Things to watchdointhejob, aka aatozz asked for comments to watch in the upcoming annual statements and MDA. I have a few suggestions for things to watch for the next while.
Last spring there was disclosure of what was called an Employment Agreement with Adrea Capital Corp, a private company owned/controlled by Mr. Miller. It struck me as an odd arrangement, as it refers to employment, annual salary and bonuses, but the compensation paid Ardea is management fees. Like many things I have encountered with ISM, in my opinion the disclosure was disjointed, very poorly worded, and hazy as to business logic. Usually if there is a services contract with a corporation (Adrea, in this case), the fee paid is set at an amount that that corporation takes responsibility for retirement and other benefits for it's employees. The fee in this case, in my opinion, is more than enough that ISM shouldn't have to assume further responsibility for all the possible happenings with any of Adrea's employees. For instance, the IR firm and Audit firm are surely not going to be asking for an "Employment Contract" to reward them if their current term contract or engagement is not renewed for some "Good Reason" that is presumably defined in the contract, but not in the Management Information Circular.
Something to watch for this year is whether the Employment Agreement is still in effect when this year's MIC is released, and whether the description (which may have been rushed as the agreement was entered into on the day the MIC was dated), is more meaningfully worded, maybe with a reference as to the reasoning that the Compensation Committee considered.
I consider that the amounts involved represent a significant and material commitment and contingent liability, in assessing the financial position of the company. ISM has not, to my knowledge, disclosed the agreement elsewhere, such as in their financial statements. Something to watch is whether the Auditors consider that disclosure is warranted. I recall, that in my opinion, the Auditors did not insist on disclosure of a potential liability in the year that the flow through was involved, it will be interesting to see the approach on this item.
Following the statement release, depending on the disclosure, I may check on the procedural requirements for adoption of such an agreement, and the disclosure requirements, past, present and future. I like to be aware of such requirements, and I'm sure the TSX and/or the OSC will have information available.
Another thing to watch is whether ISM gets AGM notice out in accordance with the regulations. It has had three AGM's since joining the TSX, all of which have been held later than the requirement. It will be interesting to see if the added Executive attends to complying with regulations this year.
Another thing to watch for is whether the information contained in the Micon Report will require a write down of carrying amounts for the Langmuir property. I would guess that there is no change in this regard. My guess is that the carrying amount can be rationalized, and that the requirement for write down is something that provides for a historical reporting of the horse having bolted, rather than any forewarning or recognition of reality.
I am also interested in seeing how management fees/executive compensation is altered as a result of the appointment of the new President/COO - not just the amounts, but the reasons considered by the Compensation Committee.
Those are just a few things to watch for in the coming few months, doingthejob. You may want to give your thoughts on these matters, at this time. Or you may wait, and support whatever the company chooses, after you know their choice.