Scott, Jim,
I had a long conversation with Alon earlier this week. I'll try to accurately summarize the conversation here. I suggest that both of you call Alon directly.
1. As most of you know, it is extreamly rare to find a company that will respond directly on SI. Alon indicated that they would not participate on SI. I asked him if QDRX would consider responding to SI through a single point of contact, myself or someone else on the thread that would field questions from the group, and present questions on a bi-weekly basis. Alon indicated that might be possible but would have to check with their legal council.
2. Alon stressed that he is available to shareholders. If you want information, call him. He says that he returns all calls, usually the same day.
3. We discussed the dissemination of misinformation on SI. Both positive and negative misinformation.
4. Decisions regarding issuances of press releases come from a higher authority than Alon. He is the messenger. Its pointless to shoot the messenger.
5. All management personnel are currently working. They all have not been paid for the past three month. They are hopeful that QDRX will come through the current financial problems and they will be made whole either through direct payment of back salaries, stock, or some combination.
6. The company has no long term debt. They have current debt to vendors.
7. They are examining several options. They are trying desparately to avoid Bankruptcy, Chapter 11. If Chapter 11 is filed, shareholders will get nothing.
8. One option they are looking at is abandoning efforts to penetrate the sporting goods industry. They recognize that they have failed to establish a sufficient penetration in that market. Go back to selling raw material to manufacturers who make the products. Or maybe shut down advanced materials altogether.
9. With the price of the stock so low, the vultures are coming out. This presents more opportunities for financing than they have ever had. It's like a distress sale. Alon described it as needing an infusion of capital (his words).
10. Will they survive? Should know in a month.
11. Victor is profitable. Next year revenues projected at $25M. Net profit $1M.
12. Advanced materials technology has value.
13. The reason for the lack of information released is that there has been nothing to report.
That's about it for my notes from the conversation. Jeff Rainey has mentioned that he's out $15K. That makes him four times smarter than I. Or maybe I'm four times dumber.
My read on Alon is that he still believes in the product, and believes that they have a reasonable chance of surviving.
I believe that the reason for the lack of press releases is they had no good news, and didn't have the balls to tell us how bad it was. It was obvious to them, and with the bashing on SI, it probably didn't seem necessary to confirm the financial straits they were in.
It is easy to Monday morning quarterback and say that they should never have attempted to get into the sporting goods product manufacturing business. They didn't realize the difficulties involved, and should have stuck to making and selling the raw materials.
Hope this post helps.
Roger |
