Gambler, Here is a question for the conference call:
"Where did the money come from? Also, explain the wisdom behind the timing of the expenditure?"
We all know that TSIG is in the midst of a major cash crisis. As of 3/31/98 accounts payable including substantial obligations to the IRS for failure to pay payroll witholding taxes totalled a staggering 7 number fiqure. Available cash on hand only 82k....1st qtr. operations based on the 10Q indicate that the company is continuing to consume cash due to losses at the rate of $150k per week just to keep the doors open and sustain basic operations.
In the midst of this cash crisis environment TSIG entered into an agreement to provide $2,250,000 in cash to CCI. Based on the interview with Darrell Piercy CEO of CCI with Vista Quest it is apparent that CCI will need this cash since the advertising budget for 98 has been established at $2,000,000.
On May 1st Robert Myers and Tom ? interviewed Mr. Piercy and posted the highlights of the interview on S.I. (post # 619) In the interview Mr. Piercy stated "I also will recieve a significant advertising budget for the promotion of CCI". It is apparent from this interview that these budgeted funds while expected by Mr.Piercy were not yet recieved as of the interview.
On 6/4 Gambler and Beebs interviewed Mr Gordon CEO of TSIG and posted the results of that interview on S.I. (post # 1015) During the interview Mr Gordon stated that the $2,250,000 obligation to CCI had already been paid. During the same interview Mr. Gordon also stated that the somewhat controversial loan of $5 million that he had agreed to make available to TSIG was not going to be needed by TSIG due to the anticipated raising of capital through the completion of a Private Placement of company stock sometime in mid-July.
In view of Mr. Gordon's statements it is apparent that at the time of the interview Mr. Gordon had not advanced any money to TSIG against the 5 mil. note. It is also apparent that at the time of the interview TSIG had not yet recieved any funds from the private placement that they were still working on. Mr Gordon stated that an immediate priority of the P.P. funds would be to pay off the IRS obligations that were still open at the time of the interview.
In light of the foregoing and in order to reconcile the statements of both Mr. Piercy and Mr. Gordon we must conclude that TSIG paid $2,250,000 to CCI sometime between 5/15 and 6/4.
Where did the cash come from to make this payment?
If the cash truly was available why would such a payment be made at the expense of postponing the crucial IRS obligations? Obligations that could result in closure of the company if left unchecked.
Why would such a payment be made when CCI had yet to fulfill its obligation to provide audited financials for TSIG's approval?
Why would such a payment be made between 5/15 and 6/4 when the funds were not yet crucially needed by CCI due to the delay of the web site launch?
From 4/1 thru 7/15 the date of the hoped for completion of the P.P. TSIG requires more then 1.5 million of cash just to sustain basic daily operations and this is without reducing payables at all. In view of such a real cash crisis and in light of the foregoing ask Mr. Gordon to please explain the wisdom behind making the $2,250,000 payment to CCI during the 5/15 - 6/4 period as opposed to waiting until after the P.P. was completed or at the very least until advertising expenditures were needed?
Respectfully, JAB
|
