Folks: I want to thank Beaverfever for all of his DD which allowed me to compose the letter. I also copied info from Cinsco. Again, thank you. I'm also sending along the "tweeked" copy of the letter I also sent to Mr Selig @ Siskinds (as I believe it is important they are advised). This is also the revised version I sent to Mr Krystie at the OSC. It has just a bit more info in the letter. I'm humbled that people want to use this letter as a basis for a petition, and I'm all for that.
I feel certain the petition will be a good thing. Many of the people watching this board who haven't done/said anything may now find they can contribute to the cause by simply forwarding the petition on. Even if people choose not to sign it, at least they will be made aware of the wrongdoings of VRS.
There are people on this board that are way more knowledgable than I, and to that I would suggest what kidl has already said...please put down your ideas...and let's make this work.
As an offside to this...someone earlier mentioned they didn't know how to copy/paste. For those that want to copy/paste this letter, do the following: Highlite what you want to copy.
Hit the CTRL (control) button and at the same time hit the letter C. (You've now copied and the memory is stored till you paste it). In order to paste ....place the cursor to the spot were you want it copied in your message and leave it there. Now hit the CTRL button and at the same time hit the letter V. (You've now pasted). Hope this is of assistance to some.
Dear Mr. Krystie:
Re: Your file 20090923-8840
With reference to your investigation regarding Allen-Vanguard. Please be advised that a large group of shareholders have presented our grievance to the Law Offices of Siskind’s and a “Class Action Suit” on behalf of the investors has been filed.
Please be advised that we do not plan to wait for the Class Action Suit and believe a criminal investigation should be launched against the company Allen-Vanguard and it’s CEO David Luxton.
There are many reasons to launch an investigation. Some of the reasons are as follows:
1.There are a lot of people watching what happens. IF the court approves this purchase as an alternative to CCAA who will be next? We guarantee there will be a flood of copy-cats, and corresponding lack in market confidence.
2. Have Allen Vanguard open their books. There is absolutely no way that Peter Allen's numbers will be validated by an external audit. Allen Vanguard has over inflated it’s impairment charges by 550 million dollars in less than one year. That amount translates to roughly $4.33 per share. Allen Vanguard effectively dealt away 80% of the company’s main assets in less than a year. An independent valuation by an unrelated 3rd party which would evaluate assets, not only on their present value but on future earnings potential should take place. Allen-Vanguard advised of substantial staff layoffs occurring August 12, 2009 (57 employees), yet no substantial material change was reported. How can Allen-Vanguard make the claim that they are increasing their Research & Development by 263.5% ? A forensic audit would discover accounting improprieties.
3. David Luxton hopes to compel a judge that it is in the best interest of the Government to allow this transaction to complete based on "expert" asset valuations. David Luxton will be discounting shareholders input as wanting to see an
Allen-Vanguard "Scortched Earth" due to our losses, and discount our submissions.
4. Allen Vanguard is attempting to sell the corporation to an American investment firm. The problem is that they did so by negotiating behind closed door in silence exclusively without announcing proper material changes. When you look back over the last 6 months they were obviously writing-down assets setting this transaction up and now claim they don't have to follow proper securities or Corporate Governance and allow shareholders to vote. They claim the deal doesn't cover the liabilities, therefore they have cancelled the shares without any compensation. Many small investors have invested relying on proper Corporate Governance, and press releases claiming the business was a going concern announcing sales, and making optimistic statements. When the Tailwind financing fell apart, a press release advised that they entered into “exclusive negotiations” for a three week period of DD, and shareholder approval would be sought. Six months later they make a press release on a Saturday 12Sep09 that the deal is done and shares were cancelled. This company has benefited from large sums of Canadian tax payer money to develop its products, and now has given those developments to an American controlled company at a price well below its true value.
5. To see the heavily redacted Schedule A, go to www.sedar.com. Type Allen-Vanguard in company name, set the from date to September 21, 2009, click search, click on the big file (734 K). This is the apparent financial breakdown of the deal - why would they want to hide that? Why is Schedule A of the Versa deal 100% redacted on SEDAR?
6. Is Ms Monica Ryan, EDC's Compliance Officer related to Robert Ryan, Allen-Vanguard's Vice-President Corporate Development ? Can this deal actually hold together if EDC rules there is a conflict of interest or ethics compliance ? EDC’s former CFO, Peter Allen was hired by Allen-Vanguard less than 1 week after signing an “arduous financing deal” with RBC. Why then did Peter Allen ask EDC for new financing AFTER Versa needed acquisition funds?
7. The Ottawa Citizen’s claim that Versa is putting up capital can’t be verified, as the rumours are that between EDC and the rest of the lenders – no new capital is required (unless you call Versa signing the EDC loan as “capital”.
Can anyone please explain how a company in such “dire straits” as Allen Vanguard claims is able to be bought by a US buyer when the buyer doesn’t even put $1.00 cash into the deal?
8. "Back-door" documentation permits Allen-Vanguard to buy-out (BUY BACK)Versa within 12-18 months at cost plus a small premium.
9. Bypassing current bankruptcy laws by requesting court approval without public disclosure of valuations.
10. Management increases research spending over 250% in year prior - with no new product or service announcement.
11. Med-Eng acquisition valuation is questioned as inappropriate, Allen-Vanguard management did not perform due diligence or obtain performance guarantees from vendors - David Luxton received significant bonus compensation for consummating the purchase of Med-Eng. In 2007 David Luxton made in salary $330,138.00; in bonuses $3,298,250.00; and annual compensation $9,690.00. That's over 3.6 million dollars. In 2008 David Luxton made in salary $379,881.00; bonuses $1,500,000.00; annual compensation $8,123.00; and in Securities under Options $604,000.00. That's over 2.5 million dollars.
12. Canadian Government grants and subsidies used to develop licensed Canadian products will be in control of a foreign private corporation. While jammers sales have declined, EVERYTHING ELSE is increasing, look at the last financials. HMS, and Med_Eng bomb suits are world leaders in their divisions, and have excellent growth. The developing SAIC relationship with CBRNE has many hundreds of million dollar contracts potential. The order book is not reported in the last financials, however for the past several quarters it has maintained an average value in excess of 100 Million dollars - no reason to believe it should be different now... maybe the CEO/CFO just "forgot" to put it in the financials this time?
We await your investigation.
Respectfully,
(iaden) |
