Let me see if I've got this right:
1) June, 1999; Private placement for $10,000,000
2) Increase in revenue of $22,600,000
3) 804% increase in revenue
4) Net income $2,800,000
5) Sales going good for Q1: As per Hank Kaplan in March 23 conference call
6) Now we are broke, and if they don't get money on acceptable terms, and they might not continue as a viable company.
7) Reconvened annual meeting so they can fund up to 100% of outstanding shares at $1.00 per share which is 50% of last years issuance.
8) Last year when we voted, they already had the $10,000,000 secured and we were voting to agree, this year they don't have anything and the money they need is not secured nor identified.
And then according to the proxy:
Not only did management borrow $1/2 million of shareholder funds from the company, but were guaranteed minimum bonuses of 25% of their annual salary of approximately $200,000 and in addition, approximately $3000 per month for automobile, insurance, and non-accountable business expense reimbursement.
From the May 5 press release, >> NewKidCo's exclusive North American distributor, Mattel, Inc., publicly announced last month that it intends to sell its software business and that Mattel Interactive will be treated as a discontinued operation in its financial statements effective March 31, 2000. As a result of this announcement, NewKidCo has decided to set up a reserve of approximately US$4,000,000 to account for possible pricing offers that Mattel may choose to make to its customers. NewKidCo is currently evaluating a number of domestic distribution alternatives, which NewKidCo anticipates will be beneficial to The Company while retaining access to the retail channel. NewKidCo anticipates that new distribution arrangements will be in place during the second half of the year to coincide with the planned release of NewKidCo's new titles currently under development and the traditionally strong holiday selling season. NewKidCo has hired a representative to secure international distribution agreements, where appropriate, for distribution of its products outside of North America.<<
Richard Rabins sites Mattel's announcement as the cause of the current problem.
So now we have Mattel(with the special warrant take over clause and biggest shareholder) sitting there like a Chesire Cat (with Amy Boyland;Senior Vice President Mattel Interactive (NYSE:MAT), now sitting on their Board) waiting for these guys to go under so they can buy them as an asset sale and appear to be the White Knight Savior for the shareholders.
The politically correct Barbie now has a new playmate in ET.
It appears to me that along with alleged stock fraud we could have possible undue influence from Mattel.
And some here don't find any fault with this management.
Too much for me, I'm out of here.
Good Luck,
Jim |
