Acc...I can answer most of the one question with factual information. The second is highly speculative.
1) What was the overall economic climate and financial condition of D&D Displays at the time JD and Glenn took a combined $400k from the company in the form of loans?
The overall climate when they took the $375,911 in loans was just hunky-dory from their perspective. Their new public shareholders would have been horrified. They had just sold or pledged millions of shares and foisted all debt of a D&D Displays in serious financial difficulty onto the backs of their shareholders by sourcing a $462,500 line of credit from a "business" with a $10K a month interest line (an astonishing 25.9% annulized rate). No problem on the insane interest rate of course since the shareholders were picking up the tab on that. This coming off a year when they had lost over $347K in D&D. The loans may well have basically signified (IMHO) them taking shares they had been given by the reverse merger shell now named EXPO Holdings, Inc. and pledging them for cash from this "loan" carrying an annual rate of 25.9% (462,500 @ 10K per month = $120K annual interest = 25.9%). Thus removing even themselves from any remaining debt due to lousy management and passing it onto the backs of EXPO Holdings, Inc's new shareholders. JD Brown took in the neighborhood of a $147K loan if memory serves, Harrs the remainder at $228K. This loan stood @ $352,654 on 12/31/2007 and had climbed to $397,665 by the end of 2008. Harrs has raised the amount of his "loan" to $253,923 while Brown's had fallen a bit to $143,742. By 2008 I was unable to trace what had happened to the original $462,500 25.9% APR loan that no doubt was the original source of the executive's windfall, but I am assuming it was exchanged for the more favorable current $2M credit line (which would represent about the 20% ($400K) that JD Brown claimed was all that was outstanding in July 2010). Meaning everything but their loans to date has probably been financed by shareholders...including the historically known 9 of 10 running quarters of losses.
2)What would the PPS be today if Glenn and JD were to have simply paid back the company the $400k they took as opposed to DOUBLING the A/S & diluting the O/S into oblivion?"
This is all speculation of course, but since, IMHO, there wouldn't be an EXPH Holdings if they hadn't diluted it into the ground using shareholder equity, the PPS would be irrelevant as there would simply be no company. If it wasn't for going public D&D Displays may have simply failed. And taken it's principals along with it. That is all speculation as I have no idea how heavily invested Brown and Harrs were in D&D at the time they took it public. I can only guess it was to the tune of about what they immediately sucked out of EXPO the first chance they got.
The only way to understand what is going on at EXPH is to clear one's mind of the pretty pictures of stacked plywood, the shiny machines and the endless and absolutely groundless conspiracies that clandestine plots and NSS are 100% responsible for the PPS decline and look at why EXPH went public in the first place. It is crystal clear. Not to grow the company, but to relieve a failed company management very likely deep in debt both personally and business wise and probably facing bankruptcy as their other option. And they accomplished this by shifting that debt to public shareholders. Leaving the now debt free principals free to collect large salaries and great perks while the shareholders picked up the tab for the lot...including losses. Nothing has changed at EXPO that wasn't the same at D&D Displays. They still (historically) continued to overspend on themselves. They still (at least as far as the records provide information) lost money. It's just then when there were huge losses and they needed more capital to keep the company humming and place those big piles of lumber and shiny machines in front of a webcam, they just sold more shares. And I see nothing at all having changed. Nothing.
Toward that end, selling more shares is what is going to happen. It is a near guarantee IMHO. They have brought their friends and buddies onboard from another failed company and shuffled 14 of them up to the company feeding trough. They are going to hire a new CEO (who I am still trying to confirm is NOT a relative of JD Brown) that will add more thousands to that G&A drain. It is inconceivable they are going to put themselves back into the position of debt they were in before by taking on the responsibility of backing this $2M credit line over the amount that equals the shares they've pledged to secure it. Probably at about the amount they borrowed in the first place. The O/S is almost depleted. That leaves two options. 1) Raise the A/S (let the incoming CEO take the hit) and put out some lame story about "huge growth" yadda, yadda, ad naseaum or 2) Do a R/S at somewhere between 20 and 100 to 1 leaving the remaining shares in the EXPO treasury unaffected by the reverse reduction in number but still having the advantages of the massive increase in worth.
I hope that answered your questions. I am sure there are other explanations available that would color the situation more favorably with wishful thinking and conspiracy theories filling in the ugly gaps compromised by facts in my rendition, but there you are. All IMHO.
SBB
