I agree, I think they have a superior product. I stated this a while back for one of the reasons I first bought the stock. Management seems closed, cloaked in secrecy. This is very, very, very bad! I have heard a lot of good marketing ideas from many of you, but I doubt if any of you will ever get the respect of presenting your ideas say in a shareholders meeting.
I believe the consultants and the methods of their compensation is and will be the downfall of this company. The magnificient 7 as I call them are dangerous...absolute power currupts absolutely! They have no oversite on them at all and worse no one challenging them.
Since I now only own 10 thousand shares which I kept to maintain standing in any litigation that may be forthcoming….I will offer one more series of questions for your review and then leave the board until any of you address me directly.
Questions: Why aren’t all of you banding together to demand more respect from this company and why aren’t all of you adamantly demanding (screaming at the top of your lungs) to know the identity of the consultants.
Question for math experts. Pretend you are a Consultant: Let’s say that out of the four consultants who as a group received well over a billion shares in 2009 that your cut was 200,000,000 shares. The IRS views shares issued as compensation differently than they do shares bought and sold through investment. In other words capital gains do not apply for you and regular income rates will apply---am I correct?
Let’s say using the Black-Scholes method MDFI determined that your 200,000,000 million shares are worth for tax purposes .005 cents a share (200,000,000.00 times .005 = $1,000.000.00) Your gross income is one million dollars.
a. Is it possible that the IRS will allow you to defer income tax until you sell the shares? Remember you received the shares as compensation.
b. How are you going to get out of paying social security tax?
c. How are you going to get out of paying Medicare tax?
d. How are you going to handle your state income tax?
You are going to get another couple hundred million shares this year too so you had better plan well and also have to pay estimated taxes. You are an insider (with seemingly no responsibilities that an insider has) so you can plan better when to sell.
Now let’s also assume that you “the consultant” are independently wealthy and do not have to sell your shares every week to pay bills and eat, so your only problem at hand is paying the taxes on the gross income of one million dollars.
All right let’s also assume that through legal maneuvering and good tax advice on deductions and loopholes you cut that million in half all the way down to 500 thousand in taxable income.
Currently that puts you where?...at the 39 per cent bracket just for the feds not counting your state income tax. Okay let’s forget what the current administration is planning and when the Bush tax cuts expire and round everything off to say 45 per cent to cover state and federal. That eliminates arguments what the tax will really be because 45 per cent is going to be close enough for this demonstration.
Okay math experts remembering that you have to pay one quarter of your total tax obligation every 90 days how many shares do we “the consultant” have to sell on the open market every quarter to pay taxes on 500,000 dollars income. Let’s give all the doubters a break and say the price of MDFI goes up to .01 a share and stays there for the entire year. That is fair because it has only reach a penny for a few days in the last couple of years.
After you have it figured out times it by 4 and that is how many shares a quarter the consultants alone must sell on the open market---just for their tax obligations, not bills, food, toys or out and out fun.
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