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Replies to post #162879 on American Green Inc (ERBB)
05/16/14 1:06 AM
A less publicized but more complex battle has been taking place between SunnComm and what seems to be a small group of disgruntled shareholders. These apparent SunnComm investors have filled Internet message boards with detailed information that basically claims the company is at worst a sham and at best a deceptive business. The postings describe a string of odd acquisitions, somewhat misleading financial press releases and dubious product announcements that should have the US SEC (Securities and Exchange Commission) kicking off an Enron-like crackdown, according to the SunnComm haters.
After reading hundreds of pages of SEC filings and other SunnComm documents, we were quite shocked when an actual human answered the company's main number. The case made by the shareholders - one of whom has spent four weeks e-mailing us information about SunnComm - made it seem like a stuttering voicemail message would be all the company could afford in the way of a receptionist. - 27 Sep 2004
"We shifted from content production to content protection," Jacobs said. "This was to show shareholders that we could be in a business that could be real. The purpose was to transition the company by getting the old people out and attracting enough funds not to have the company go under."
"Because of the profile SunnComm realized, Quiet Tiger has increased their volume, and its share price has gone up from a couple of cents to 8 or 10 cents. It's been a positive experience for them. They had no prospects before."
In a deal best described as unorthodox, Fan Energy agreed to acquire SunnComm's Project 1000 DRM technology for 23.8m shares of its stock. As it turns out, that gave Project 1000 - then a SunnComm subsidiary - the majority ownership (53 percent) of Fan Energy - the very company meant to be acquiring Project 1000. At this point, Fan Energy changes its name to Quiet Tiger and enters the DRM market.
A complaint allegedly sent to the SEC charges that Fan Energy/Quiet Tiger misrepresented the value of its assets - the $3.8m in floppy disk gear. There's no record that a single disk was ever produced, although Fan Energy does appear to have done one deal as a type of floppy disk reseller, generating only $4,000.
"It is without doubt that Fan Energy (now Quiet Tiger) had no serious business plan to manufacture floppy disks and the equipment was acquired for no other reason than to place an asset in their balance sheet that they could use to bolster the value of the company by misrepresenting its true value," the complaint states. "Additionally, SunnComm fortified the deception by stating they were committing to using 50 percent of the capacity and in turn caused its own shareholders to be deceived in regards to the true intrinsic value of the shares they were to receive as a property dividend."
Fan Energy's description of its floppy disk business is certainly questionable. In various filings, the company suggests that it could be a major player in a multi-billion dollar market and churn out as many as 6m disks per month. Given that the company never actually produced a single disk and that it admits at times to having no employees, it seems the investors have a point about Fan Energy not being a serious floppy disk contender.
AI
