The following is a summary of a conversation I had with Jayne Davis this afternoon. Because her statements as ****'s official corporate spokesperson contradict ****'s recent assertions and because I'm a little chary of challenging **** publicly with my findings in respect of his eminence on this board, I thought that I'd just settle for p.m.'ing my findings to the handful of loyal **** adherents on SI:
I called **** this afternoon in an attempt to ascertain the truth about ****'s accusations, and Jayne Davis, IR, refuted substantially all of his damaging charges. Regarding the number of shares, the company still recognizes there as being only 16 mil. outstanding on a fully diluted basis. They were ordered by the court in the T.K. case to deposit 18 mil. newly minted shares in an escrow account pending the outcome of their appeal with T.K. in case they lost but those shares exist only within the realm of the litigation and are not considered (at present) to exist materially as part of ****'s share capital. An important implication about this reality is that the per share earnings accretion guidance regarding SMI's announced casino financing commitment is in no way altered. I presume that if **** succeeds in its appeal, they will vanish; if **** loses, they may have to be issued. Also, Jayne said that the number of escrowed shares may be reduced in the future for court related reasons I don't know and didn't ask for clarification.
Additionally, she said emphatically that there has been no recent reg. S conversion and was bewildered why anyone would have made such a statement. She did point out that several conversions had already taken place, which I was aware of. If memory serves they converted early last year before **** was fully aware of what was befalling them and none since.
I then inquired about another unrelated rumor that the spin-out strategy was in limbo. She said the their auditors have told them that they won't give their imprimateur to the audit until **** has cleaned up much of its legal matters because the qualifications that would have to be in it would render it essentially useless and be to great a liability for all parties involved. This to me seems quite sensible. They had been hoping that the Honorable Judge Ramos would render a decision before the end of July but instead he has taken the month of August for holiday. This conflict seems to be the primary stumbling block to clear in order for the audits to become complete. Once the financials are out, the spin-out strategy can be executed. When I asked her if she would place odds on this happening by years end, she said that it was managements expectation that it most certainly be complete by then.
As always, never a dull moment. Warmest Regards--
**** |
