Timba,
From form 10Q filed 10/16/00:
(12) Unearned Revenue
During the quarter ended August 31, 2000, the Company received $43,874
from a customer representing prepayments for future product shipments.
The prepayment has been recorded as unearned revenue and is included in
accrued expenses and other current liabilities on the accompanying
consolidated balance sheet as of August 31, 2000. The Company will
recognize the revenue as product shipments are made.
For the nine months ended August 31, 2000, the Company exercised its
option to convert Shintom debentures into shares of Shintom common stock. The
Company then sold the Shintom common stock, yielding net proceeds of $12,398 and
gains on the sale of investments of $1,850 for the nine months ended August 31,
2000, respectively. For the three and nine months ended August 31, 2000, the
Company also sold 100,000 and 200,000 shares, respectively, of CellStar common
stock, yielding net proceeds of approximately $271 and $852, and a gain, net of
taxes, of approximately $70 and $333, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position at August 31, 2000 increased $55,059 from
the November 30, 1999 level. Operating activities provided $60,630, primarily
from a decrease of $24,217 in accounts receivable and an increase in accounts
payable and accrued expenses of $31,425, partially offset by increases in
inventory of $13,626. Accounts receivable days on hand decreased to 42 days at
August 31, 2000 from 47 days at August 31, 1999. Inventory days on hand
increased from 28 days last year to 33 days this year. The increase in inventory
value and days on hand was primarily in the Wireless Group. The increase in
accounts payable and accrued expenses is primarily due to $43,874 received from
a customer as a prepayment for future product shipments (See Note 12). Investing
activities provided $5,160, primarily from the sale of investment securities
From the PRE14A proxy statement:
On May 9, 1995, we issued warrants to purchase 1,668,875 shares of Class A
common stock at $7.125 per share. The warrants were issued to the beneficial
holders of approximately $57,600,000 of our debentures. The warrants expire on
March 15, 2001, unless sooner terminated under certain circumstances. In
connection with the issuance of the warrants, John J. Shalam, our Chief
Executive Officer, granted us an option to purchase 1,668,875 shares of Class A
common stock from his personal holdings. The option from Mr. Shalam is only
exercisable to the extent a warrant holder exercises its warrants described
above. The exercise price of this option is $7.125, plus an amount intended to
reimburse Mr. Shalam for the tax impact, if any, should the exercise of this
option be treated as dividend income rather than capital gains to Mr. Shalam.
During 1998, we purchased approximately 1,324,075 of these warrants at a price
of $1.30 per warrant. In connection with this purchase, we cancelled our option
to purchase 1,324,075 of Mr. Shalam's shares. As of November 30, 1999, 344,800
warrants remain outstanding and we have a corresponding option to purchase
344,800 of Mr. Shalam's shares.
You might want to have a look at the 424B1 filed 2/4/00 where the President and CEO
was the "selling stock holder" to the tune of 1 million shares. Related party
transactions in the same filing is also interesting. It seems the CEO's little
private companies receive approximately $1.7 million a year in rent from the company.
Also mentioned in the proxy filing, there's a new bonus program where
a number of directors receive a total of 6+% of pretax earnings exclusive
of "extrodinary items" as a year end bonus.
Let's add it up real quick. The CEO gets a bunch of free stock which dilutes
shareholder equity and sells part of it to the public for $45 million. He sells
warrants to the company for around $2 million and the company cancels the options.
The numbers get padded, but one time charges don't come out of the bonuses. The
more the books are cooked, the more he makes. His share of the pretax bonuses
comes to about another million. Then we add in the $1.7 million a year in rent.
The bottom line is I wouldn't trust this man as far as I can throw a bus. If I
found myself in an elevator with him, I would keep my hand on my wallet until
he got off. And I sure wouldn't buy stock in his company.
Last post on VOXX. I've already spent considerably more time researching a
company I would have automatically rejected as a suitable investment in the
first 10 minutes of looking. It's those "red flags" I spoke of. The pattern
is always the same and it tends to make me cranky to see that kind of abuse
of fiduciary duty. |
