Notes from the CC:
A lot of informaton given ... Drew was speaking much too fast to write it all down. Here's some of what I got.
First of all, Rhonda Windsor is gone! She is no longer being consulted - this was brought up in the Q&A session, it was one of the e-mail questions. I know it was a big concern for a few here.
Onto more pressing issues, based on the overall tone of the call IMO, the company has serious financial problems that are life-threatening. At one point, Drew stated (and not his exact words) that they could keep existing for about another six months if things stayed the way they are now. They need a serious cash infusion and are looking to partner with whomever they can.
Here are some bullet items from the discussion:
- the 10K is being held up for numerous reasons, one being they can't afford to file it. Another reason, going back to comments made in the previous CC, is that they let go all non-revenue generating positions, so the office workers that kept up the day-to-day books weren't around. It's taking them a lot longer to pull all the financials together - they need to get audited and it's been a very lengthy process.
- ACII probably going to pink sheets. Drew did not state this outright, but I think it's apparent to anyone who was listening that is what they have decided. He mentioned the cost of $200k+ annually to be a fully reporting OTCBB company, they just don't have the cash to do it. He does not like this as he likes the transparency of being a reporting company, but the current financial status has pretty much left them no choice. It will be a priority to get back to be a reporting company once the finances are in order.
- as for the state of LACC, they are still developing it at OrbitForm and as of today it is still not ready to be a sellable process. They continue to make progress and are currently testing different laser technologies. An issue he mentioned multiple times as a stumbling point was "depth of cut". Remember when hpobet was telling people that? Apparently, he was right, controlling depth of cut accurately is still an issue. Also, dealing with hardness variances in the metal needs to be perfected. He's confident that these issues will be overcome and they are building databases with the knowledge they have gained to date. As we suspected over the years, the reason this hasn't sold is that there was a flaw in the process and Drew once again confirmed that Marc, Ed and company did not develop it much past the point where test runs could be performed. Drew also mentioned oil pipe very briefly, it is still in the mix as a potential customer base but he didn't give any specifics.
- relationship with OrbitForm continues to progress. Merger being held up on two ends ... OrbitForm has debtholders that have agreements that prevent OF from merging with anyone. ACII has a debt problems to the tune of a few $100k that is also holding things up. There won't be a merger until these issues are resolved. Based on Drew's numerous mentions of the tough credit market right now, I wouldn't expect these issues to go away anytime soon.
- KSI has been barely operating at breakeven and given the downturn in the economy, my guess is they are not doing that now. Drew stated all manufacturing industries, not just automotive, are struggling big time.
- the new web domain is a result of the prior web developer ACII hired registering the americhip domain for himself. They are currently working on trying to get the old one back. For now, americhip.us will be used until they can get the old one back.
- they hired an attorney (Del Finley?) who has a lengthy history of working either with or for the SEC. He is going to be looking back through the TA's records for the past three years of transactions. They've recinded the Series A preferred stock, the TA can no longer issue any of these shares. However, what has already been issued will be tough to get back.
Here is some of the Q&A. Drew introduced John (forgot the last name) as the head of the SAG Advisory group, John compiled the questions from all sent to the new SAG e-mail address.
#1 - What's going on with the 10K? Answered in discussion section
#2 - Have the short term obligations mentioned in the previous CC been taken care of? Short answer; No. Drew said the creditors have been very accomodating re-negotiating terms
#3 - What is the status of OrbitForm merger? I put answer above in discussion section
#4 - When will LACC be ready for production run? He does not know, they need funding to move it to that point
#5 - How could HYGN get Marc Walther so fast when ACII couldn't? Short answer is that they were funded differently and had the resources to go after him when they did. Aside from funding issues, he said circumstances were more complicated at ACII.
#6 - Is Rhonda Windsor still involved with ACII? NO.
#7 - Will there be an R/S or share buyback? He'd love to do a buyback but financial realities dictate that of these two scenarios, an R/S is more likely. He does not have plans to do an R/S right now, but it could happen if needed.
#8 - When will ACII be profitable? He has no idea. It's a tough economic climate and the company still has significant baggage it needs to shed. IMO, not anytime soon.
They wrapped up with talking about shareholders getting together and coming up with ways to finance as they are in dire need. Contact the SAG e-mail ID with ideas/suggestions/etc.
Hopefully they post this on the website, there was A LOT of info and I've only captured some of it. Bottom line is things appear to be pretty grim financially and they are trying to work through all the problems the best they can. Given the tough credit/economic climates, it's going to be very difficult. |
