As most of you know by now, (if you follow this blog), Advanced Photonix submitted certain matters to a vote of it's shareholders, including proposal #6:
Proposal 6 - Proxy Access By-law Proposal: A stockholder proposal requesting that the Board amend the Company's By-laws to allow stockholders to nominate director candidates for inclusion in the Company's proxy materials.This was a very simple and straightforward request to allow stockholders owning more than 1% of the company stock to annually nominate a candidate for inclusion on the Board of Directors. The votes cast were overwhelmingly in favor of approving request #6, as 8,431,558 more votes were in support of approving the right of shareholders to make such nominations, than were opposed to it's approval. The votes cast were:For 11,970,378, Against 3,538,820 Abstain 371,529, Broker Non-Votes 12,281,996
Management under the Bylaws which I understand may be outdated, and perhaps not in compliance with current SEC regulations*, has taken the position that "The stockholders rejected (proposal #6)".
*(I'm not knowledgeable about SEC regulations, so this may be inaccurate).
Charles Knowles a West Virginia veterinarian has spearheaded the shareholders movement in support of greater shareholders voice and rights in the company. Today on InvestorVillage (IV) he posted the following, which indicates management may be reconsidering their position on proposal #6.
The following are his comments not mine:
http://www.investorvillage.com/smbd.asp?mb=4804&mn=21152&pt=msg&mid=13098247
"Reached out to a couple of board members asking for a compromise. I am supposed to hear back next week.
I have gotten enough support that we will go forward if no compromise can be met.(still need 2,500!)
Yesterday a person donated $3,000 but wanted to send directly to my attorney. I have no problem with that! Hell with this bunch there should be no trust with anything related.
I have made it plain that a bad settlement is better than a good law suit for both the owners and the directors.
They still may have not gotten it-- that it is not their company but our company. We had probably better than 40% of all shares vote with us. Unfortunately a lot of people did not vote or voted as management suggested.
We need 3,500,000 more votes and then we could just go in and take control. Put Risser in as CEO and Williamson as COO and a director. Add Fogglesong and another two that I won't put their names out yet( but you probably know). Keeping only Steve and/or Don as original board.( the other two are well connected , API major share owners, and will be on board with no compensation until profitable or we find board people that we prefer.)
Then there is the other possibility that they wake up and either change the by-laws allowing #6 to stand or offer a compromise.
In any event the board had better of gotten the message of no more anyway or any form of increase in compensation without share owner approval, which won't happen until profit."
I have gotten enough support that we will go forward if no compromise can be met.(still need 2,500!)
Yesterday a person donated $3,000 but wanted to send directly to my attorney. I have no problem with that! Hell with this bunch there should be no trust with anything related.
I have made it plain that a bad settlement is better than a good law suit for both the owners and the directors.
They still may have not gotten it-- that it is not their company but our company. We had probably better than 40% of all shares vote with us. Unfortunately a lot of people did not vote or voted as management suggested.
We need 3,500,000 more votes and then we could just go in and take control. Put Risser in as CEO and Williamson as COO and a director. Add Fogglesong and another two that I won't put their names out yet( but you probably know). Keeping only Steve and/or Don as original board.( the other two are well connected , API major share owners, and will be on board with no compensation until profitable or we find board people that we prefer.)
Then there is the other possibility that they wake up and either change the by-laws allowing #6 to stand or offer a compromise.
In any event the board had better of gotten the message of no more anyway or any form of increase in compensation without share owner approval, which won't happen until profit."
Bottomline, in my opinion, management should clearly compromise this issue because it's in the company's best interests. If they really believe that shareholders rejected proxy proposal #6, in light of the overwhelming vote in favor of it, then all of us, management and shareholders are likely to suffer. Any claim proposal #6 was rejected is a best a half-truth, which Mark Twain called: " A half-truth is the most cowardly of lies.”
Mixed messages being sent?
All of this controversy comes at a time when management is predicting a big move toward profitability over the next few quarters. One knowledgeable poster on IV, summarized his understanding of the what management set out in the last conference call held in early August, which is consistent with what I also understood:
http://www.investorvillage.com/smbd.asp?mb=4804&mn=20980&pt=msg&mid=13035222
- This is the most bullish that I remember management in the past 15 years. There was not a litany of excuses for current or future weakness in revenues.
- Given the 18% increase in revenues for the quarter, revenue increases will need to be significantly higher than 35% in the coming quarters to hit the stated target of 35% for the year.
- Although GAAP profitability wasn't directly discussed, if revenue targets are hit, non-GAAP profitability will start to occur by the 3rd quarter.
- Sector growth is booming. It does appear that the rising tide is going to bring API along for at least some of this ride.
- We should see revenue growth start to accelerate by the next quarter. If that doesn't happen, I could see myself turning to a glass half empty view. Until then, the glass is half full and growing.
Given this rosy outlook, the sale by API officer Jeff Anderson earlier this week is raising investors eyebrows, and seems symptomatic to me of a management team that doesn't seem to understand the questionable signals that they send to the marketplace. Clearly, no one would find anything positive about news the insiders are selling, and this act unfortunately calls the rosy predictions made earlier into question.
| Date | Insider | Shares | Type | Transaction | Value* |
|---|---|---|---|---|---|
| Aug 29, 2013 | ANDERSON JEFFREY JOfficer | 6,007 | Direct | Disposition (Non Open Market) at $0.61 per share. | 3,664 |
THz advantage?
Charles Knowles suggested to me, that API management continues to believe that it holds a sizeable lead over other companies in moving it's products into the commercial arena. The video I posted of the Advantest biological and pharmacological device pictured in the video at the top of this blog, as well as the recent news from Agilent, about it's work with Virginia Diodes makes me question whether this is actually true or not. Time will tell.
Disclaimer
As always, the thoughts expressed in this commentary, are mine alone . They aren't intended to be legal or investment advice, and if I have mistated anything I will restate or retract the same. If you would like to post a contrary viewpoint, please post it. Perform your own due diligence. Good luck to you all, and thank you for reading.
3 comments:
Randy great job and thank you. Anderson selling 6,007 shares for $3,000+, just sounds like there has to be some reasonable explanation. Other than He feels API
share price is worth .61 cents. The qty share/$ amounts just seem so minimal. Granted, any selling
from inside looks bad, but hopefully there is a simple explanation why.
Glen thank you. It would seem to me, that insiders should be buying, but then again, until shareholders rejected their compensation package, they just voted to give themselves shares each year.
Would like to contact you privately. How an that be accomplished?
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