Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Tri-Vision & The V-Chip -- Ignore unavailable to you. Want to Upgrade?

To: trenzich who wrote (2972)	6/3/1998 1:51:00 PM
From: Louie Romano	Read Replies (1) \| Respond to of 5743

Trenzich... Has it occurred to you that Carswell doesn't feel you are worth responding to? If any TVL followers need information on any subject and don't know where to start... sent me a note and I will guide you.

To: trenzich who wrote (2972)	6/3/1998 1:58:00 PM
From: D.E. Shetland	Read Replies (2) \| Respond to of 5743

You clearly have not read the latest registration statement and I suggest you do. To make it a bit easier for you. 1) I suggest you check out Mr. Thomas Akin of Talkot Crossover Fund. In case you didn't know, he's on the Board. Also, you should find out who really owns the shares in Alternative Investments, Ritchie Capital and Corsair. Insiders are selling shares they bought no more than 4 months ago at substantially lower prices. Now, here's another point for you to ponder, since you seem to like numbers. Would you agree that one should not pay much of a premium for a closed-end fund, especially one that is in need of a continuing future cash injection via share placements and one that can be replicated with profitable pulicly-listed companies by oneself? If so, let's look at how ACRI values it's investments. These are all based on the latest transaction's reported and ownership position's reported. There's certainly some fishy going's on (selling shares at high prices and buying them back etc...), but that doesn't affect this analysis. Basically, ACRI is a venture fund with a bit on money management tacked on. So let's value it like they have, since they know far more about any of these investments than we do (or at least I hope they do). SOUNDVIEW: They currently own 66.7% and the latest transaction secured 15.3% for $1.2mil. Both the buyer (ACRI) and the seller (the founder) value the company around $7.8mil. ACRI's ownership based on their own valuation is worth $5.2mil. MERCWERKS: Follow this one. They originally invested $100,000 for 100% of the company, then immediately sold 30% for a gain of $119,551 (cost base 30,000). That would have valued the company at $500,000 --this for a company that hasn't developed anything yet and has no revenue and is a cash drain. Then they bought back 20% of that from the same party at a different valuation. Bottom line, using last transaction, their 89% ownership is worth a rather dubious 450,000, but we'll give them the benefit of the doubt. COMBIMATRIX: Latest trade increased their ownership and valued the company at $3.2mil. They own 66.7%, equal to $2.1mil. GIT: Another follow the bouncing ball. Once again buying and selling from the same shareholder (undisclosed) at varying prices. Bottom line, the bought 3.31% of the company, valuing it at around 7.7mil. Their 33% ownership is worth 2.54mil. Interestingly, they have no income or product and their original price valued the company at no more than 3mil. Wow, doubling your money on a loser based on internal valuations --not bad. I actually thought PW was a good accounting firm --oops, didn't they work for BCCI, or was it Cendant? INTERNET: That's easy, they bought 25% for 2.5mil (quite a steep valuation for a company with nothing). WhiteWing: Easy too. Public value of 18.6% is worth $800,000. MONEY MGMT: I did find out that they had $20mil under management last year (boy their fees must be really low to only show quarterly fees of $30,000). In either case, at 4% of assets it's worth less than $1mil. Tally that up and you get a grand total of $14.5mil. Add whatever cash you want (although they do have a few promissory notes out to their subs), net the debt out. Don't forget all the future funding and dilution since there's basically no earnings in this baby and that means this closed-end fund, with a market value of close to $80mil is trading at one monstrous premiuim based on the values the owner puts on their investments. No matter how you skin it, this basket of crap ain't worth 4x the company's own value. No wonder they want to issue as many shares as they can. There are plenty of public, profitable alternatives in each area of business they're in, so no one should pay anything more for their bag of crap. Follow me tz, or did you forget to read the details in all the filings?

To: trenzich who wrote (2972)	6/3/1998 3:20:00 PM
From: D.E. Shetland	Read Replies (2) \| Respond to of 5743

Oh, by the way, the details of the "illegal act", as you call it, of the accountants being paid with warrants is also detailed in the statement. Either you're wrong or Mr. Finnochiaro is in trouble. Even if it's not illegal, it sure smells funny. Any accountant paid for with shares should be looked at askance in my opinion.

To: trenzich who wrote (2972)	6/3/1998 6:10:00 PM
From: D.E. Shetland	Respond to of 5743

Responses to your TVL questions: I couldn't find your exact questions, but get the gist of them. 1. You keep harping on about some statement in the annual report. The facts are, they have licensed TC's technology which is proprietary and is "Tim Collings V-Chip Technology - V-Gis". They have never claimed it will be the only one. It is simply one of many approaches. The patent is help by CVC and they have filed all the applications. One can hold a patent while it is pending approval and a company will typically rely on outside counsel to do all searches and infringement opinions. yes, they can be incorrect. But if something were blatant (like Acacia would lead you to believe) there is no way any reputable firm would issue an opinion on it. As with any patent, one can only have opinions on published patents, not on pending patents. The risk is there is something in the pipeline. TVL, in the annual report and all prospectuses they've filed, has always been very clear on this. If one quote was misleading, SORRY, but don't take that one quote out of the numerous factual representations TVL has made as to the CVC/TC technology and patent issues. Further, their licensing agreement is thoroughly dependent on the issue of a patent. If it is not issued, TVL will not pay for it. Further, most of the payment is in royalties off sales based on certain targets. I guess you and Acacia are about the only people who think there is some airtight monopoly being created in the V-Chip space. TVL has never represented that, only Acacia --who better hope they can fool some licensee because they have no hope with an actual product. 2. IP values are typically related to their potential economic life and whether there is any potential income attributable to it. If you think that every company that spend's money on R&D, some of which is IP, needs to write-off the investment immediately, then so be it. TVl has spent quite a bit of money on development over the years and expensed much of it. The capitalized value of IP will surely be amortized or written-off if there is no realizable economic potential. However, given that all cable companies have to provide a decoder box under CRTC law to every subscriber and TVL sells to all of them and worked with the 2 majors perfecting their system end-to-end, you can make a rather easy case that there is realizable economic value to the IP. Also, as part of the last underwritting, they realized a need to strengthen the CFO role (and they recently hired someone) and hire a larger accounting firm. They were requirements from the Canadian institutions that invested. The question to answer is why would anyone pay more than ACRI pays for the same stuff they own. They know more than you on the value of the company's investments. 3. Insider selling: Canada is much like the US where it has to be filed and reported. It's all listed. Look it up. I recall that the bulk of the selling was 2 officers. One sold a reasonable amount of his holdings (and was almost fired by the CEO for it). I think it was done over a few months with prices from .50 to $4.00. Those were evidently for personal reasons I'm told. The CEO sold a miniscule portion, 8,000 shares at $4 (leaving 9mil) and the other officer 200,000 or so around 3 to 3.50 (leaving 7.3mil). Given that their financing took so long because of market conditions, I assume they were pretty stretched for cash. I believe they said the CES show, where they debuted the Samsung/TVL V-Chip compliant TV cost in the area of US$600,000. I think they had a credit line too, but probably thought it was cheaper for them to sell a few shares to lend money to the company. As for the real estate, I don't know if they're selling it or not. The company in the past was too small to own real estate so they leased it at pretty cheap rents from some officers. Given their ownership in the company, they would have a much larger incentive to cut the company a good deal. They have said that the rent is actually below comparable spaces nearby. Given that they only needed 6-7 million of working capital to ramp up production and the capital raising was for12 or so, I guess they are over capitalized. Maybe they'll buy the building, I don't know. But surely if they do, they'd be fools for doing it at anything other than fair market values and it would surely be scrutinized highly. No matter how you keep trying to sully TVL (fine, they deserved to be criticized for dragging out the production process), they are not trying to deceive people at all. These guys are ex-defense engineers who are very educated and hard working, who pooled their money together to start a company to manufacture IR equipment for cable companys and refurbish old cable equipment for sale in emerging markets. Shaw Cable, who backed TC's research, told him to use TVL because they can commercialize the tech, manufacture small electronic items cheaply overseas, and combine their IR technology to make it a user friendly device. No matter what you say, look at the simple fact that the managers of the company still own the majority of the equity BY FAR. Their interest is directly aligned with any shareholders --maximize the value of the company by being the first to market with a device and make it very consumer friedly and distribute it with mighty partners and incentivize them all. They stand to loose sooooo much more by any shenanigans like you try to insinuate. The risk is in the product acceptance, not the silly little things you keep bringing up. So, now it's your turn to answer the questions. 1. Why doesn't the management of ACRI own much in the way of stock? Why do they keep issuing free options to everyone and his brother? 2. Why would anyone pay a ridiculous 4x more for the same equity that Acacia values at no more than $20million? Given the continual need for cash and the extraordinarily risky business plan they pursue, it should be at a substantial discount to account for future dilution and all the low priced warrants and options out there. 3. How could they sell shares in Merkwerks for 5x more than they bought them in less than a few months? 4. Why does Acacia always sell some shares at higher prices than the original investment (even after there have been substantial equity issuance) and then buy them back from the same people at higher prices, using shares of course? 5. Who is this mysterious Mr. Ching that buy's and sells and owes money to the company? 6. Isn't it a little suspicious that there are very few outside Board members in any of the company's and that the management of Acacia is ususlly also the management of some of the investee companies. Perhaps that's where all these generous "consulting fees" are going? Let's hear it TZ.