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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: Joe Krupa who wrote (8025)	11/15/2001 9:11:07 PM
From: john.d	Respond to of 14101

Joe, 'DMX needs the money from Acqua right now to bridge a dry period - it's not pleasant or painless for the shareholders, but it is getting us there' I agree fully that even though it is causing us a lot of pain, it is providing access to badly needed money. 'We are drawing outside the original parameters of the agreement and it could likely derail the deal if Rebecca was to accuse Acqua, in a public forum, of not playing by the rules. If I were Rebecca, I think I would have given a similar answer to the question at the AGM. I also agree that we are drawing outside the original parameters of the agreement (a new floor of $4.25, which has been reduced further). To recap the financing, Acqua's core business strategy (as I understand and I’m open to be corrected) is very simple: To provide arbitrage financing. They are NOT long term institutional investors as some may have portrayed early on when the deal was announced. I also think it is pretty unlikely they are violating any TSE guidelines; this is likely an acceptable and very legal method of providing financing to companies who cannot access funds through other means. I do not know this for a fact; it just makes sense to me. In my view, the three Amigos would not be shorting so obviously, if they were breaking any regulatory rules. My question, is why the need to hide this, particularly when a shareholder specifically asked the questions at the AGM? I am always a fan of hearing the truth, no matter how much I dislike it. At least I can make better decisions with it and I would think most people would feel the same way. If in the end you are found out to be deceptive or less than frank, your own integrity is called into question. How can you trust other statements made by individuals who you believe have misled you? I would think that most financially astute organizations understand perfectly well Acqua's business strategy, so why not come clean and say here's the deal. Maybe Acqua does not want to jeopardize their own ability to market their services to other firms. If it is becomes common knowledge within the retail investment community that this is their business strategy, some firms might shy away from them. Then again, most firms that go to Acqua for money likely have few options. To protect their own business maybe Acqua has a clause that prohibits Becky from discussing the details of their business strategy (i.e.: 1) Company makes a draw, 2) Acqua shorts into the market during the draw period and 3) Acqua receives shares at a discount at the end of the draw……… and presto a nice handsome profit with minimal risk). Pretty nice business strategy if you ask me. From Becky’s perspective it might have been the worse of two evils. Do you announce publicly that you agreed to a financing arrangement that involved shorting the shares of your own company or do you try and sugar coat it and risk, when your shareholders figure it, your own credibility? Joe, I appreciate what you are saying, but I would have preferred Becky to take the high road and explained the deal right up front when it was announced and in particular when the shareholder specifically asked the question. Probably pretty naïve on my part to think someone could actually do that given the circumstances. Welcome to the world of high risk investing. John