Let's consider what types of things led to the inclusion of this section of the 10K.
The CEO never told me that he did not care about the share price. That is something I have heard John say. At the time he was referring to the noise that is heard on the message boards relative to what needed to be done to make the technology work.
The CEO told me that dilution of the shares would be necessary to raise the money that would be needed to take the company to the point where it would be commercially viable.
I think that both were saying the same thing. Things will be done that are necessary, but are not necessarily good for the short term share price.
You are right to question what "delaying or preventing a change in control of the Company otherwise favored by our other stockholders" means.
I have no doubt John is working his butt off. At this point it is not a matter of perfecting the technology. It is a matter of getting it to the point where it is commercially viable.
Does "change in control" mean selling the company in its current state - one that is not commercially viable - to a company with the financial wherewithal to continue to develop the technology? Or could it mean that there is simply a disagreement about the new BOD members that need to be brought in to ensure that there is some independent governance?
I do not take it on face value that what John thinks is best for himself is best for the company or its shareholders. It is extremely important that we get a competent BOD in place.
It's as important as the technology getting to the point where it is really is commercially viable.
What are the "transactions or agreements that it would not otherwise consider?" I fear that it is with with "friends of John" that will not make decisions that are in the best interest of the company or its shareholders.
Which side you support comes down to where your trust lies. It should not surprise you that I believe that John has not acted in ways that have earned my trust.
Why should I trust Rauber? He is a businessman who was brought in to make business decisions. I wish I was a fly on the wall who was able to see how this choice was made. We can only assume that John had dealt with him during the Rock-Tenn negotiations and found him an acceptable choice when the whales - and presumably the SEC - put enough pressure on him to step down from the CEO position. But I'm not sure how much choice he had in that decision.
Why would those investing the most - the whales - wish to put somebody in charge who would not act in their best interest? Why would I believe that the best interest of big money is not aligned with the interests of the small investor?
Rauber has business experience that John does not have. John has as much interested in preserving his influence in the company as he does in having the company be successful.
It is this self-interest that concerns me the most.
Rauber does not need to be on premises 100% of the time to do his work as CEO. The same is true of the COO. Most of their work is conducted by phone and computer. They can be anywhere to do that type of work. They are not the ones responsible for getting the technology to work. I think not having the business decision makers constantly in the faces of the technology developers is a good thing.
My primary question for the CC was to provide an explanation for this section of the 10K. My expectations are not high that we will get that explanation.
One of my greatest fears has been that Rauber and Bordynuik would not be able to get along and all the shareholders would suffer. Those fears have become our reality.
The ship is rudderless and that is never good in a storm.
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