TO ALL: Here's PART of the respond from Randall McCallum to my questions. Warning, this is long....(Data News stuff in >
Reply from Randall H. McCallum to Dorthy Wei:
Dorothy. For ease of reference I will reply to this e-mail with the
information you sent me.
A few other people also sent me the Data News stuff. Maybe you could post
this for them to read to save me having to answer all the other e-mails
individually. It would be appreciated.
I'll go through the Data News Group information line by line and then
respond for your benefit to see how accurate they are.
>Date: July 15, 1998 1:11 PM
>Subject: Totally Hip Software
>
>Group Members:
>
>Below is the press release that we told you would come out this morning.
>Here is the link: newswire.ca
>
>**************************************************************************
>
>We have confirmed that Wall Street Journal will be running a very
>favourable article within the next week. They have had two meetings with
>THW representatives in New York and followed that up with a conference on
>Monday, July 13. Wall Street Journal is extremely impressed with THW and
>their products and pursued THW wholeheartedly for the interviews. A
>favourable article regarding a company such as Totally Hip Software in the
>world's largest Financial Newspaper will put this company on the North
>American map to stay. We strongly believe it is the best press that they
>could ever have. Look for this in the upcoming days.
The Wall Street Journal, People Magazine and about 100 other press
publications dropped by the Totally Hip booth in New York from July 8 to
11. We have had discussions with them, but I will not disclose the
details other than to say the Wall Street Journal informed us that they
were putting out a story about three companies and THW would more than
likely be one of them. (Keep in mind that they were impressed with us
winning the "Best of Show" award over the majors.)
When they put it out and what information it contains is a mystery to me,
since I don't work at the Wall Street Journal. My concern is they catch
wind of the leaks (which may come from many sources) it will delay it or
cause the story to be canceled. Since a trade show floor is not such a
private area, anyone at the show could have seen and heard what they were
saying the two times they dropped by our booth. As for private
discussions or conference calls, the information is confidential.
>***************************************************************************
>A revenue deal at least four times the magnitude of the Oregon deal will
>also be announced by Totally Hip within the next week or so. More on this
>in an upcoming issue.
The Oregon Deal is a state wide site license. Considering that this deal
is one of many in development, it is an accurate assumption on anyones
part to think that more deals will come which will be larger than the
Oregon deal. Oregon is not a state with that many people. There are many
states that are 30 times larger and I know that our eduction group is
working on other deals but the information will only be made public when
the deals are signed, sealed and delivered and the summer has an effect
on this.
>***************************************************************************
>We will also be issuing our stock price predictions for the next 3 month
>and six month periods on THW. This will be put out within the next 48
>hours.
Remember, these are their predictions, not the company's. This does not
mean they are wrong. We really don't have control of the buying and the
selling and stocks are a supply and demand thing.
>
>***************************************************************************
>*
>
>Totally Hip Software's stock has suddenly caught the eye of the
>instituitional investor. It was a good preview of what is lying ahead for
>THW in terms of institutional support. We hope many of you took the
>opportunity today to pick up a few shares as a delightful buying
>opportunity presented itself. Pay specific attention on what was mentioned
>upon in our last issue, as these developments are very close to surfacing.
>Since our New York trip we have had numerous meetings and phone calls with
>THW and are Privy to almost all information within THW.
We have had institutional investors buying (amount unknown as they don't
disclose it with us) and we have had and continue to have many
institutional representatives asking for packages and information on the
company. Institutional investors are generally very conservative, but on
occassion they are known to take risks with certain types of funds in
small cap, stocks and the Internet based companies are in demand. I don't
have the information on this and nor would I probably be made privy to it
by the institutional investor unless they inform us of the details.
>**************************************************************************
>We will be accumulating stock for the final day tomorrow, as we expect a
>considerable increase in the share price within the coming months, as such,
>we
>will not be caught on the wrong side of the fence with this one. From what
>we can gather, news in the Journal should be out very soon, and this major
>deal we touched upon yesterday will be announced next week. We will get a
>definate date for you on one or both announcements before the market
>receives it.
As mentioned before, any articles that come out, come out when they come
out. We do not have any control and nor can we guarantee the articles.
Perhaps these people know something that we don't. It is possible. Since
articles can have quotes from shareholders. Who knows? If and when it
comes out, I will be pleased. They are definitely right about the
exposure that it will bring to THW if and when it is released.
>***************************************************************************
>Just to touch upon this Suit filed against Mr. Aggarwal and his wife by
>THW. All Mr. Aggarwal's shares will be turned over to THW. His Escrow
>shares cannot be traded, all injunctions have been granted against Mr.
>Aggrawal, all his shares are locked up and cannot be traded by himself nor
>his Broker. THERE IS NO WAY HE CAN DISPOSE OF ANY SHARES INTO THE MARKET,
>we hope this calms your nerves about the possibility of these shares being
>disposed of or shorted into the market. It just will not happen. This is
>only positive news for THW and their shareholders.
>
>Click here for THW's response:
>http://www.newswire.ca/releases/July1998/16/c3264.html
Totally Hip and the five remaining co-founders filed a detailed lawsuit
against Rajiv Aggarwal and his wife listing about 27 claims. The main
ones include breach of fiduciary duty, breach of contracts, copyright
infringement, etc. etc. We tried to have these individuals comply with
legal agreements over the past year, but they seem to disregard the legal
system. When Rajiv Aggarwal was fired with cause (March 20, 1997) he
signed and agreed in a signed agreement to transfer 1,488,000 escrow
performance shares to the remaining co-founders. He also agreed to other
terms and conditions and most importantly he is still bound by an
Ownership and Cofidentiality agreement that he signed in March 1995 until
March 20, 2002. This restricts him from developing similar products or
technologies and forces him to comply with certain comnpany terms and
conditions. In late 1997, THW found out that him and his wife were
developing a childrens paint application. This is not allowed and since
we believe they are infringing our copyright and terms of the agreement,
we have been forced to take legal action.
After consider effort on my part and our lawyers part we found that Rajiv
Aggarwal was not willing to settle the issue unless we bowed into his
unreasonable demands, so we launched the extensive legal action on June
30, 1998 and we were granted legal injunctions on July 2, 1998 in our
favor. This material was prepared from January 1998 to June 1998, and
most of it during evenings and weekends so as to not cause delays or
problems with my efforts at the company.
We also were granted injunctions by the courts to have his assets, any
free trading shares, all his escrow shares, condo, etc frozen pending
outcome of the court action in British Columbia Supreme Court. This
ensures that he cant't sell shares, he obviously can't sell the escrow
shares regardless, and the other assets are frozen so we will be able to
claim damages when we win the court action. The evidence against him and
his wife is overwhelming. There is not much he can do to hurt the company
now.
My understanding is a number of shareholders are preparing their own
legal action against the Aggarwals. I am sure many shareholders will join
this action when they find out about it. Things don't look good for the
Aggarwals.
>
>***************************************************************************
>*
>We will have our stock price predictions on THW for Friday afternoon, as
>this will give our chartists and technical analyst and ourselves enough
>time to go over all the necessary information, along with another interview
>with the company tomorrow. We do not even report on a stock unless we are
>very convinced that it will triple for our members within a maximum three
>month time span. Suffice to say, we are extremely pleased at the
>opportunity for our entire group to get involved with this one.
Once again. Esimates and predictions are just that. I can say, the next 3
to 8 months will be better than the last 3 to 8 months. Whether this
turns into a triple in share price is up to market demand. Remeber, we
went from 40 cents to 90 in no time at all a few weeks back. A double for
some. It is probable again.
>***************************************************************************
>*
>We will be adding a one month target price, as well as a 3 month and six
>month target for THW. This will be out by approximately 1pm Pacific
>Standard Time tomorrow, July 17, 1998.
>
>
>
>For the benefit of all members we have postponed our price targets on
>Totally Hip Software until tuesday evening. We were unable to have a full
>meeting with THW directors and staff to find out exactly how many units are
>on order and how many contracts have been locked up.
>***************************************************************************
>*
>
>Secondly, although this court injunction is in THW's favour and best
>interest we feel this is pertinent information for the shareholders and we
>will have a much better grasp on the situation by Monday. This by the way,
>is the date that the settlement could and should be done out of court,
>which will be in THW's favour.
>Mr. Aggrawal has been FIRED WITH JUST CAUSE from his employer in the states
>and does not have much choice if any, but to settle with Totally Hip
>Software.
It is my understanding that the legal costs for Rajiv Aggarwal and his
wife will be in excess of $150,000, and since I have prepared most of the
legal material that Totally Hip will use as Plaintiffs in this action
against them our costs have been minimized. We will have affidavits from
many shareholders, employees, directors, etc. when needed and we have all
the material we need to prove our case in our favour. Their statement of
defence was one of the weekest I have ever seen. We will file a response
to it on August 21, 1998 in BC Supreme Court. It is prepared already.
>
>***************************************************************************
>*
>
>WE WILL HAVE THREE DEFINATE TARGET PRICES FOR THW OUT BY TUESDAY NIGHT OF
>NEXT WEEK. A ONE MONTH A THREE MONTH AND A SIX MONTH TARGET PRICE. WE ARE
>SORRY FOR THIS INCONVENIENCE, HOWEVER WE FEEL GETTING FACTUAL INFORMATION
>TO GROUP MEMBERS IS THE KEY TO OUR SUCCESS, AND AS MOST OF YOU KNOW, IN
>BUSINESS THERE IS ALWAYS DELAYS, ESPECIALLY ON THE PART OF THE COMPANIES.
>IN THIS CASE, CLOSING AND WINNING THE LAWSUIT, WHICH BY OUR ACCOUNTS WILL
>BE DONE OUT OF COURT.
We only considered the out of court settlement with the defendants two
and a half weeks ago at the request of a very large shareholder who
brought in a mediator. A number of large shareholders want us to have the
Aggarwals taken right through the court process to have them prosecuted
to the fullest extent of the law and not settle with them out of court.
Last week, Mr. Aggarwal admitted to a third party mediator that he was
still continuing to infringe our copyrights, and when we found out about
it, we stopped the negotiations immediately and decided it was a waste of
our time, so we will just pursue court action against him and his wife.
We have everything to win and nothing to lose. Rajiv Aggarwal doesn't
have any claims to our shares. The shares in question are the ones he
agreed to sell to the co-founders and the co-founders have the financial
clout between them to metaphorically crush Mr. Aggarwal in court to get
the shares they deserve.
>
>***************************************************************************
>*
>If you have any questions regarding Totally Hip Software over the weekend
>we will be glad to answer them at our earliest convenience. I hope many of
>you took advantage of accumulating more/some shares at today's prices.
>
>
>OUR ONE MONTH TARGET PRICE FOR THW IS $3.00 Cdn.
>
>This is primarily based on three near term developments:
>
>1) A one million dollar+ deal to be announced very near term
>
>2) An extremely favourable Wall Street Journal article expected this week
>
>3) Financing to take place at a minimum $1.50 Cdn. of which several
>Institutions have expressed considerable interest.
Yes, We are working towards a major financing. Many people have known
this for some time, since our plans are to expand the company and move
part of our operation to the US. The details and with who and when are
confidential. This is part of our plans for a US based listing and is a
process. Don't expect it overnight. It takes time.
>***************************************************************************
>OUR THREE MONTH TARGET PRICE FOR THW IS $5.75 Cdn.
>
>This is based on continued strong sales, projected earnings, new product
>releases and a move to the Nasdaq in the $3.00 minimum U.S. price range.
Once again. Esimates and predictions are just that. I can say, the next 3
to 8 months will be better than the last 3 to 8 months. Once we are
exposed in the US, there is no telling what can happen, but we don't
focus on this, we focus on the company and our industry progress. The
stock will look after itself.
>***************************************************************************
>OUR SIX MONTH TARGET PRICE FOR THW IS $7.50 Cdn.
>
>Based on concrete earnings issued at that time. The six month earnings
>estimate would give THW a P/E of approximately 5 times earnings, whereas
>most software companies Price/Earnings ratios are in the twenties or more.
>It is very easy to see that these targets are very conservative, as this
>company could conceivably be trading in the $15 Cdn range, $7 U.S. range
>within six months.
Once again. Esimates and predictions are just that. These indivdiuals are
in this type of business so they would know better than we would about $$
estimates. These are their estimates.
>***************************************************************************
>We are very impressed at the position THW has taken to strengthen and
>improve software development, putting the best products on the market
>forward before any promotion of any kind is done. Due to this we strongly
>feel that they have the firm foundations needed to compete in this highly
>competitive software industry.
>
>There is considerable demand from both U.S. and Canadian based Institutions
>to finance Totally Hip Software. Once the Canadian financing is done, it
>will pave the way for the Nasdaq listing and the U.S. financing to move
>into place.
They are accurate here. We firmly believe in a strong foundation and
there is growing demand for web design tools and we are no leading the
pack. In April, I took over as head of development and product design and
have one of the best teams in the industry. Brian Leeners became
President and COO and he looks after daya to day , sales, marketing and
admin. This is a very strong team with our other managers. Brian and I
get along great and we both have top notch teams. We have started to make
our moves to inform US based instituions about the company and we will be
doing road shows in the US and across Canada starting in September. We
now have a solid story to tell and the recent award has given
considerable credibility. So will our new product offerings.
>***************************************************************************
>
>WE HAVE BASED OUR PROJECTIONS ON TALKS AND MEETINGS WITH THE COMPANY,
>CHARTING TECHNIQUES, FUTURE EARNINGS, AS WELL AS CURRENT PRODUCT DEMAND AND
>PRICING.
>WE BELIEVE THESE TARGETS TO BE VERY CONSERVATIVE, HOWEVER THEY DO REPRESENT
>TO OUR MEMBERS THE POTENTIAL THIS COMPANY HAS, AND WHAT IT WILL DO.
Once again. Esimates and predictions are just that. These guys are no
different that brokerage firms. They all use similar tools.
>***************************************************************************
>
>July 22/98
>
>We have it under good authority that a settlement by Mr. Aggrawall and
>Totally Hip Software could be resolved tomorrow. We will inform our group
>first upon hearing the news. If a settlement occurs this will have an
>IMMEDIATE IMPACT on the stock price. We know of three institutions sitting
>on their hands until this issue is taken care of.
Last week we were very close to a settlement, but Mr. Aggarwal seemed to
have another agenda. When we found out about the underhanded nature of
his dealings with us, so we called off the negotiations immediately. We
feel it is better to go through the court process to get what we want,
since I believe we cannot trust Mr. Aggarwal in any settlement offer in
the future unless is is court restricted and governed.
>
>***************************************************************************
>
>Once this issue is resolved, there is no looking back for this company, as
>they have a number of deals, bundling agreements and positive media
>attention coming. Further to this, one or two financings are not far off.
We have a duty to our shareholders and the industry. We can wait for the
1,488,000 escrow shares. They aren't going anywhere. Imagine letting him
go to get these shares. Shareholders could accuse us of selling out the
company for our own benefit. Where will these 1,488,000 escrow shares go
when the co-founders get them from the exchange and the transfer agent.
They have been allocated to others within the company as an incentive
which benefits all shareholders. The co-founders (five of us including
myself) have allocated 100% to other employees and not one of them will
go to us. We are not asking for a return on these shares from these
employees since we believe in this company and feel that these shares
will help to reach our target price within the next 14 to 18 months. What
is that? Let's just say that we picked a target and all numbers I have
seen so far are low.
We have our own goals and plans.
>
>***************************************************************************
>A number of members have e-mailed DATA NEWS GROUP about realistic
>profitable entry levels. We strongly believe that anything under a dollar
>Cdn. is a great buy. Our understanding is that it will jump over this level
>firmly as a settlement is reached. Given our outlook for THW, one could
>conceivably make profits buying blocks all along the way.
>***************************************************************************
>This is a great company that will give investor's very nice returns,
>however we stress that you take some profits along the way. This enables
>you to pick up a greater amount of shares on the dips (infilling), or to
>quite simply bank your profits.
>***************************************************************************
>
>July 24
>
>PLEASE READ VERY CAREFULLY!
>GOOD EVENING GROUP;
>
>One of our members has written and accused us of Hyping THW beyond their
>means.
>Just so everyone is clear on this......WE ARE PRIVY TO INFORMATION THAT IS
>VERY HARD IF NOT IMPOSSIBLE TO GET AS AN INDIVIDUAL INVESTOR OR BROKER.
>
>WE HAVE SPENT A LONG TIME WORKING UP TO THIS POINT AND THE REWARDS WILL PAY
>OFF FOR OUR ORIGINAL GROUP AS WELL AS OUR NEW MEMBERS.
>
>WE DO NOT MISLEAD OR GIVE INFORMATION THAT IS INCORRECT TO THE BEST OF OUR
>KNOWLEDGE. IF YOU FEEL THAT YOU CAN RECEIVE PERTINENT INFORMATION THROUGH
>YOUR BROKER OR SIMPLY BY JUST PHONING THE COMPANY, THEN YOU SIMPLY ARE NOT
>SEEING THE BENEFIT THIS GROUP OFFERS. YOU ARE ALSO ONLY GETTING HALF TRUTHS
>AT BEST FROM THESE PEOPLE, AS THEY DO NOT KNOW YOU FROM THE NEXT PERSON,
>AND WILL MOST CERTAINLY NOT SHARE UNDISCLOSED INFORMATION OUT TO JUST
>ANYONE.
>
>WE ARE SURE THAT MOST OF YOU UNDERSTAND THIS, HOWEVER WE FELT THAT THIS
>NEEDED TO BE CLEARED UP. WE STAND BY THE WSJ ARTICLE APPROACHING ON TOTALLY
>HIP SOFTWARE, BE PATIENT IT IS COMING. **SPECIAL NOTE - PLEASE KEEP OUR
>INFORMATION TO YOURSELVES AS THIS IS A CLOSED MEMBER GROUP.
>
>EXAMPLE: IF YOU WERE TO PHONE THW TOMORROW AND ASKED THEM ABOUT A POSSIBLE
>WALL STREET JOURNAL ARTICLE COMING OUT, THEY WILL MOST CERTAINLY DOWN PLAY
>IT, AND/OR SAY IT ISN'T EVEN FIRMED UP YET. THAT IS ALL THEY CAN SAY AS A
>COMPANY, OTHERWISE THIS INFORMATION GIVEN OUT BEFORE THE RELEASE WOULD BE
>CONSIDERED INSIDER INFORMATION. DATA NEWS GROUP, HAS THE MEANS THROUGH MANY
>DIFFERENT SOURCES, NOT RELYING ON THE COMPANY ITSELF FOR ALL INFORMATION.
>WE THEN ARE ABLE TO ISSUE NEWS TO OUR MEMBERS THAT GIVES THEM A LEG UP.
>
>THIS IS WHAT DATA NEWS GROUP IS ALL ABOUT - OR WHY WOULD YOU NEED US?
>HANG IN THERE, THW WILL REWARD THEIR SHAREHOLDER'S SUBSTANTIALLY OVER THE
>NEXT FEW MONTHS!
>
>THANK YOU,
>DATA NEWS GROUP
>
>
>
> - att1.htm
As far as I have read, there is not much out of line here other than
timing issues and that the target prices on THW shares are their own
opinions. I have read very lame reports in the past from others that
don't do any due diligence on the companies they report about.
I would have liked to have seen more about the market segment that we are
in, the forecast for the market which is in the 100's of millions, and
some competitive analysis about THW and Adobe and Macromedia.
This group is definitely getting certain information, but I caution you
that this information is accessable from many sources if they look in the
right place and ask the right questions. They most certainly came into
our office and asked the right questions to get some of this stuff. We
provide company information to many people. What they do with it though
is not up to us after the leave our office.
The one comment I have is this. The company is not concerned about being
granted the injunctions and filing the lawsuit against the Aggarwals.
However, it is obviously concerning some investors, because right around
the time that we filed the lawsuit and when it was made public, things
stalled a bit. This is a combination of the the summer and also that of
some US based investors maybe feeling that the lawsuit is negative to our
future. We think it is positive and in our shareholders best interests
and we plan to continue with our legal action. If we let the Aggarwals go
without certain restrictions in place through the courts, it would be
negative to the company and all shareholders. Companies have lawsuits all
the time. This is one that we filed as Plaintiffs. We are not the
Defendants here.
I hope that this answers your questions.
Perhaps you could post the parts that you feel are relevant to others on
Silicon investor since I will probably be asked to respond to it again.
It would save me some valuable time.
Sincerely,
Randall H. McCallum
Chairman & CEO
Totally Hip
Posted by:
Randall H. McCallum
Chairman & CEO
Totally Hip
NOTE! For verification of this posting that it came from Randall H.
Mccallum please call me 1-604-685-6525 ext 223 or e-mail me at
rmccallum@totallyhip.com. I will call you back at my
earliest opportunity if you have to leave a message for me or I will
e-mail you with a reply to your questions as soon as I possibly can. If
trust is important to you, which it should be, then you should always
verify what has been posted before making an investment decision.
Otherwise you are on your own.
Signature from e-mail program:
Randall H. McCallum
___________
Chairman and CEO <http://www.totallyhip.com>
Totally Hip Software Inc. voice: (604) 685-6525x223
210-1040 Hamilton St. fax: (604) 685-4057
Vancouver, BC, Canada V6B 2R9 |
