I thought it would be worthwhile to revisit the list of questions compiled by this thread and sent to AB&G on 1/28/98. Below is a list of all the original questions (in slightly rearranged order) and AB&G's response to each question. Some of the answers shown here are direct quotes from AB&G. I listened to the tape of the conference call several times (rewinding pertinent sections repeatedly as needed) to assure that these quotes are correct.
MANAGEMENT:
Q. Is Greg Wilson planning on leaving AB&G?
A. No.
Q. Are there any other material facts associated with the recent resignation and immediate reinstatement of Greg Wilson that shareholders should know about?
A. The following is Wilson's response to the question from Mr. Sayle(?) with Alex Brown(?) regarding Wilson's position with the company and the recent press releases regarding management changes. Wilson: "There was an unfortunate press release that got issued 30 some odd days ago during the course of some internal negotiations that went back and forth. After the resolution of those negotiations was that I was going to stay with the company, and not just stay with the company but also become Chairman of the Board. When that was finalized, I did become Chairman of the Board and that was the press release that was made. I am very excited about staying with the company, leading it on in the future. I am interested in continuing to strengthen management of the company and we will be working in that realm over the next few months. I am going to build the company and I am not in any position of selling shares or anything like that. We are looking forward to growing this company up to the next level."
Q. If Wilson is planning on leaving, is finding a buyer for his stock the only issue preventing his departure?
A. Wilson is staying, therefore, question no longer applicable.
Q. If Wilson is planning on leaving, how much longer is it anticipated he will continue to serve as President and CEO?
A. Wilson is staying, therefore, question no longer applicable.
Q. If Wilson leaves, will Corky Logue become President of AB&G or will a search be conducted for a new President?
A. Wilson is staying, therefore, question no longer applicable.
Q. If Corky Logue becomes President, will his compensation continue to be solely from stock options or will he draw a salary?
A. Wilson is staying, therefore, question no longer applicable.
Q. How is Logue's option exercise price determined?
A. Question not addressed.
Q. Who determines executive and Board compensation? Is there a committee? Have any outside consultants looked at this issue?
A. Question not addressed.
Q. How are the "outside" directors chosen?
A. Question not addressed.
Q. What are the names of all members of the Board of Directors?
A. Question not addressed.
BUSINESS PLAN - VGMs:
Q. Previous news releases have indicated AB&G was considering all types of options for future investment. If Wilson leaves, will all options continue to be considered or will new management and two new Board members (Mims and Harrison) set a new direction for future investment?
A. No significant additional gaming acquisition until the political climate clears up in SC.
Q. Currently over 60% of our profits are coming from South Carolina VGMs. What action has AB&G taken to protect its investment in the South Carolina gaming industry? What action has AB&G taken to support the South Carolina gaming industry in general?
A. Question not addressed directly. Mims: "Six or seven thousand small businesses contacting their legislators on a daily basis." Orton: "We had higher than expected costs for legal and lobbying activities...for on-going legislative efforts in South Carolina."
Q. How many VGM's are "game room" machines and how many are "route" machines?
A. 700 VGMs (400 route machines, 200 in free standing casinos, 100 in bingo halls).
Q. How many VGMs does AB&G expect to have in operation by the end of the first quarter of 1998?
A. Question not addressed directly but they did indicate there would be no additional VGMs until the political situation in SC is resolved.
Q. How many VGMs are expected to be in operation by the end of FY 1998?
A. Question not addressed.
Q. Of the "route" machines, how many are 100% company-owned and how many are shared ownership?
A. Question not addressed.
Q. What areas outside of South Carolina (other states, Canada, etc.) are conducive to AB&G's gaming business? Which of these areas are being seriously considered?
A. Question not addressed.
Q. What percentage of AB&G's South Carolina VGM's would be characterized as requiring "a certain degree of skill", therefore, being less likely to be deemed an "illegal lottery" as claimed by the South Carolina Attorney General?
A. Question not addressed.
Q. What percentage of AB&G's South Carolina VGM's contain a "slot machine" and/or "keno" option?
A. Question not addressed.
Q. What action would AB&G take if South Carolina were to outlaw VGMs?
A. Question not addressed.
BUSINESS PLAN - BINGO HALLS:
Q. How many bingo halls does AB&G expect to have open by the end of 1998?
A. Orton (from his presentation): "If you take our total portfolio of halls today of 14, you add the 4 halls we are likely to acquire in the first quarter, that gets you to 18, then you add the 10-15 in negotiation that will likely be done by the first half of the year, you will see we potentially will be at 30+ bingo halls by the middle of this year."
Q. What areas (other states, Canada, etc.) are being seriously considered for expansion of AB&G's bingo business?
A. Texas, Kentucky, Alabama, and Canada.
Q. What is the status of the bingo halls which were to have opened by the end of 1997?
A. Question not addressed.
NASDAQ NMS APPLICATION:
Q. Will the recent decline in share price below $5.00 cause NASDAQ to reject BNGO's application for NMS listing?
A. Question not addressed but not relevant because application was not filed.
Q. Has an application for NASDAQ National Market System (NMS) listing been filed? If so, on what date was the application submitted to NASDAQ?
A. No. It will be filed after the 1997 audit is complete if the stock price is above $5.00 per share.
Q. NMS " Corporate Governance" criteria require two "outside" directors. Does AB&G meet this requirement? If so, what are the names of the Board members who qualify as "outside" directors?
A. Question not addressed.
MISCELLANEOUS:
Q. Can we expect to maintain 30% ROI on invested new funds as we have in the past?
A. Orton: "All of our pending acquisitions are targeted at a 2-4 times multiple of proven annual cash flows. So assuming that we can successfully find, analyze, negotiate, and manage these acquisitions we will maintain a 30% return on investment in the long run. However, because right now we are in the position of having so much cash on the balance sheet, this will likely dilute our return on investment until most of our funds have been successfully invested."
Q. Who filed the Form 144? What is their ownership position before and after the sale? Has the sale taken place yet? Why do they want to sell some shares?
A. Orton sold 35,000 shares "in the new year with the vast majority in early January" for "diversification and tax purposes". He currently has about 100,000 shares.
Q. Can AB&G provide any information on institutional investors who have purchased BNGO shares? Have there been any meetings or discussions with brokers or institutional investors recently and are any scheduled or anticipated for the future?
A. About 10% of shares are held by institutions. No information was provided about specific institutions.
Q. What is the current cash position on hand?
A. Orton: "Well in excess of $11,000,000."
Q. Our cash position is now approximately $14 million. What is the company's strategy in leveraging this amount through borrowing, leases, notes, etc?
A. Orton: "The company probably has no intention of issuing any kind of equity, debt, or other financing securities right now."
Q. When do you expect to announce 4th Quarter, 1997 earnings?
A. Mid to late March.
Q. In November, 1997, AB&G promised to create a section of the company's website devoted to addressing shareholder questions. This website "Q&A section" was to be updated approximately once per month. Do you expect to continue the website "Q&A section" idea? If so, when can we expect an update?
A. AB&G expects to do additional conference calls and potentially website updates after the audit is completed.
Q. Just prior to the press release of 1/16/98, it was reported on the SI thread that someone with Mike Fearnow's company, Financial Broker Relations, had said during a telephone call that the upcoming press release "will knock your socks off" and, after the press release, the "price per share will never again be below $6.50". Will AB&G clarify its relationship with Financial Broker Relations and how AB&G expects to have information released to the public?
A. Question not addressed.
Q. Has there been any consideration or discussion of AB&G as a CANDIDATE for acquisition by a larger company?
A. Question not addressed.
Q. Have any analysts (other than Mr. Kecseg) begun to follow BNGO? If so, who are they?
A. Question not addressed.
Q. The warrant call brought in about $12 million. Has there been talk of buying out Wilson or other stockholders with that money?
A. Question not addressed. |
