THRUSTMASTER 1,500,000 SECONDARY OFFERING PROSPECTUS RED FLAGS?
1. No mention of: Fujitsu (not even mentioned pursuant to RAGE 3D discussion under Prducts), NYSE:CU ref/ Driver's Education '98, T.E.N.-NROS and each of their respective and significant implications.
2. Risk Factors--1) 28% of revenues from Best Buy and Sams. 2) Potential Adverse Impact of Preferred Stock Issuance--"...The issuance of Preferred Stock by the Board of Directors could adversely affect the rights of holders of Common Stock. The potential issuance of Preferred Stock may have the effect of delaying, deferring ro preventing a change of in control of the Company, may discourage bids for the Common Stock at a premium over the market price of the Common Stock, and may adversely affect the market price of, and the voting and other rights of the holders of, Common Stock. ...Such provisions may discourage acquisition bids for the Company or could limit the price that certain investors might be willing to pay in the future for shares of the Company's Common Stock..." Futhermore, TMSR established a Classified Board of Directors, of which, "...Classification may may also have the effect of delaying , deferring or preventing a change of control of the Company without further action by the shareholders, may discourage bids for the Common, may adversely affect the market price of the Common Stock and could have the effect of discouraging certain attempts to acquire the Company or remove incumbent management, including incumbent members of the Company's Board of Directors, even if some or a majority of the Company's shareholders deemed such actions to be in their best interests..." esecurities was very vocal on this subject within this thread last spring and correctly anticipated/discussed precisely what is now a warning risk factor. esecurities understands shareholder value maximization precepts as hopefully does everyone on this thread. TMSR is potentially breaching said precepts at the potential and sole expense of non-insider shareholders and shareholder value, in general, in our opinion. The preceding two risk factors, in other words, could have the effect of severely impacting a bidding war takeover bid for TMSR, which is ultimately precisely part of what being public is all about. TMSR does not agree with this and what they have implemented could have the effect of locking in an incumbent management whom established a classified board and preferred stock provisions which are now clearly designated as shareholder risk factors and it is already too late to do anything about it. TMSR is paving the way for potentially establishing a good old boys club wherein the non-insider shareholders will be the sole victims of any adverse future performance.
3. Replacement option grants (this egregious situation has been discussed previously within this thread and should be noted is consistent with the implications of the Classifed Board and Preferred Stock provisions.)
4. C. Norman Winningstad is coming out of 300,000 shares going from 11.2% ownership to 3.3%. Why? This makes no sense esp. given how the street will perceive this move. Perhaps Mr. Winningstad knows something related to points 1-3 above. Will he be replaced as a Director?
And lastly, and not a risk factor/red flag:
"...The Company intends to supplement its internal growth through the acquisition of complementary product lines and businesses..."
It appears an acquisition will be announced by Q2, at the latest, in our opinion. Immersion Corp?
This prospectus is not upbeat, however, it is not supposed to be given its nature pursuant to the U.S. Government Securities and Exchange Commission 1933, 1934 Acts and Rule 10b-5. Nevertheless, we are concerned about the implications of the above as apparently is the street? We hope we are wrong. Kent Koski is out of the office until December 12th. Road shows? We wish him the best. |
