ragnarisapirate Posted February 27, 2015 Author Share Posted February 27, 2015 Since it hasn't been mentioned, I would point out that Forward Industries and their former CFO James McKenna settled his whistle blower suit. This was relevant because John Chiste, who Solitron just brought on to its Board, was a director at Forward and a key figure in the charges by McKenna. The suit, McKenna v. Forward Industries, Inc., which included Mr. Chiste as a defendant, accused him, along with other directors of Forward, of issuing preferred stock at a substantial discount to insiders, and their friends, which resulted in Forward reporting a material weakness in internal controls; of retroactively approving a non-justified 400% increase from $30,000 to $152,000 in annual rent that benefitted Board Chairman Johnson, of ignoring Board Chairman Johnson’s violations in regarding to managing $2 million of the company’s funds which resulted in a loss of $800,000; of voting to support an illegal issuance of preferred in stock in 2014 (i.e. without full board approval, in violation of NASDAQ rule 5635(d)), and Forward’s governing documents); of threatening Mr. McKenna with destruction of his career if he pursued legal action; and of illegal termination of Mr. McKenna’s employment. Here is the 8-k regarding the settlement. http://www.sec.gov/Archives/edgar/data/38264/000100329715000063/forward8-k2-18.htm While there is no acknowledgement of wrongdoing (how convenient for Mr. Chiste), Forward offered McKenna his job back along with back pay. He declined but will receive termination benefits, stock options, legal costs, etc. Basically they gave him everything he seemed entitled to for being wrongfully terminated. This should be equally frightening to both management and shareholders of SODI. I wish you the best of luck and think that you have the upper hand. It would be really hard at this point for shareholders to not get representation on the board, so long as someone is willing to foot the bill. :) Link to comment Share on other sites More sharing options...
Tim Eriksen Posted May 21, 2015 Share Posted May 21, 2015 We filed a preliminary proxy this morning. Sure would have preferred that the Board would have just listened to shareholders. Link to comment Share on other sites More sharing options...
Hielko Posted May 21, 2015 Share Posted May 21, 2015 We filed a preliminary proxy this morning. Sure would have preferred that the Board would have just listened to shareholders. I'm not a Solitron shareholder anymore, but good to see that someone is finally taking real action :) Link to comment Share on other sites More sharing options...
Travis Wiedower Posted May 22, 2015 Share Posted May 22, 2015 I'm not a shareholder anymore either but I still follow the situation out of curiosity. Wish you the best of luck Tim! Link to comment Share on other sites More sharing options...
valueyoda Posted May 29, 2015 Share Posted May 29, 2015 Shevach starts to feel the heat. Fortunately, he increased the annual dividend to $0.25 from $0.05 last year, and instituted a $500k share buyback. My fund will support Eriksen Capital's slate of directors and changes at the upcoming election. I think that these potential corporate governance changes and the change in capital allocation policy could indicate the beginning of a new era at Solitron. Link to comment Share on other sites More sharing options...
B_RK14 Posted June 2, 2015 Share Posted June 2, 2015 Shevach starts to feel the heat. Fortunately, he increased the annual dividend to $0.25 from $0.05 last year, and instituted a $500k share buyback. My fund will support Eriksen Capital's slate of directors and changes at the upcoming election. I think that these potential corporate governance changes and the change in capital allocation policy could indicate the beginning of a new era at Solitron. Valueyoda. Let's certainly hope so. In your opinion, ideally how many shares would you like to see management buy back/dividend out? Does anyone know where I can verify with the most updated filings of Saraf's ownership. Given his current ownership of ~10% he could ultimately own up to 25% using his options, but I would like to verify this and what it is likely to cost him to buy that extra 15%. Also does anyone know what happened to the Director Arthur LaPlante? I can't seem to find anything in the filings saying he is being replaced by Jose Rios. Perhaps I'm missing sth obvious but does anyone have info on this? Link to comment Share on other sites More sharing options...
Tim Eriksen Posted June 2, 2015 Share Posted June 2, 2015 Does anyone know where I can verify with the most updated filings of Saraf's ownership. Given his current ownership of ~10% he could ultimately own up to 25% using his options, but I would like to verify this and what it is likely to cost him to buy that extra 15%. Also does anyone know what happened to the Director Arthur LaPlante? I can't seem to find anything in the filings saying he is being replaced by Jose Rios. Perhaps I'm missing sth obvious but does anyone have info on this? Saraf's options are detailed in the 10-K, Item 7. Regarding LaPlante and Rios - I think you are confusing the company with another. Neither is involved with Solitron to the best of my knowledge. Link to comment Share on other sites More sharing options...
B_RK14 Posted June 2, 2015 Share Posted June 2, 2015 Does anyone know where I can verify with the most updated filings of Saraf's ownership. Given his current ownership of ~10% he could ultimately own up to 25% using his options, but I would like to verify this and what it is likely to cost him to buy that extra 15%. Also does anyone know what happened to the Director Arthur LaPlante? I can't seem to find anything in the filings saying he is being replaced by Jose Rios. Perhaps I'm missing sth obvious but does anyone have info on this? Saraf's options are detailed in the 10-K, Item 7. Regarding LaPlante and Rios - I think you are confusing the company with another. Neither is involved with Solitron to the best of my knowledge. Thanks Tim. I'm an idiot and you're half way correct. La Plante (p45, 2014, 10K) and Rios (2015, 10K) are actually the Director's of Finance rather than Director's. That's a confusing title if you ask me. To the extent that you are allowed to say, how is the proxy battle going? I would be interested to hear what key shareholders think of the $500k buyback and $0.25 dividend. My feeling is that it is not enough and only goes in a 'tokenistic' direction. Link to comment Share on other sites More sharing options...
valueyoda Posted June 2, 2015 Share Posted June 2, 2015 It is an important first step. We have to make sure that Tim will get on the board to guarantee an ongoing oversight of capital allocation. Link to comment Share on other sites More sharing options...
Tim Eriksen Posted June 2, 2015 Share Posted June 2, 2015 To the extent that you are allowed to say, how is the proxy battle going? I would be interested to hear what key shareholders think of the $500k buyback and $0.25 dividend. My feeling is that it is not enough and only goes in a 'tokenistic' direction. I unfortunately cannot comment on how it is going. I am certainly interested in what shareholders are thinking. Link to comment Share on other sites More sharing options...
wknecht Posted June 2, 2015 Share Posted June 2, 2015 I would rather see more, but is definitely a good step. Seems like an appeasement attempt /something for him to point at. I applaude the efforts and will obviously be voting for Tim and Co too. Link to comment Share on other sites More sharing options...
Liberty Posted June 13, 2015 Share Posted June 13, 2015 Gloves are off: http://www.oddballstocks.com/2015/06/the-solitron-proxy-battle.html Link to comment Share on other sites More sharing options...
B_RK14 Posted June 30, 2015 Share Posted June 30, 2015 Can anyone verify that the ownership numbers in SODI's latest proxy (p27) filed 29 June 2015 are correct? I am specifically referring to the numbers for: 1) John Stayduhar—these are based of 'verbal representation' and the last time the 13D has been updated was 2011. 2) James Schembs—figure based solely from 13D last filed in Dec 2012 3) Ancora Advisors—figure based solely from the 13D last filed in June 2013. These are all from a long time ago. I am not saying that they are not correct, I would just like to know, whether or not they can be relied upon. Can anyone shed more light? Also the numbers for Saraf are obviously inflated because they include unexercised options. My calculation is that is actually current ownership of SODI (minus the 290,073 unexercised options) is just 331,027 shares, or, approx. 14.4%. Can anyone else confirm this is correct? Link to comment Share on other sites More sharing options...
BeerBBQ Posted July 1, 2015 Share Posted July 1, 2015 Along those lines, does anyone know if the ownership positions of the people listed below are accurate: Juan Martinez: 56,005 Nate Tobik: 1,500 Jeff Moore: 8,000 Jeffrey Clarke: 11,240 Taylor Conant: 4,000 David Gerhart: 500 Thanks Link to comment Share on other sites More sharing options...
Juan Posted July 2, 2015 Share Posted July 2, 2015 I think I might be the Juan in your list, although my last name is Matienzo. We now own 84,633 shares. Link to comment Share on other sites More sharing options...
BeerBBQ Posted July 2, 2015 Share Posted July 2, 2015 Sorry for the getting your last name wrong. Thanks for speaking up. Link to comment Share on other sites More sharing options...
Liberty Posted July 3, 2015 Share Posted July 3, 2015 http://www.oddballstocks.com/2015/07/the-solitron-proxy-battle-heats-up.html Link to comment Share on other sites More sharing options...
namo Posted July 7, 2015 Share Posted July 7, 2015 I look forward to hearing how the shareholder meeting tomorrow goes. :) Best of luck to our merry band of activists! edit: got mixed up. The meeting is in August... :-X Link to comment Share on other sites More sharing options...
merkhet Posted July 13, 2015 Share Posted July 13, 2015 Any chance that the $7 million in net cash isn't real? Link to comment Share on other sites More sharing options...
valueyoda Posted July 13, 2015 Share Posted July 13, 2015 It is always a small risk with microcap companies, but aside from the obvious corporate governance issues and some recent weak control issues, I would deem that to be very unlikely. For that to be true, all associated accounts from the balance sheet, income statement and cash flow statement need to be come from Oz, and even though it is worrisome that Solitron has changed auditors many times over the last 10 years, it genuinely seems to be on account of some additional cost savings without any alarm bells from any of the former or current auditor. I do believe that the finance department could improve significantly on certain accounts, including inventory valuation, but also on some elementary finance concepts, such as share buybacks. Link to comment Share on other sites More sharing options...
merkhet Posted July 13, 2015 Share Posted July 13, 2015 Yea, I'm just trying to figure out why the CEO is so adamantly against being responsive to shareholders. The proxy battle being waged certainly seems to reveal the prevailing narrative that the CEO suffers from a bit of a persecution complex. My thought process is as follows. It makes little to no sense for the money to just sit there. Now, it's certainly possible that the guy just does not have a capital allocation bone in his body. (Many don't.) My guess here is that the other funds that have come and gone tried to have a conversation with him about distributing the net cash but did not seek to throw him out. Thus far, he has refused -- and even when pressed to do so, the only capital he's returned to shareholders via a dividend and buyback has been capital that is easily covered by the annual cash flows. Now, one way to look at it is that the guy is just very, very cautious about making sure that he's not "overspending his income." I'm just trying to see if people have explored the other possibility. Link to comment Share on other sites More sharing options...
Hielko Posted July 13, 2015 Share Posted July 13, 2015 I don't think it's plausible that the cash isn't there. It's the easiest thing for an auditor to check, and Solitron isn't located in China where bank employees might be in on the fraud too. 99.999% that the cash is real imo. Link to comment Share on other sites More sharing options...
valueyoda Posted July 13, 2015 Share Posted July 13, 2015 Yea, I'm just trying to figure out why the CEO is so adamantly against being responsive to shareholders. The proxy battle being waged certainly seems to reveal the prevailing narrative that the CEO suffers from a bit of a persecution complex. My thought process is as follows. It makes little to no sense for the money to just sit there. Now, it's certainly possible that the guy just does not have a capital allocation bone in his body. (Many don't.) My guess here is that the other funds that have come and gone tried to have a conversation with him about distributing the net cash but did not seek to throw him out. Thus far, he has refused -- and even when pressed to do so, the only capital he's returned to shareholders via a dividend and buyback has been capital that is easily covered by the annual cash flows. Now, one way to look at it is that the guy is just very, very cautious about making sure that he's not "overspending his income." I'm just trying to see if people have explored the other possibility. Believe me, I am very sceptical about investing in microcap net nets, especially when it looks to good to be true. And that was my initial reaction with Solitron. Too many auditors and board members have signed off on this one for that scenario to be true. The reason why everyone else in the past has given up, has to do with the stubborn nature of Saraf, whose stance on corporate governance and capital allocation probably wouldn't change by even the most dangerous CIA interrogator. That is why it is important that Eriksen wins this election, since it is more than likely that Saraf's recent attitude towards a share buyback and dividend hike were measures to get shareholders back on his side. He probably knows that the writing is on the wall for his way of managing the wall, and that there is no going back anymore after this year. Link to comment Share on other sites More sharing options...
oddballstocks Posted July 13, 2015 Share Posted July 13, 2015 You can speak to the auditors at the annual meeting. Same with corporate lawyers. Once you meet Saraf in person this investment makes sense. It is readily apparently why no cash has been distributed. Link to comment Share on other sites More sharing options...
BeerBBQ Posted July 13, 2015 Share Posted July 13, 2015 Anybody attending the annual meeting this year? Link to comment Share on other sites More sharing options...
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