Lets review again and give input....
John S. Baker (652 )
From: John S. Baker
Tuesday, Feb 10 1998 9:35AM ET
Reply # of 2009
(Long message) Annual meeting notes. To make sense, this *must* be interpreted *after*
reviewing the audited figures for the fiscal year ending 7-31-97 and the unaudited results
for the quarter ending 10-31-97. If you don't already have this info, get it from the
company.
Meeting yesterday attended by perhaps 60-70 shareholders. This was the company's first
real annual meeting and the first with audited results. My general impression (admittedly
very subjective) is that Don Cameron (President) answered all questions in a frank, open
and forthright manner, and showed some clear thought processes on the *hard* questions.
Company is on the verge of becoming profitable, and he pointed out numerous times that a
profitable company faces different challenges than a non-profitable one.
First contentious issue was over ratification of auditors. Company recently changed its
incorporation to Delaware, but used a Canadian auditing company and recommended
retaining same Canadian auditors for the current year. Don Cameron explained his
frustrations with the auditor's delays ... apparently the audit report slipped by several
months from the original target ... and noted that it is very difficult for a small
non-profitable publicly-held company to get auditors. The auditor might make $20,000 for
the audit, but if sued by a disgruntled shareholder, their defense costs would be far higher
than their fees. Shareholders present requested a counted-vote on the issue, which passed
14.7 to 3.5 (million). Don noted that there will be opportunities in the future to switch
auditors, such as when applying for listing.
There was a problem with people getting their annual reports and proxies. Company
established date of annual meeting based on anticipated delivery of audit. When that
slipped, it squeezed the notification time. Also, many shares held in street accounts require
assistance of brokers to relay info, with additional delays.
Question from the floor regarding expanding the Board. Board currently consists of Don
Cameron, his brother Scott Cameron, and Robert Wilson, all three of whom were
re-elected. Don explained that he used to have a larger Board, representing venture
capitalists and others, but that over time, people resigned and lost interest. Noted that it is
very difficult to get good Board members ... he doesn't want just a bunch of pretty names
... what he wants are people who can open doors ... and that Board Members generally
like to get paid. Fear of litigation drives off many potential Board Members. He will
expand the Board approximately concurrently with listing of the stock in the future.
Number of shares outstanding? Net, about 23 million out, with some additional in the
company's treasury, following buy back efforts. Don stated emphatically that NO stocks
were available directly from the company, and that when asked the company would refer
current shareholders to their market maker for best deal possible.
Explained earlier buy back efforts ... goal was to grow the company with minimum dilution
... while attempting to maintain a steady ... and slowly growing ... price for the stock.
Admits that they got hurt around the end of July and would not do it again, pointing out
that once profitable, they probably would have less *need* to do it again.
Apparently there are some very precise rules governing such stock buybacks ... especially
the pricing and the number bought back (as a proportion of the trading volume), and the
auditors reported that 7 or 8 of these buybacks were "not in compliance." His words were
"not *exactly* (in compliance)". Any liability is in the form of fines, and he used the figure
"$1,500" to suggest a range ... responding that the did not anticipate any lawsuits.
I'll continue in another message ... time permitting |
