Vari-L (VARL) Message Board

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Technology Stocks : Vari-L (VARL)

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To: akmike who wrote (2527)	10/7/2000 6:31:12 PM
From: bubbavan	of 2702

Mike: I agree with most of your analysis. I don't understand why the company could possibly have such huge write-offs in the area of property and equipment. One explanation is that Pappas and his buddies are agressively trying to drop the company's solvency position for legal maneuvering/chapter 11 purposes. The alternative explanation would be that they have built or purchased millions of dollars of equipment that either doesn't work as planned or is now not working/broken. I realize that it takes more the WD-40 to keep their assembly line going, but I really doubt that it is not functioning and of substantial economic value, especially since Pappas keeps insisting that they are operating as usual and shipping out product to customers. Who knows what the accounting people capitalized incorrectly, but the magnitude of the write-offs that management has mentioned in this area seem so far beyond what one would expect as reasonable. I believe a special shareholder meeting should be discussed, or we need to get management to open up to an investor committee to help provide technical/financial expertise to the board, which obviously is not overly qualified to turn a struggling company around, especially a high-tech company. I too am concerned about severance packages and ongoing committments to board members and former management. You raise a valid point about KPMG's fee agreement - is their a maximum, or do they have a "blank check". I still believe in VARI-L's products, their customer list is strong, and the company should be able to overcome its problems with Wall Street, as long as Pappas and his crew don't intentionally run it into bankruptcy to in some way protect the few board members or management at the harm of us shareholders. That would not be a wise thing for them to do.

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