must-read open letter from former CEO of ACYD (now Wialan Technologies)
Letter from John Folger as a private shareholder and former CEO of ACYD
This letter has not been approved by, or in any way sanctioned by the company and I bear sole responsibility for my statements. There is no inside or inappropriate information contained in this letter. Everything is public or just my own opinion of issues under discussion. Please verify all claims and comments using your own due diligence. I have no role in Wialan, but continue to wish them Godspeed.
This is an attempt to set the record straight and to dispel the falsehoods, misrepresentations and damaging innuendo that demean the intelligence of the IHUB audience and that can potentially damage the ACYD/Wialan shareholders with libelous and slanderous mischaracterizations. You might notice that I am posting under my own name in order to be completely transparent and so there is no misunderstanding of intentions. Feel free to cut and paste my comments in response to innuendo. My phone number and email have not changed. To any bashers, I ask that you offer the same courtesy.
If this letter should attract any attacks or comments from my personal fan club, I suspect it must be an effort to distract from the intense potential of this new enterprise. I confirm that I am a long on this stock and a long term shareholder. I have never sold a single share of ACYD over more than 4 years.
Many individuals worked very hard to deliver value to the ACYD shareholders and it is unfortunate that all of us have become lightning rods for attack and criticism. We are history; please focus on your future.
First let’s consider the merger with Wialan. When the former ACYD business plan failed, we made it known that we were seeking a new and fresh business operation. We reviewed several options. The merger of ACYD with Wialan was accomplished for all of the right reasons. The major ones were:
1. Protect and improve the value for the current ACYD shareholders
2. Find a new business entity and mission with greater promise and profit potential
3. Develop a credible way to insulate the new entity and the shareholders from creditors
4. Create the means to pay off the former ACYD liabilities by the corporate spin-off
5. Reward the shareholders with additional spin-off participation as a dividend
We believe that we accomplished this objective in immediate value and created an enormous upside. This is a small but innovative and stable company that is just breaking out into market penetration. The ramifications of what they have created are only now beginning to be understood. While their first platform is a new and better WIFI standard, the market segments to which they can adapt are endless.
The former ACYD business model failed for 2 primary reasons; lack of sufficient funding to acquire enough properties (there were 11) to create sustainable revenue, and some very bad choices by management. These decisions and choices were mostly mine and I accept full responsibility. We never reached the critical mass required and were badly slammed while we were still trying to develop our new business model. There were never any funds or shares mismanaged. There was dilution, unfortunately, as we continued to attempt to gain some traction. No one got more than about $60K in annual compensation. Despite the persistent rumors, no one who was a corporate officer or ACYD advisor received any large share compensation package or the massive dilutive convertible debt or notes that get continually discussed. There were never millions of dollars.
We took great pains to insulate the new Wailan venture from the former ACYD liabilities of around $300,000, which are to be paid out of a reserve of some of the stock I received and the balance is to be paid out of the corporate spin off that is described in the merger agreement. That document also states that there will be a “distribution” of shares in this new spin-off corporation to the shareholders of ACYD. This was designed to be an extra dividend for the shareholders.
Another recurring question is the mention of a reverse split of the common stock in the agreement. While not required, it was prudently included as an option in case the company required it to meet a higher exchange listing such as NASDAQ. We felt this uplisting was important as the former management and negotiators on behalf of our shareholders. The stock price should manage on its own.
Because of the way that we engineered the merger structure, I do not believe that Wialan will be required to issue any shares to cover former ACYD liabilities or convertible debt based on the creation of the spin-off at the point that the company completes an S-1 registration.
Prior to the merger, I forgave almost $200,000 of $300,000 of unpaid back salary and expenses and took a restricted common stock payment in the future of ACYD/Wialan rather than maintaining a cash debt. This makes me a serious long term investor in the new venture to the tune of an additional $100,000.
I should also mention that any officer or control person of Wialan that received any of the 1.9 billion shares of stock is not only restricted for 1 year, but also subject to a leak out provision after that period. No member of former ACYD management received any compensation in stock or cash as a result of the merger. This would have been a required disclosure item. There is no dumping of old ACYD shares by any of us.
The merger became more time consuming and problematic because as disclosed, since January, we had to borrow more funds for operating, legal and accounting expenses and to support litigation to regain control of the company in order to solicit the required shareholder approval to complete the transaction. That we were successful under such adverse conditions is still considered a miracle.
The delays on the financial and quarterly reports relates to the original records being withheld by a former director and our inability to access all of the books and records in a timely manner. We were forced to spend considerable time, effort and money to rebuild the information that Wialan and OTC would require. As previously disclosed and discussed, an additional issue relating to the delay of the 3rd quarter filing involves the consolidation of the financials of the former ACYD and Wialan. Especially relevant is that Wialan was a private company and as such, was not set up to maximize revenue and profits but rather focused on tax implications. Its accounting was on a cash basis, which is normal for a private company, not accrual as required for the OTC and SEC.
From my own experience, FINRA can take their own time to ask questions and require answers before final name and symbol change. It is also not unusual for a recently public company and its management to experience transition issues that must be resolved. This is new territory for them and we believe that they are being addressed.
During our initial due diligence for the merger, we were struck by the people and the future potential of Wialan. The company has terrific technology and really is the “special sauce” for the next generation of WIFI and far beyond. We were amazed when we saw the demonstrations for their new early warning platform and then realized that there were a series of additional new “breakthrough” applications that are far beyond anything currently being contemplated.
We had to be very careful when we suggested and recommended Wialan as the proper merger partner for ACYD and we truly believe in the technology, the creative engineering team, and the national and international market potential of all of their new applications. For obvious reasons, I won’t disclose all that we saw, but I can state unequivocally that that are a host of additional breakthroughs that can make the Wialan application totally ubiquitous in every state, city, town and country. It’s not just WIFI, streaming, movies and corporate and strategic worldwide partnerships anymore. If you understand that streaming video cameras and loudspeakers can now be controlled at a distance, just imagine the other implications with whole buildings and towns operated on a secure wireless network. It’s mind boggling.
The founder of Wialan, Victor Tapia, is a very dedicated technology engineer who has a genius for anticipating and solving problems. His core team is focused and driven. Over the last 5 years or more, they have built the specific solutions platform to a better standard than the competition. They have more exciting solutions that have yet to be discussed or released. This constant testing and evolution takes time, but they are now ready for substantial market expansion through deployment, relationships and co-ventures in the United States and internationally. Their press releases indicate that they have already passed the “proof of concept” phase and have the initial relationships with organizations, carriers and technology partners in place. Everyone now believes that the revenues will ramp up from here after the years of startup, testing and development phases completing this year and they are just entering deployment right now!
You have all been informed that corporate relationships are expanding as new opportunities, applications and international markets are opening. More manufacturing and fulfillment expansion is being implemented in South America and Europe. Consider that as an emerging new company, they are already in almost 10 countries!
During our due diligence, we met the team, saw the installations, witnessed the demonstrations and watched the implementation of the existing products and the future applications. I saw the eyes of potential clients’ pop open when they saw and recognized the implications of this new technology. After years of hard work and small scale deployment during testing and research, the revenues should now begin to show geometric progressions, or as Drew described as a hockey stick, because they are built on a solid foundation with patent protected technology that really works and offers huge global market opportunities.
To dispel some other false impressions, I offer a word about the people involved in the former and future of the amazing new company that helped to complete this transaction for the benefit of all of us.
Tim Peabody is an active attorney with a full time practice in California with an investment history in technology, so he understood the future direction for Wialan. He was instrumental in working out the merger details and it should be no surprise that he would move on professionally while continuing to support the company’s intention to find a CEO and management team with WIFI, technology, and government and municipal contacts that also has public company experience.
Mike Connors is a well-established and capable real estate development professional with stellar credentials. As an investor and corporate advisor with various operations and projects around the country, he brings a wealth of experience and contacts. One might imagine that from his field, he might recommend and deliver other real estate developers and new underserved target markets.
Drew Connolly has the skills, experience and relationships as he described in the conference call that will help to create significant benefits in his new position as a Director with Wialan. His experience as a third generation stock broker, investment advisor and SEC participant is well suited for this role. During the former ACYD operations, the company was unfortunately not able to utilize his credentials to any effect because it never really got off the launching pad. He was never involved in any incentive or other personal enrichment plan. He has no convertible notes from his former relationship with ACYD.
Mitch Freifeld was much in the same situation as Drew because ACYD never reached the size and scale for his services. In a past professional life, he created a very large national sales team with more than 100 field offices. It would be safe to assume that his experience developing and expanding sales and marketing systems and personnel would be a significant benefit to Wialan.
I have read the criticism of the prior history and experience of all of the former ACYD management, but it completely misses the mark. I believe we become stronger by some of the experience gained by our mistakes. In fact, some of my new professional and consulting opportunities result from past, mistakes and that we found an honorable, successful and profitable solution for our shareholders and creditors.
We believe we made the right decision for all parties concerned with this merger and we look forward to the day when Wialan leaves its competition in the dust and becomes a new global WIFI and technology infrastructure brand.
I wish all of you a Very Merry Christmas and a Happy New Year and just like you, we anticipate the robust expansion and profitability of Wialan in 2014 under its new name and ticker symbol!
Sincerely yours,
John Folger
AI
