To: Jim Spitz who wrote (71830) | 6/16/2001 9:27:06 AM | From: RockyBalboa | | | Even worse, jims
APPS appiant is nothing else than our old friend NHAN.
(see: Message 15122954
biz.yahoo.com
On May 23, 2001, pursuant to the Agreement and Plan of Merger, dated as of
February 5, 2001, by and among Appiant Technologies, Inc., a Delaware
corporation formerly known as NHancement Technologies, Inc. (the "Registrant"),
Great America Acquisition Corp., a Delaware corporation (the "Merger Sub"),
Quaartz Inc., a Delaware corporation ("Quaartz") and Tom Ku, as Stockholders'
Agent, the Registrant completed the merger of Merger Sub, a wholly-owned
subsidiary of the Registrant, with and into Quaartz, with Quaartz being the
surviving corporation of the merger and becoming a wholly-owned subsidiary of
the Registrant. The transaction was closed on May 23, 2001 and is being
accounted for as a purchase transaction.
As consideration for the transaction, the Registrant issued an aggregate of
1,500,000 shares of the Registrant's common stock, $0.01 par value, in exchange
for the outstanding shares of capital stock of Quaartz, subject to the
withholding of 50% of such shares in escrow in accordance with the terms of the
Agreement.
The Registrant currently intends that Quaartz's business will continue to be
operated in its current manner. Certain of the assets of Quaartz were used to
in the application and service provider business to offer its customers tools
and services to enhance customer interaction through the Internet, and the
Registrant currently intends to use such assets in substantially the same
manner.
The total value of consideration paid for the purchase transaction was
determined based on arm's length negotiations between the Registrant and
Quaartz, which took into account Quaartz's financial position, operating
history, products, intellectual property and other factors relating to
Quaartz's business and certain income tax aspects of the transaction.
Prior to the effective time of the merger, the Registrant was granted a
security interest in substantially all of Quaartz's assets in exchange
for agreeing to loan up to [$1,000,000] to Quaartz. |
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To: Anthony@Pacific who wrote (71842) | 6/17/2001 4:01:53 AM | From: Puck | | | Anthony, your book would be a lot more interesting than Blodget's, if you ever wrote it!
An old Woody Allen saying used to go "Those who can't do teach, and those, who can't teach, teach gymn." Let me offer a turn of the millenium variant on that aphorism: "Those who can't do become stock analysts." |
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To: Anthony@Pacific who started this subject | 6/18/2001 8:19:18 AM | From: rupers | | | Dancing on the Graves of Dead Dot-Coms
washingtonpost.com
By Jerry Knight Monday, June 18, 2001; Page E01
Ordinarily when a company goes under, it's an occasion for grieving.
The painful passing of PSINet Inc., the bankruptcy of Teligent Inc., the liquidation of Musicmaker.com Inc. and the untimely, unfortunate farewells of so many telecoms are marked by mourning for the loss of investors' money and entrepreneurs' dreams.
But the failures of Socrates Technologies Corp. and ZeroPlus.com Inc. ought to have Washington Investors dancing on the graves.
Ding dong, the dogs are dead.
But not before they took a bite out of lots of investors who were foolish enough to buy stock in these corporate cousins. Socrates and ZeroPlus were taken public by the sleaziest penny stock promoter of the last decade, Stratton Oakmont Inc., a Long Island outfit long since shut down by regulators.
We come to bury these stocks, not to praise them, in the hope that their obituaries will become object lessons for Washington investors. Both have been previous subjects of this column. There has never been anything good to say about them before. There's no reason to change that now. Hopefully this will be the final chapter in stories that should have ended a long time ago.
The Nasdaq Stock Market last Monday ordered an indefinite suspension of trading in the stock of ZeroPlus, which is shutting down its Germantown-based Internet telephone business.
Socrates, an erstwhile computer consulting business that now lists its address as a town house in Prince William County, has sold its only operating ventures, but the stock is still trading, quoted at 3 cents a share.
And there probably is somebody out there who could be talked into buying it.
Talking people into buying stocks is what Stratton Oakmont did before the firm was put out of business by a joint task force of state stock regulators, the Securities and Exchange Commission and Nasdaq regulators.
By the time Stratton folded in 1997, many of the companies it took public and promoted had gone under. But the local pair -- Socrates and ZeroPlus -- lived on. Their businesses changed, their names changed, and new suckers kept buying their stocks.
No ZeroPlus or Socrates executives have ever been accused by regulators of violating securities laws. Nor, so much as can be determined from public records, have the companies ever been the targets of stock regulators.
Civil lawsuits are another matter. Socrates is facing a $3.5 million securities fraud case filed in March by several investors. They accuse Socrates executives of fraudulently pumping up the value of a New York computer services business the company acquired, from $660,000 to $3.5 million. Whatever it was worth at the time, the New York company failed and was written off by Socrates as a total loss. Socrates executives haven't yet answered the lawsuit.
Socrates's legal problems prompted the resignations of two outsiders who joined the company's board late last year to try to save the firm.
In their resignation letters, Clark Easter and Michael Shoemaker said that in three months on the board they were never able to get financial records and were repeatedly blindsided by new trouble.
"Every day I found out something more and more horrible," said Easter, who heads 4GL Software Solutions Inc., a Monkton, Md., firm that provides specialized computer software to school systems, including those in the District, Baltimore and Detroit.
"The final straw for me was when they gave out a list of all the legal actions that were going on against them," Easter said in a telephone interview.
Directors and officers, including retired Gen. Edward Ratkovich, have been bailing out of Socrates for years. Ratkovich originally was a major shareholder of Socrates and ZeroPlus and once tried to merge the two firms. Socrates made a $5.3 million investment in ZeroPlus and sold its stock at a $4 million loss.
None of the original executives of Socrates is still with the company, but since its founding ZeroPlus had been run by Robert Veschi, who founded the firm and took it public as E-Net Inc.
On June 5, Veschi announced the company was shutting down and laying off most of its employees. Veschi would stay on, he promised, in an "attempt to salvage the value of the company's assets."
To say nothing of saving Veschi's own assets. SEC filings list him as the largest stockholder, with a 14 percent stake in the company as of last November. Though the company has never made any money, Veschi certainly has.
In the year ended March 2000, according to the company's proxy statement, he collected a $175,000 salary plus a $175,000 bonus. Half that bonus was guaranteed by Veschi's contract, the other half awarded as a "performance" bonus by the company's board of directors.
It was some performance. ZeroPlus lost $10.1 million in fiscal 2000 and generated revenue of about $500,000.
In addition to paying Veschi's salary and bonus (and of course giving him stock options), ZeroPlus rented a plane for Veschi to fly on company business. It was Veschi's own plane, for which he collected another $187,500.
When the chief executive collected more than the company generated in revenue, is it any wonder ZeroPlus went under? The only surprise is it lasted so long.
Long enough that Washington investors lost a lot of money on the stock. Over the past five years the shares rose and fell in alternating waves of investor hysteria and terror. In the summer of 1998, the share price rose to $19 and then crashed. After several more sawtooth moves, the shares rode the wave of webmania back to $17 in March 2000 before beginning the long and fatal descent.
ZeroPlus and Socrates both had big followings on the Internet investor bulletin boards -- Socrates on RagingBull.com and ZeroPlus on Yahoo.com. Those aptly named Web sites still carry vast amounts of raging bull about Socrates and ZeroPlus, much of it written by yahoos hiding behind pseudonyms and screen names.
When the stocks were actively trading, the discussions on RagingBull and Yahoo came with a warning: Read at your own risk. They served up a hash of fact and fantasy, much of it obviously intended to manipulate the stock prices. Now it's mostly postmortems that are posted, including more than a few laments of "I can't believe I actually bought this stock!"
Some people are still buying Socrates stock. On Wednesday, for example, somebody sold 200 shares for a grand total of $6. The day before, 3,000 shares changed hands -- that's $90 worth.
Based on its 3-cents-a-share stock price, Socrates has a market value of about $700,000. The company is just a shell, "living" -- if that's the right word -- in the Centreville town house of Andreas Keller, now its chief executive.
Keller, previously the company treasurer, seems to be the person stuck holding the bag for Socrates. He's the last man standing after other executives left under various clouds.
Last November, for example, Timothy Keenan resigned as chief executive after he was indicted on federal charges that he embezzled $321,000 from his previous employer.
Socrates was originally called MVSI Inc., and it made robotic vision systems used in automated welding equipment. Over the years, it dabbled in various computer and software businesses, acquiring two computer services and software businesses that still exist, Networkland Inc. and Technet Computer Services Inc. Those operations were sold in March to another penny stock company, CBQ Inc., which has offices in Hunt Valley, north of Baltimore.
CBQ describes itself as an "e-business infrastructure company" that owns businesses in various places, including China.
The company's latest balance sheet filed with the SEC shows assets of $4.8 million and liabilities of $6.6 million. The financial statement includes what accountants call a "going concern warning" that says CBQ may not be able to stay in business unless it can raise more money.
How can a debt-burdened firm, in danger of going under, make an acquisition?
With IOUs and stock.
As payment for Networkland and Technet, CBQ gave Socrates a $700,000 note and 7.65 million shares of CBQ stock, which traded for between 16 cents and 25 cents in March. CBQ stock was quoted at 31 cents on Friday.
Only 17 months ago, in January 2000, CBQ stock hit a high of $16.50 a share after the company announced plans to acquire a New Jersey company called 1stinhealth.com Inc. When that deal collapsed, the stock started sliding.
In a letter to shareholders earlier this year, CBQ Chairman Bart Fisher offered this explanation of what happened to the stock:
"While it might be tempting to blame other factors for CBQ's low share price such as a generally bad Nasdaq, a depressed (over-the-counter) market, Alan Greenspan's Federal Reserve policies, or the stock structure of CBQ, it is clear that one constant negative cloud purposely cast over the stock has been a cybersmear campaign aimed at market price manipulation."
Blaming unnamed people for making an unspecified "cybersmear" in unidentified parts of cyberspace is certainly more reassuring to stockholders than passing the buck to the chairman of the Federal Reserve Board, but it didn't help the stock price, which has been at less that 50 cents a share all year.
Nor did the stock budge after a May letter to shareholders in which Fisher maintained that taking over Networkland and Technet would help turn CBQ into a rapidly growing and profitable business.
Fisher, a Washington lawyer, did not return phone calls last week to his offices in Hunt Valley and Northern Virginia.
So where does this leave shareholders of Socrates and ZeroPlus?
Socrates is still facing a raft of lawsuits, with potential liabilities running into the millions. Its principal assets appear to be the note from CBQ and the CBQ stock. What that stock is worth is anybody's guess, given that CBQ has more debts than assets. It's only a matter of time before Socrates stock stops trading.
ZeroPlus has enough cash to pay its bills, sources familiar with its finances say. Laid-off employees got their paychecks and modest severance. It has some Internet phone technology that could have value. It has a relationship with Uniden Corp., the Japanese telephone maker, which uses ZeroPlus technology in some phones. There may be some residual value in the business.
The bottom line is, it's over for ZeroPlus and Socrates.
That's good news for Washington investors. These are companies that never should have gone public, stocks that never should have been sold, investments that never should have been made. Their demise should be celebrated, not mourned. |
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