John, these are my distilled thoughts, without going back to the original source documents I have been reading. Those who fail to understand history are condemned to repeat it. But, the lessons of history can be used to one's advantage, once understood.
1. The curative measures implemented in late 1995 and early 1996 were forced by litigation and regulatory pressure, and were not voluntary. There were 5 class actions and one shareholder derivitive suit filed, along with an action by the FL Atty. General, and a regulatory action by the FTC, N.Y. Division. The FTC Consent Order is easily retrieved from the Federal Register (61 FR 38747), and contains a statement of facts. There are several incidental debt suits, libel actions, etc. Truly an incredible amount of litigation for a company with 26 employees. Again, the curative measures were a response to pressure, and not a voluntary recognition of anything.
2. The financing vehicles are of low quality, low visibility, and highly dilutive of the existing pupblic shareholders. The reverse merger with a no-asset public shell is faster and cheaper, yes, but it is also done without SEC or roadshow scrutiny. Only a notice filing on Form 8k is needed, and that is after the fact. Similar for the issue under Reg S. Doubts on the part of the foreign investors can be overcome by the conversion (dilution) sweeteners. Pluvia has it right on the float, the shares issued and outstanding, and the ultimate timing and effect of dilution from these debentures. (If we could somehow merge Pluvia's considerable intellect and experience, with Dorothy Simpson's wonderful temperament, we would have a perfect thread participant.)
3. There is no exit capability in this investment, in event of surprise. This is a bulletin board stock, and never has been a NMS stock (altho represented to be so on the SoftRAM95 packaging). On Friday, Sept. 29, 1995, Dan Dorfman panned the product, citing a National Software Testing Lab report (a credible testing service, but report paid for by Connectix, a competitor). Stock declined 11% ($2.00), that day, on volume of 459,000 shares. On Monday, Oct. 2, the stock declined 33.8%, or $5.00, on volume of 470,100 shares. THERE WERE NO BUYERS. The other elements in this memo make a negative surprise more likely, and there will be no way out.
4. The original product simply bordered on fraud. I read one review which deconstructed the code, and stated that the little dials which popped up on the screen to indicate the increase in available RAM, would indicate a 100% RAM increase, without the actual RAM compression portion of the code being activated. Would you make and sell a product like that ??? Character counts. There are four or five similar examples in the record I reviewed, going across the panoply of activities which constituted this business, and not limited to the software issue. I leave them to other researchers. Character counts.
5. None of the above means you will not make money on this stock, today, under present circumstances. However, I do not plan on being a shareholder when the enthusiasm wears off. I am not sorry I bought the stock last week. I am going to sell it to someone else before the Windrenalin product is released, maybe at a profit. This is just the exercise of my opinion, made manifest. Others disagree.
Finally, this has been the best thread, over the most intense time, in my admitedly short online experience. Many people appear to have a good grasp of parts of this story, and among them, I count Rod Macpherson and Pluvia 1. They are giving us their best work, and we dishonor that at our financial peril. Aloha and Mahalo, Thread. |
