed in a subjective fashion by people with more files on their desk than they should have, both are certainly possible and we don't even fault them for employing such tactics if it protects the market. In the case of Sky Way Aircraft, we have no idea whatsoever why they quit trying but what we do know for certain is that they filed their initial SB-2 in July 2002 and subsequently filed 4 amended registration statements over the next 8 months then quit trying and filed a formal notice to abandon the registration in May 2003 just before sliding into the shell and starting trading.
*Preferred shares
The Series A and Series B Preferred, which represent 300,000,000 common shares currently are convertible into common. Although both Series initially had milestones that had to be reached prior to conversion, the most recent 10Q has eliminated any discussion of their conversion into common which suggests they can be converted at any time with no additional payment. The Series B is still convertible upon certain events that may never occur. Those events are 1. The completion of a successful IPO in the amount of $25 Million. 2. A minimum closing price of $4 per share for 30 days (adjusted for splits, acquisitions etc) or 3. the successful launch of their product (definitive agreements with three (3) nationally recognized airlines to provide its Products and Services; (ii) to have an operational network capable of providing its Products and Services throughout the United States; and (iii) an operational ground base data center.
Based upon available information, we do not consider the agreement with Southeast Airlines a "definitive agreement" however, management may disagree. Further, it is important to keep in mind that conversion terms of convertible preferred shares can be changed and since the Kovars have voting power equal to the converted shares, they control this company with absolute power.
We believe, their disclosure in SEC filings is woefully inadequate considering the level of potential dilution and the voting control they hold. We also find no evidence that the Kovars, with their overwhelming control of the voting power of the corporation, are prohibited from modifying the conversion terms to suit themselves.
Although the Kovars do disclose the terms of the convertible preferred in their SEC filings, we feel they do not disclose this adequately and that this failure also represents a violations of Section 13 of the Exchange Act as a material omission.
ALMOST TOO STUPID TO EVEN MENTION.
We sometimes marvel at the hubris and gall of people sometimes and this time is no exception. Brent published this amazing sounding announcement in August of last year.
SkyWay Communications Holding Corp Announces Congressman and Republican Majority Leader Tom Delay's Appointment of Brent C. Kovar, President of SkyWay, to the National Republican Congressional Committee Business Advisory Council
HONESTLY, HOW STUPID DOES THIS GUY THINK YOU ARE? First he doctors the picture to make you think that is his monitoring room or something then this!! This is nothing more than a simply fund raising tactic on behalf of the Republican party. They cold call people and get them to contribute a few hundred dollars then name you to this Business Advisory Council. Nothing wrong with doing it but any company that uses is to promote their stock is, in our opinion, up to no good!
A little more on the subject
Even a little more
ENOUGH SAID!
SUMMARY
Give us a break here!! We have here a family with proven lack of credibility running this company and paying themselves generous salaries ($175,000 annually to Brent). We have here a family that either currently is or almost certainly was under SEC examination with the Net Command Tech/SAS matter and yet, in our opinion, continues to act so as to deceive the investing public to get where they want to go.
We have here a software technology that has not been proven or confirmed by any reputable independent source that we can find.
We have a company that is issuing shares at a rate even Our-Street.com finds hard to comprehend. In the past 3 quarters, we have seen the issued and outstanding go from 57,200,000 on July 7, 2003 to 70,200,000 on October 31, 2003 and 124,701,669 on March 9, 2004 and all this dilution was without benefit of an acquisition. That means that the Kovar's are issuing stock at an average rate of 204,893 per day. Of course, all this stock has nothing to do with the 351,998,000 shares represented by existing convertible preferred shares.
Finally, we have here a company that has mislead the markets about the value and nature of existing contracts of clients on both sides of this business equation.
In our opinion, if the Kovars aren't stopped here, they will continue to use the public markets and trusting investors as their personal ATM machine without consideration or concern for shareholder value, honesty, disclosure, or ethics.
As always, we will gladly provide a forum for any documented and verifiable comments by the company and will promptly and sincerely apologize for any errors in our facts. Our commitment is to bring forth the truth and the facts in the matter and we encourage Skyway Communications Holdings to produce whatever documents they can to clear up our concerns and the concerns of what we assume are many SWYC shareholders.
A lot to go over in the report.
Main part is below.
One thing I did notice is the last paragraph asks the company to make a statement which they decided not to.
That's not a good sign imo.
http://www.our-street.com/featured.htm
OUR COMPLAINT
Sometimes a story almost too strange to the point where you wonder how people believe it to begin with. Such is the case with the Kovar family's latest venture, Skyway Communications Holdings, Inc.
Here is a family that has been working different versions of the same type story with the public since at least 1996 and still seems to be able to find willing believers. The premise is simple. "Invent" a product with remarkable capabilities. Also invent a great story to go along with the "product" and be really good at telling the press and others about it so you can convince others to invest in you and the product. (Keep in mind, when we say "invent" we mean that in the broadest terms possible). Keep this up as long as you can and make sure you pay yourself and your family well along the way. When the story falls apart, invent a new product or recycle the old one in a different package and repeat the process.
The head of this family, Papa Glenn Kovar's history as a man who makes materially false and/or misleading statements to get what he wants goes back even further beginning with his lies on a job application to get a position with a Redevelopment Agency from which he was subsequently fired when the lies were exposed.
Actually, our story starts in the late 1980's. Around that time Glen was getting fired for his "creative resume" work. Also around the same time another apparent turning point for the Kovar family occurred. Glenn tells you of a poignant father/son moment aboard a sail boat in 1987 in the Virgin Islands, where Glenn and Brent began wondering about the opportunities in the satellite and related businesses. We don't know if this moment came before or after Glen was fired from the Redevelopment Agency but with Glenn being out of work and fresh from this magical moment, Glen and Brent experienced the genesis, the inspiration for their first recorded commercial father and son project, Satellite Access Systems (SAS).
This is the first evidence we have of Brent and his dad teaming up on a project. Now, when it comes to getting caught in a lie as Glenn did, some people learn their lessons and change or even commit themselves to atoning for their past mistakes while others just keep on keeping on. That appears to be the case with Glenn because his misstatements didn't stop after the resume lie/firing incident. There are so many misstatements in the article about his formation of SAS that we are reluctant to list them all on this page. Instead, we have listed some as additions to the article itself.
Tampa Bay Business Journal article
Although Glenn credits Brent with being the "genius", it is obvious where Brent got his education when it comes to outrageous promotional claims. We can see this in their first venture together, Satellite Access Systems. Although Glenn is the one taking the lead in the news story and bragging about their mysterious "black box", Brent, at age 29 does "yeoman's duty" in helping carry the promotional load by making his own grandiose claims. For example, when Glenn tossed up the claim that they just were signing a contract with an AOL subsidiary, Brent hit it over the fence by adding that the contract could "blossom into well over $500 million."
It was only after realizing how badly he had been scammed, that the reporter who wrote the initial SAS story came back and filed a follow up story not only on Glenn's resume problems but on several of the other lies told to him as well.
It isn't often you see a follow up story by a reporter where the reporter actually goes back and attempts to correct a snow job he had gotten previously. We commend the reporter on his vigilance and note this must have been a better than average snow job to cause this kind of reaction.
From here we don't find much on the Kovar's and their so called "black box" technology and inch wide satellite dishes until two and a half years later in April 1999, when Corsaire Snowboard Inc announced the acquisition of SAS and the changing of their name to Net Command Tech, Inc. (OTCBB: NCDT now pink sheets). Here is what they thought they were acquiring.
According to NCDT, the Kovars were involved in the "development of ultra high speed satellite and Internet communications for the transmission of voice, date and video signals; technology"
Somehow the Kovar's managed to talk the folks controlling NCDT out of about $3 million in cash in addition to debt assumption and a bunch of stock without ever confirming the existence or effectiveness of their alleged technology.
Were not quite sure how these things happen but we got this information from NCDT SEC filings (see link below). We find additional credibility in these particular disclosures due to the fact that about 60 days after the announcement of the SAS acquisition and right about the same time as the acquisition of SAS was closing, the SEC stepped in and suspended trading in NCDT stock while requesting information on, among other things, their recent acquisitions and claims surrounding the acquired company's technology and claimed income.
There are some pretty troubling claims in these filings and we suggest anyone with an interest in Skyway Communications, read this information thoroughly.
NCDT FILING
Here is just a sample of what you are going to find.
"However, SAS had not successfully delivered contracted services or technologies under these contracts. In addition, as discussed in Note 9, substantially all counterparties to SAS's contracts have made claims for return of the customers' advance deposits and other damages."
Bottom line here is simple; amazing claims about technologies were made but not delivered by Glenn Kovar and Brent Kovar while sucking money out of the investor's pockets.
Fast forward again to today and the latest venture of the Kovar family, Skyway Communications Holdings. Through this company and its subsidiaries, they are once again promoting some amazing technology with outrageous claims both in their press releases and on their website and people are buying the story. Here are some of the claims:
"While all commercial airlines currently provide some limited In-Flight Entertainment (IFE) and communication services, these systems currently rely on data transfer systems that are inferior in reliability and speed when compared to Sky Way Aircraft’s system. Sky Way Aircraft has the ability to provide data link technology that will dramatically increase IFE connection speed and capability."
BUT WAIT!
In their most recent 10Q filed on March 16, 2004 they clearly state, All of our products and services are in the development stage and will require additional testing.
The obvious question here is
How can these two statements exist when referring to one technology?
It appears to us that Skyway simply hopes to someday have the ability to provide these services.
And
How in the world can they claim superior reliability when they haven't even finished installing the first working model which will decide if the technology even works? This it a total fabrication.. a lie... a deception.. a con... "masculine bovine exhaust" at its best.
Section 10b-5 of the Exchange Act prohibits a person from making materially false and/or misleading statements in relation to the sale of stock and we believe that SWYC's claims on their website as stated above are clearly false and/or misleading.
We have another problem with Kovar's claims about his technology. This has to do with how he describes it in his SEC filings. In his most recent 10Q, Kovar refers to his technology this way.
"Sky Way Aircraft, a division of Sky Way Communications Holding Corp. was formed to utilize now-patented wireless data transmission software technology developed by Mr. Brent Kovar, our President. This technology is a software program for data indexing, which is similar to data compression but which mitigates data loss problems associated with compression. This technology permits faster and less expensive transmission of data, video, voice and audio between the ground and an airplane or other homeland security related ground locations than using traditional, non-indexed data transmission mechanisms"
However, when we look at the patent itself, the first sentence of the abstract clearly says,
"A system for increasing the transmission bandwidth of a terrestrial digital network". Additionally, the patent says nothing at all about cost effectiveness. More masculine bovine exhaust!
Again we find contradictions between representation and fact. And for those who might want to say, "but the technology can be used for wireless", we say SO WHAT? Disclosure is about accuracy and truth and the truth is that Brent Kovar's patent, IF IT EVEN WORKS, was designed for terrestrial digital networks. In his patent, Kovar even goes futher to make the distinction between satellite and wireless transmissions and the more traditional "terrestrial networks" such as phone lines.
Given this fact, how can Kovar then file a disclosure document with the SEC and call his technology a "wireless data transmission software technology"?
It is a violation of Securities Law to knowingly file false information with the SEC and, in our opinion, the claim that Brent's patent is for wireless data transmission software, is materially false and/or misleading.
Basically, this is what we see going on with the "technology". The Kovars, through SWYC, have acquired the old AT&T in-flight tower phone system for the US. This is the system that AT&T essentially abandoned when it got out of the in-flight phone business. Now, they are attempting to upgrade this system to support their claim of being able to transmit data at a rate of 15,000,000 bits per second". According to their own charts, the system they acquired from AT&T, an "in flight phone system" was only equipped to transmit data at a rate of 2,400 bits per second. Skyway does not disclose exactly what is required to upgrade their system from 2,400 bps to 15,000,000 bps but we think this is the kind of information that should be clearly and fully disclosed both in terms of cost and time.
This use of bits per second alone is quite misleading, in our opinion. The industry simply doesn't measure data transmission in bits per second anymore. A bit is the smallest form of data one can transmit. Data transmission today is measured in terms of kilobits, megabits per second (Mbps) and not bits per second.
Accordingly, the data transmission rate being claimed by Skyway is 15 Mbps or 15 Megabits per second. By comparison a typical T1 internet connection transfers data at a rate of around 1.5 Mbps. So, according to Skyway, they have developed their own technology for transmitting data back and forth between an airplane and a ground tower about 10 times faster than a T1 connection by using their software designed for terrestrial network systems and not by using other state of the art compression technologies or hardware thus allowing them that speed on both the up and down link.
Given the historical facts of the Satellite Access Systems promotion and eventual demise added to the apparent inconsistencies already in evidence, we find Mr. Kovar's latest claims about this technology to be highly questionable at best. We have written the company and asked for some documentation of their claims and have not received a reply. We will advise you if we get any additional information.
Adding to our concerns regarding the technology and the credibility of the Kovars and Skyway Communications, is evidence we are receiving regarding the relationship between Southeast Airlines and Skyway. According to Skyway, Southeast Airlines initially entered into a Letter of Intent in July and then
"signed a SkyWay in-flight system contract for a wide variety of in-flight services. Under the contract, Southeast Airlines shall receive, on a reoccurring basis, a percentage of the revenue generated by advertising and in-flight service usage of the system. Terms of the contract call for the installation of the Upgraded SkyWay in-flight system on the fleet of Southeast Airlines eight (8) MD-80 and DC-9 aircraft."
This understanding is not shared by Scott Bacon, a VP for Southeast Airlines. According to reliable sources who have spoken with Mr. Bacon, there is no formal contract with Skyway Communications or any of its subsidiaries. According to Mr. Bacon,
1. There is no "formal contract" with Skyway Communications or any subsidiary.
2. They do have what amounts to an agreement that is more like a letter of intent based upon numerous conditions gs, among them
a. Proof that the technology works
b. All required FAA certifications
c. Inspection and working demonstration of a fully installed and complete working model
3. Once Southeast has had an opportunity to see the product in action and can confirm its functionality and that both the airplane and Skyway have the proper certifications from the FAA, then they will "look at it" to determine if they want it.
4. It is way too early in the process to determine if anything will come from the relationship.
5. In the interim Southeast continues to investigate other options including but not limited to the Verizon technology which uses existing installed hardware. They also have been in discussion with other airlines. This is an active subject of investigation for Southeast out of a commitment to be competitive while Skyway continues to fail to deliver requested documentation.
Recent developments also concern us. We called Southeast Airlines to personally speak further with Mr. Bacon about this subject and were told by the operator at Southeast that Skyway had called and instructed her to refer any further calls regarding their relationship with Southeast Airlines to Steve Kline, the IR representative for Skyway. We find this action both troubling and inappropriate. We have written Mr. Bacon and asked him to comment and will let you know if he replies.
ADVERTISING CONTRACTS?
We also have serious concerns about the accuracy of certain press releases referring to advertising contracts between Skyway and commercial organizations in the Florida area.
On October 2, 2003, Skyway issued a press release announcing that
"SkyWay Communications Holding Corp. its wholly owned subsidiary, Sky Way Aircraft Inc., and Mavilo Jewelry Company of Tampa, Fl. announces their new Southeast Airlines 12 week In-Flight advertising contract valued at $75,000. The contract is scheduled to commence Spring 2004.
As previously announced in the original press release of August 29, 2003, SkyWay and Southeast Airlines signed an in-flight services contract whereby SkyWay would provide a wide variety of in-flight services to Southeast Airlines. A significant part of these services were the advertising of local Tampa Bay and other businesses and info-commercials that would be tailored to specific destinations of the Southeast Airlines flight schedule. The contract with Mavilo Jewelry Company, an import diamond and fine jewelry company located in Tampa, provides for a 12 week ad coverage on Southeast Airlines scheduled flights, between St. Petersburg., Ft. Lauderdale, and Orlando, Fl. Allentown, Pa, Newburg, NY, and Newark, NJ.
We contacted Mavilo Wholesalers in Tampa Florida, a respected jewelry company and asked them to confirm the contract with Sky Way Aircraft. When we informed the receptionist we needed to talk to someone who would know about advertising contracts, we were put in touch with Maria in their business office. We introduced ourselves and told her we were researching Skyway Aircraft and Skyway Communications and wanted to confirm the existence of an advertising contract between Mavilo and Skyway and she replied
"I’ve never heard of them."
Question; You’ve never heard of them?
Answer; "If we had, I would know about it."
Question: You would think if it was for $75,000…..
Answer: "[Laughs] – Yeah, I think I would know about it."
We also looked at the two press releases regarding contracts with automobile dealerships. One claims that Dew Cadillac entered into an advertising contract valued at over $200,000 and the other claimed to have made a deal with a West/Central Florida Bentley dealership. Surprisingly enough Dew Cadillac is a part of the Dimmitt Luxury Automobile Group as is Dimmitt Cadillac, the only Bentley dealer in West/Central Florida.
We have spoken with both the marketing department for Dimmit Luxury Automobile Group and with the General Manager of Dew Cadillac. Originally, Tracy Peterson, in the marketing department, indicated "I can't confirm this..... We're not doing anything like that". We offered to send her a link to the press release and she confirmed her willingness to follow up her statements with an email. We subsequently received an email from her referring us instead to Scott Larguier, the General Manager of Dew Cadillac.
We then spoke with Scott at Dew Cadillac and he refused to comment any further indicating that they were not in the habit of discussing their advertising relationships and weren't familiar with Our-Street.com. When we explained to them that Skyway stock was being publicly promoted using the Dew name already as well as the $200,000 figure, he didn't feel this was sufficient to change his mind. We then invited him to visit our website and to review the work we do and then decide further if he wanted to provide more information. To date, we have not heard further from him. We can only hope that, should the SEC inquire of them, that they will have more success with Dew Cadillac than we did.
We think it is important to note here that these press releases announce contracts "valued at" various figures. This should indicate the value to Skyway but understanding deceptive promotional tactics, we are fully aware of the fact that this can also be used to describe the value to the advertising customer as in "we can let you have this advertising package valued at over $200,000 today for the incredibly low price of only $xxx". Who of us haven't had the opportunity to purchase something from a TV pitchman that represents an $820 value for only $69.95?
Time alone will tell us what the actual truth is with deal with Dew Cadillac and the Dimmitt Luxury Automobile Group but as far as we are concerned, we are terribly disappointed in the Dimmitt group because, in the world of stock promotions, if you are involved as Dew Cadillac is, and you aren't part of the solution, you are part of the problem. We would expect this from an old style bait and switch Motor's Holding type store from the 70's but not a Cadillac and Bentley dealership. Oh, well.. no accounting for ethics.
Now for something really stupid!
(And really, really wrong too!)
In our opinion, Brent Kovar holds the investing public in very low regard. In fact, we get the feeling he thinks most of you are total idiots. We have reached this conclusion based upon a picture Brent has added to the monitoring page of his technology overview page. Here he has added a picture of a high-tech room full of monitors and work stations. On the wall of this obviously state of the art looking room, in the center of all the monitors, is the Skyway Aircraft Logo.
It doesn't take a rocket scientist to see that this logo has been added to this picture to give the false impression this is a Skyway Aircraft facility. This is both outrageous and insulting and we believe this is the kind of dishonest practice that deserves swift and harsh SEC action.
NAME THAT ROOM -
Now you too can be a Junior Detective and help Our-Street.com find out exactly what kind of room this is. We notice to the right of the logo is a map of Florida and some weather data so it looks like a Doppler radar screen but we just don't know. Can you find this room somewhere else on the net? Do you recognize exactly what this room is actually used for? If so, please let us know. Write us at info@our-street.com and help us "name that room". Help us solve this and, if we had a secret decoder ring we would send one to you.. but we don't. You will have to settle for our gratitude and that of others who want to know as well and you will know you helped us take back our street, plus, if you want, we will post your name right here as a champion internet detective.
TO STC OR NOT TO STC. THAT IS THE QUESTION!
The March 2004 issue of Avionics Magazine it is reported that
"The aircraft itself will serve as a technology demonstrator and test bed. The systems on the DC-9-15, as of early February, were in the supplemental type certificate (STC) approval process."
We have been further informed by the company's IR person that the DC9 is in Chicago at DuPage Airport and that the system is being installed by Scott Aviation. So we checked with the Aircraft Certification Office at the Chicago office of the FAA since that is the normal place where an STC for the plane would be handled. As of March 29, 2004, the FAA representative called us back after checking all the records and informed Our-Street.com that
"there is not any current Sky Way Aircraft STC projects in this office"
In fact the man we talked to at the FAA hadn't even heard of Sky Way Aircraft or Skyway Communications. We figured that if anyone in the FAA knew about Sky Way Aircraft or Skyway Communications or the Kovars, it would be the Tampa FSDO office of the FAA so we called them as well. They informed us that they had never heard of Sky Way either and further, that neither Sky Way Aircraft nor Skyway Communications had applied for or been granted any FAA licenses either.
We also asked about an STC under the other Registered owner of the plane Royal Sons Motor Yacht Sales, Inc.
Now maybe there is an STC application somewhere in some other name but frankly, we doubt it very much. We invite the Kovar's to provide the proof of an ongoing application and we will gladly publish it here.
For those of you who aren't familiar with the STC process, the first step is to file a Certification Plan. This informs the FAA of what you intend to do. You can't even start work without that plan being filed and approved.
We also spoke with the FSDO office of the FAA in Tampa, Skyway's nearest office and the gentleman there, who handles the certification of companies hadn't even heard of Skyway or the Kovars either.
BUGGY WHIPS ANYONE?
In 2002 Claircom Communications, a division of AT&T shut down their InFlight phone service. It wasn't profitable, it wasn't going to be profitable and previous attempts to sell the system had failed. This left Verizon as the only other Air to Ground company providing in flight phone service the old fashioned way, with land based towers instead of satellites.
In steps a white knight, Skyway Communications and they get the deal of the century, or so it might seem. They bought the entire 10+ year old system, including the broadcasting hardware for a cool million. Was this because no one else knew about it? Hardly, the fact Claircom was trying to dump this property was common knowledge in the airline and communications industry.
We are being led to believe that the reason the system didn't make sense to anyone else in the industry is that Brent Kovar and Skyway Communications Holdings has been sitting on a technology so advanced that it will allow the Clarion tower/communication system to transmit data in both directions ten times faster than land based broadband internet systems and what's more, he has been sitting on this unique software technology since 2000 without finding a single profitable commercial outlet for it to date.
Further, Brent is asking us to accept his claim that this technology will not only support high speed internet access on commercial aircraft, he also is asking us to accept his claim that their web cams and other aircraft monitoring technology will prove valuable to both airlines and governments in the quest for homeland security.
Of course to accomplish this task we have to suspend our concern for the fact that this technology, (assuming it even works at all in the first place), will be limited to the US and some limited parts of the Caribbean and Canada so it would have no practical value to any airlines that have need for technology which is international in scope. Without the use of the latest ground-to-air satellite based technologies, Skyway's system will be useless as soon as the plane leaves US airspace and the range of the coastal towers. This automatically eliminates all the international carriers.
Of course, this also calls into question the logic behind ramping up the towers in Alaska and Hawaii since the system would go dark en-route. We could also get into discussions about compatible systems and how Skyway intends to integrate their airlines and systems with the major airlines who will all be forced to use competing systems that feature the latest in leading-edge, state-of-the-art equipment and global satellite communications technology instead of surplus towers and equipment purchased from a now defunct company.
In case you didn't know it, Transdigital Communications Corporation, the company SWYC just announced buying some equipment from, is out of business. Phones at their listed phone number are disconnected and their website is down and has been for some time. We aren't quite yet sure what happened but if you look at their former website you will see that they never really got beyond the "we're putting our website together" stage.
Also, since international flights are the ones that are the primary focus of terrorist watches, having facial recognition software installed only on airlines and planes that will be limited to domestic flights would seem a little irrelevant.
We are doing our best here not to get really sarcastic but come on now. Are you getting a clue here?
Competition Anyone?
Just so no one thinks that the Kovar's have a lock on the high speed air to ground communication/internet business out there, there are a few other players on the scene. Granted, none make the claim of 15Mbps of two way data transmission like Skyway does and none of the serious players have the advantage of a once mothballed network of ground based antennae that Skyway does either. Lacking the distinct qualities of a "US and limited areas of Canada and the Caribbean only" ground based antenna system these companies are forced to resort to other methods of air to ground data transmission like leading-edge, state-of-the-art, global satellite systems.
Of course, being well funded companies, they have managed to get a jump on Skyway. One example is the Boeing Connexion who, although they don't have the Southeast Airlines letter of intent contingent on just about everything including the apparent "if it works and we decide we like it and haven't found something better in the interim" clause, they do have Boeing behind them.
It is our understanding that Boeing does have some involvement in the manufacture and sales of commercial airplanes and, even though they don't operate their own airline, we suspect they can perhaps influence the kind of systems which are installed in some fleets anyway. Perhaps that is why the Boeing Connexion has already concluded in flight trans atlantic testing and is launching their system using Lufthansa Airlines as their initial launch airline.
NOTE: The chart displayed by Skyway showing their connection speeds is misrepresented. The initial trans-Atlantic test run, according to articles had a downloaded speed of 3 Mbps and an upload speed of 128kps. This initial test download speed surpasses what Skyway indicates on their comparison chart and according to Boeing Connexion, their download speed now is at 20 Mbps, surpassing Skyway's claimed download speed by 33%. Boeing Connexion's upload speed is currently at about 1 Mbps.
IF YOU ARE GOING TO MAKE COMPARISON CHARTS, AT LEAST GET THE INFORMATION RIGHT. DON'T MISREPRESENT THE COMPETITION TO MAKE YOURSELF LOOK BETTER THAN YOU REALLY ARE!
Another player in the field is a Bothell, Washington company called Matsushita Avionics Systems. Matsushita is a bit of a newcomer to the Avionics business having only entered this field in 1979. Fortunately they did have some previous experience in electronics having originated in Japan about a century ago and establishing a name for themselves in electronics. Among other ventures they established and still control the Panasonic product line. They already supply systems to airlines and are offering upgrades to their latest systems that include internet access in addition to other features. Of course, Matsushita is also stuck with that leading-edge state-of-the-art, global satellite based communication system instead of Skyway's 10+ year old revived, ground based, geographically limited system so there is no telling how they are going to compete against Skyway once (and if) Skyway ever gets their system installed, working as represented, and certified by the FAA.
Of course Skyway will have the edge, they claim, because they will be offering the systems for free to the airline and the internet free to the customer and making their money on forced advertising. Despite the fact this model has yet to be successful over the long haul, as far as we know except in the area of mass media, Skyway has offered to prove the critics wrong and backs it up with presales of high value advertising contracts to the likes of Dew Cadillac, Dimmitt Bentley and others commercial establishments in Florida.... or do those contracts really exist after all and are they for cash in the amounts represented??? Looks like a bunch of smoke and mirrors to us based upon what we have been told.
DID YOU KNOW THAT BRENT FAILED AT AN IPO ATTEMPT BEFORE SWITCHING TO A SHELL MERGER?
We find it interesting too that the Kovar's initially attempted to take Sky Way Aircraft, Inc public before finally giving up and taking the easy way to the market with the reverse merger into a shell. Now, in our opinion, there is nothing wrong with a shell merger but we get concerned when a company, or more appropriately, the people involved with a company, can't get an IPO through the SEC then quit trying and resort to merging into a shell where the SEC has less to say and less opportunity to ask questions. Remember, the key to getting an IPO through the SEC is thorough and accurate disclosure. They don't conduct a merit review to determine if they like the business. They simply want you to explain the business and the corporate structure completely and accurately.
If you can't get your IPO cleared, there is definitely something wrong. Aside from not answering the SEC's questions fully and accurately, there aren't too many reasons why you might not get cleared. We have heard that another source of difficulty can sometimes come (unofficially) from being someone the SEC would prefer wasn't running a public company. In the past the SEC has been accused of "bed-bugging" registrations (not responding in a timely fashion) or of simply issuing comment letter after comment letter no matter how well you responded to the previous ones. Given that registrations are reviewed in a subjective fashion by people with more files on their desk than they should have, both are certainly possible and we don't even fault them for employing such tactics if it protects the market. In the case of Sky Way Aircraft, we have no idea whatsoever why they quit trying but what we do know for certain is that they filed their initial SB-2 in July 2002 and subsequently filed 4 amended registration statements over the next 8 months then quit trying and filed a formal notice to abandon the registration in May 2003 just before sliding into the shell and starting trading.
*Preferred shares
The Series A and Series B Preferred, which represent 300,000,000 common shares currently are convertible into common. Although both Series initially had milestones that had to be reached prior to conversion, the most recent 10Q has eliminated any discussion of their conversion into common which suggests they can be converted at any time with no additional payment. The Series B is still convertible upon certain events that may never occur. Those events are 1. The completion of a successful IPO in the amount of $25 Million. 2. A minimum closing price of $4 per share for 30 days (adjusted for splits, acquisitions etc) or 3. the successful launch of their product (definitive agreements with three (3) nationally recognized airlines to provide its Products and Services; (ii) to have an operational network capable of providing its Products and Services throughout the United States; and (iii) an operational ground base data center.
Based upon available information, we do not consider the agreement with Southeast Airlines a "definitive agreement" however, management may disagree. Further, it is important to keep in mind that conversion terms of convertible preferred shares can be changed and since the Kovars have voting power equal to the converted shares, they control this company with absolute power.
We believe, their disclosure in SEC filings is woefully inadequate considering the level of potential dilution and the voting control they hold. We also find no evidence that the Kovars, with their overwhelming control of the voting power of the corporation, are prohibited from modifying the conversion terms to suit themselves.
Although the Kovars do disclose the terms of the convertible preferred in their SEC filings, we feel they do not disclose this adequately and that this failure also represents a violations of Section 13 of the Exchange Act as a material omission.
ALMOST TOO STUPID TO EVEN MENTION.
We sometimes marvel at the hubris and gall of people sometimes and this time is no exception. Brent published this amazing sounding announcement in August of last year.
SkyWay Communications Holding Corp Announces Congressman and Republican Majority Leader Tom Delay's Appointment of Brent C. Kovar, President of SkyWay, to the National Republican Congressional Committee Business Advisory Council
HONESTLY, HOW STUPID DOES THIS GUY THINK YOU ARE? First he doctors the picture to make you think that is his monitoring room or something then this!! This is nothing more than a simply fund raising tactic on behalf of the Republican party. They cold call people and get them to contribute a few hundred dollars then name you to this Business Advisory Council. Nothing wrong with doing it but any company that uses is to promote their stock is, in our opinion, up to no good!
A little more on the subject
Even a little more
ENOUGH SAID!
SUMMARY
Give us a break here!! We have here a family with proven lack of credibility running this company and paying themselves generous salaries ($175,000 annually to Brent). We have here a family that either currently is or almost certainly was under SEC examination with the Net Command Tech/SAS matter and yet, in our opinion, continues to act so as to deceive the investing public to get where they want to go.
We have here a software technology that has not been proven or confirmed by any reputable independent source that we can find.
We have a company that is issuing shares at a rate even Our-Street.com finds hard to comprehend. In the past 3 quarters, we have seen the issued and outstanding go from 57,200,000 on July 7, 2003 to 70,200,000 on October 31, 2003 and 124,701,669 on March 9, 2004 and all this dilution was without benefit of an acquisition. That means that the Kovar's are issuing stock at an average rate of 204,893 per day. Of course, all this stock has nothing to do with the 351,998,000 shares represented by existing convertible preferred shares.
Finally, we have here a company that has mislead the markets about the value and nature of existing contracts of clients on both sides of this business equation.
In our opinion, if the Kovars aren't stopped here, they will continue to use the public markets and trusting investors as their personal ATM machine without consideration or concern for shareholder value, honesty, disclosure, or ethics.
As always, we will gladly provide a forum for any documented and verifiable comments by the company and will promptly and sincerely apologize for any errors in our facts. Our commitment is to bring forth the truth and the facts in the matter and we encourage Skyway Communications Holdings to produce whatever documents they can to clear up our concerns and the concerns of what we assume are many SWYC shareholders.
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