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Technology Stocks : Vari-L (VARL) -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (2531)	10/8/2000 12:49:57 AM
From: akmike	Respond to of 2702

Hi, Bosco-Thanks for your thoughts. The blank check comment was a question rather than a statement and meant to express the lack of information we have received and my fear of lack of board expertise. I don't want to give the impression that Pappas and his associates are out to fleece us, only that the information they have given is contradictory and incomplete. Vari-L is a small company, but one which has been on a path of high growth. The strength of the technology has been validated by a customer list to die for. It may be true, but I don't think that the only ones a competent Board could find to run it would be "crisis managers". As far as I know, KPMG was brought on board by Sherman, at least he was still the CEO when they arrived. I will give the remaining directors credit for Pappas; his engagement letter was addressed to a director who I believe is Kiser's sister (could be mistaken here, as I am operating entirely from memory). You ask: "Should VARL have no BoD at all?" It is essential that the company have a fully-functioning, knowledgeable BoD. My preference would be that at least some of those members were not tainted by involvement in the mess, blessed with a strong business background, and answerable to all of the shareholders. Would it be a concern if Mr. Pappas packed 7 of his people on the board? Absolutely. It would be of concern to me if Mr. Pappas put even one person on the board. After all, he is a consultant, being paid by the hour, with no investment in our company. Is there a reason to misguide the shareholders to the downside at this point? I don't know. I have speculated that the agenda is to attempt to distance the remaining board members from liability. This is speculation, and even if it turns out to be true, would probably not be effective. It seems to me that there is a possibility that the Nasdaq listing could have been defended more effectively, at least until the KPMG revised statements are published; the write-off amount could have been delayed until better data was available and a fuller explanation forthcoming; the bank relationship could have been handled better; (Why was the remaining unused credit formally cancelled prior to receipt of KPMG statements? Presumably, the loan agreement has provisions that further amounts could not be drawn while the loan was in default.); when the press release was made informing us of the amounts of the write-off, 2nd Quarter revenues had to have been known. If they were bad, how much worse could they have been than the write-offs? If they were good, why couldn't they have offset some of the bad news? Either way, why release some data and not some other data? My theme is not that Pappas and his associates are trying to fleece us, but that the folks who hired them and direct them may (in spite of their best intentions) be simply incapable to lead us out of this mess. As to my sending my concerns to Mr. Pappas, I have had a call into him for several weeks, which, to this date, remains unanswered. Thanks for sharing this dialogue with me. By raising these concerns in this public forum perhaps we will get some answers from those in the know. Best, Mike