Got this from Stockmans forum
Hi LeRoy:
I e-mailed the following questions to STS-v (Starpoint) but my e-mail bounced back
(did they disconnect?). One of your contributors says that they news releases
could use some work. It turns out that they misinform or, in plain language, lie in
their news releases. In at least a couple of their news releases they have specified
that the payment date for the Angola property has been extended to June 05,
1997. Based on this information, I thought that I had plenty of time to pull out ...
As far as I am concerned, the company (management) has lost all credibility, but
it is a bit late to find it out -- the stock plummeted 50% within minutes of reopening
last Monday and on Friday closed at less than of 25% of the prehalt price. This is
my biggest % loss by far. One of the lessons I have learned is that I should trust
my own due dilligence and judgement much more than what I have been reading
for months on the internet (especially Investor's Guru). It is a learning process all
the time but this particular lesson turned out to be very costly ...
My e-mail to Starpoint's President was as follows:
"Please explain the following questions based on the quotes from your company's
news releases: (1) Apr 04/96 "the March 30 1997 deadline for purchasing the DMS
Sortex production equipment has passed"
Q1: Does the equipment purchase have any impact on the ownership of the
property.
If yes, why has it been NEVER spelled out in a news release ? If no, what is the
significance of of this announcement ? and "one corporate investor would not be
acceptable to the VSE".
Q2: A thorough explanation of "not acceptable to the VSE" is needed since this
statement caused the fall of the stock price from $1.30 to $0.40, right after the
company annonced the private placement and said that they are leaving to Angola
to finalize the purchase of equipment a few days later. What were the exact
reasons for this 'unacceptability'. Can you give this reasons or do you suggest I
contact the VSE (I will contact the VSE anyway).
(2) Mar 12/97 "The company confirms it has paid approximately $1,4311,000 of the
US$1.5 million initially due on February 5, 1997. THE COMPANY HAS
NEGOTIATED AN AMENDMENT WITH GEXPO EXTENDING THE PAYMENT
DATED FOR THE BLANCE OF APPROXIMATELY $600,000 UNTIL June 05,
1997". This extension and the amounts paid and to be paid were initially spelled
out in Dec 06/96 news release.
Q3: The release states that Cdn$600,000 is to be paid by Jun 05/97. Does it mean
that the company is not in a contractual default with regards to the property until
that date? If the company is in default earlier, where did you spell it out in your
news release ?
Q4: Is there any other material information with regards to the property payments
(consideration and dates) that was not ever communicated to the shareholders ?
Furthermore, what exactly is the breach of contract that resulted in Starpoint
loosing its property in Angola ?!
Q5: Has the money been received for the following placements (in Cdn$)?
-- Feb 12/97: 384,615*$1.30 = 500,000
There was no news release to the contrary, so I assume that the private placement
from Feb 12/97 closed and the company received close to 0.5 million. If this fund
was used to meet the Jun 05/97 obligation of 600,000 , then the outstanding
balance should be minimal. Please confirm or dispute the last paragraph. [The
company said on April 11, 1997 that the placement has not closed. It took them
two months to spell it out.]
BOTTOM LINE: As per the information in your news releases, you will meet the
initial obligation with regards to the Angola property if you pay $600,000 by June
05/97. Why do you say that you will have defaulted on the payments by April
11/97 ? This is a classical case of lying to your shareholders.
Sincerely,
MMM." |
