Rick:We can argue legitimately only from facts and reasonable inferences-
I will try to deal with the thrust of your points. To avoid "putting mywords in your mouth" I will put your own words in your mouth. There is no special order in this since the arguments I make are not necessarily dependent. Therefore, convenience is the key to the sequence in which I address your major disputations.
Question/Issue #1
You asked, <<What is the "it" you are talking about?>>
My response:
The answer should be obvious. I was talking about BT and why it would not be likely to finance CCEE.
Question/Issue #2
You stated: <<"Now for the purpose of this argument you tell me that you assume that they have to go back and reinvent the wheel that they told me they started inventing in 1987, and have already succeeded in applying to the BT situation.">>
* * * * *
You said also:<< "You rationalize why they might need money to 'invent the wheel they told me they had succeeded in inventing' and I ask why? They had the money from the 240 Million shares they sold before they did a reverse split in 1994 to 60 Million shares AND they had the money from the 60-90 Million shares they have dumped since March of 1996 when they got authorization to issue up to 150 Million shares...">>
My response:
I think you are stretching to find an issue to debate me when you ask me to defend the issue of why CCEE has no money now, or why the dbExpress product might need funds in reserve in the event it has to be tuned and indeed, revamped.
Lets get a few preliminary matters straight. In what you call my disclaimers, I made it perfectly clear that as far as I know, the whole company could be run by crooks who have concocted an elaborate scheme to loot the treasury and flee to the Island of Bimini. I am not the lawyer for CCEE, I am not defending it in fact, and if anything, I am speculating but giving CCEE the benefit of the duty of good faith it owes me because I am a shareholder.
Rather, my intention when I posted my previous 3 posts on this thread was to offer to the other shareholders (and non-shareholder contributors to this thread)some viable alternative explanations to the negative and seemingly unsubstantiated inferences they were drawing from the combination of the SEC filings (that disclosed the proxy requests), and the drop in the price of the shares that seemed to accompany the SEC filings. My view was (and is), before we hang the management of CCEE without a trial, we should wait to see what this is all about. And while we are waiting, I thought it worthwhile to mention that in addition to the possible conclusions of doom, gloom, criminality and stupidity that some of the contributors here had drawn, other, inferences were possible, and even more probable. Therefore, while I could not refute the notions that there is a fraudulent scheme afoot, or that the members of management of CCEE are all dunces, I saw clearly there is also, from the narrow set of facts we know, a basis to conclude that perhaps CCEE's management is taking the correct path, and one that may benefit the shareholders.
You probably have not had hands on experience when a company launches a new product because you do not seem to perceive the problems that are likely to befall even the best products that were tested for years with great results prior to the first shipment. I need mention only a few examples. Xerox had conducted rigorous tests of its office copier series in 1965-1967. In fact, it boasted to securities analysts that it had made over 5 million test copies in the factory. However, during 1965-1969, Xerox spent as much on fixing glitches and defects in the machines it delivered, as it did in its R&D to perfect the process and come up with a paper path technology. Similarly, Microsoft spent 4% of the full cost of developing Windows 3.0 in fixing bugs that were later found after the system was delivered; and although the figures are not known to me,I believe it is common knowledge that Windows 95 also represented a huge "tweaking" expense to the company after delivery. Likewise, Apple spent a full year perfecting its laptop in 1995, and in 1996, was forced to recall them all due to heat problems. I could go on and use the best corporations in America to prove the point that after delivery, very costly efforts at tweaking, revamping, tuning and bug-fixing in a new product is not only expected--it is the rule. My own clients as both customers of new products, and inventors/suppliers of new products have, sadly, proved this rule many times.
Accordingly, my argument about CCEE seeking to create a "rainy day" fund and possibly using the authorization of new shares for that purpose was not based on anything particularity unique to dbExpress or any deficiencies I know about in the product. I actually know very little. Instead, I was positing that if CCEE anticipated the need to fix bugs or to re-do the product after BT took it (assuming there is in fact a real BT contract), CCEE would be prudently observing what usually happens whenever a new product is delivered.
Furthermore, the news and other announcements from CCEE that BT had integrated aspects of dbExpress already is not the same as saying a full utilization has already taken place. On the contrary, it seemed as if BT has selectively previewed and tried just a few features of the full dbExpress package, with others still untested. We all know that in a new car, the horn may work, and the wheels may turn when you tug the steering wheel, yet there still may be systemic problems that require major work. Using this logic, even if BT had great, trouble-free success with the portions of the product it "integrated". in my view, CCEE still would need a big reserve of cash after delivering the whole product because it is mandatory to have such an umbrella where the whole fate of the company may be riding on a successful first launch.
Finally, I join with all who criticize the way CCEE squandered its money in the past. However, that bad judgement is why the stock is at the penny stock level. If CCEE had not made serious mistakes this company would be selling at much higher levels, and I probably would never have become interested in it.
Question/Issue #3
You state:<<" That it [a big entity financing its own purchase from a small vendor] is done is established[sic.] The issue is should it be?... Your argument for why it should not be done is the profits and control aspects are not good. The problem with your argument as well as the experience bank you apply seems to be that of the old fashioned "zero sum game". This is not the game of "monopoly" Gary, we have moved into a new era where business schools are teaching and the giants are the first to apply the concepts of TQM and the need to out source and "partner" and the caveat don't eat your partners.... MY win-win is far less risky for the shareholders ">>
My response
Sorry, Rick, you have not identified the issue I raised correctly.
Neither of us have sufficient knowledge of the details and negotiations to even hazard a guess as to whether it would be in CCEE's best interest to float new stock or to allow BT to self-finance the alleged BT contract. Moreover, regardless of CCEE's best interest, we do not have a clue if BT would be willing to do it.
My point was that we cannot read anything negative into the tactic of CCEE seeking the authorization for new stock to finance the BT contract, if that is the reason for the new stock, since there appear on the surface very sensible reasons why it might do so.
Moreover, you did not heed a key element of my argument of why BT would not be able to convince its own shareholders to approve BT's self financing of the deal. Thus, your "win-win" argument fails to account for the fact hat if dbExpress turns out to be a bomb, how would BT ever get back the money it would have advanced to CCEE under your "modern school" of ant-zero-sum business relations?
Lets look at an example. Assume BT read your posts and suddenly had a yen to finance the dbExpress deal for CCEE; and assume the amount BT financed for CCEE was $10 million, that is, BT handed over the money to CCEE at the outset. (By the way, you asked where I got that number. The answer is that based on CCEE's financial picture, and its request for authorization of 150 million new shares, I estimated that those shares, if sold as a block to an investor that was to finance the BT deal, would be worth approximately $10 million. I used the average price of the CCEE stock during 1997, the impact of the increased float, the discount that the holder of $10 million dollars could exact, and the absence of substantial hard assets if dbExpress or the BT contract failed)
Suppose further that CCEE attempted to implement and get the program to work, but due to factors we do not know today, could never get it to work for BT. Is BT to just write off the $10 million and take solace in the fact that while it lost the full $10 million, guys like you would applaud it for rejecting the old zero sum game? I raise this because I do not see anywhere on CCEE's balance sheet, $10 million of assets that BT would be likely to accept as collateral, nor execute upon if CCEE defaulted.
General comment.
I cannot refute your allegations of fraud. I can argue though that you do not have a factual basis yet from what I have read. The point you press that there must have been a misrepresentation contained in earlier pronouncements about dbExpress' stage of development and accomplishments if CCEE needs to tweak or indeed, revamp it after it is delivered, at this juncture, does strike me as sound. As I stated above, the best and most pre-tested technology and products have, historically, needed vast sums of cash to perfect them, after delivery. If CCEE convinced BT to go forward with a contract, after a year of trials, it would seem to me that fraud in the dbExpress product is not a likelihood.
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