DILUTION + NEW DIRECTOR + IoTI see that Leung is once again heavily diluting the company for himself and a few insiders.
On April 30,2013 Empower had 56,745,279 shares outstanding.
14 months later Empower has about 71,000,000 shares outstanding. An increase of about 14,000,000. This number does not include the 27,244,570 options Leung granted himself and his wife for a $2.7 million loan. This number is growing exponentially with 10% interest compounded annually. I estimate these options have grown to over 30 million already.
Its difficult to know exactly how many shares and options Leung/Chan have given themselves and a few insiders or how many total shares the company has outstanding but its now well in excess of 100 million total common shares/options and growing rapidly.
Lets compare the price Leung sold his best supporters shares in 2005 to the price he pays:
In June 2005 Leung held a financing at $2.25/share. He was given $7.16 million for 3,186,370 shares to spend wisely.
On July 2,2014, 4 insiders were given 2.5 million shares for $125,000.
In the June of 2005 financing, $125K would have given an investor 55,555 shares.
A Deceptive Statement?:
In Leung's Dec 6,2012 announcment Leung claimed he and his wife Amy Chan only had 1.6 million shares between them. This may have been true but what Leung didn't include in the announcement was the fact that he had given an un-named immediate family member 9.45 million shares now held by Alpha Plus in trust for PAL trust, the beneficiaries of which are the immediate family of Paul Leung and Amy Chan. So was this a deceptive statement? You be the judge. This information can be found in the company Information Circular.
The point is Leung is heavily diluting the company. It seems barely a month goes by when we don't read an annoucement about more shares for Leung, Chan and the insiders. Don't forget-these are the people who took your money at $2.25/share all the way down to a nickel/share in financing after financing and gave you a 2 cent stock in return.
What percentage do the investors currently own for +27 million invested? Its very hard to know for certain but its got to be less than 20% and probably less than 10%.
I expect the company will be even more rapidly diluted in the coming months. I doubt the investors will have more than 5% aggregate owner ship within a year or two.
Is that why you bought shares?
APPOINTMENT OF NEW DIRECTOR YASUKAWA FOR IoT ENTRY:
I give Leung credit for bringing on board such an experienced and highly qualified business person. An online search indicates a man with a very distinguished record of success.
But how long will he stay? How much control will he have over the decisions Leung makes?
In the past Empower has had some experienced and highly qualified directors but they didn't last. They somehow disappeared. How long did Dr. Ma last? 8 months?
Yasukawa is very smart. He would not have signed on with this disaster if he didn't think it had a future.
".....senior advisor like Yasukawa-san to assist the board and the senior management to plot the best path to become a dominant world class Internet of Things Service Provider." Paul Leung, June 13,2014.
I hope that the above statement by Leung is a signal to investors that he realizes he isn't up to the task of CEO and will be relying heavily on Yasukawa to make decisions. Yasukawa should actually be the de-facto CEO behind the scenes. Leung is provably incompetent after 15 years of failure after failure after failure. Will Leung follow Yasukawa's advice? If Yasukawa quits in a few months we'll know Leung was unable to cede control as this company embarks upon yet another business plan.
Yasukawa will likely expect to be paid very well and so he should be. His record is outstanding. The company has no money to pay, therefore Yasukawa will likely be recieving millions of shares. I am expecting very rapid dilution in the coming months as Leung continues his stock grab. 150 million shares by 2016? At the current rate of dilution its very possible. The investors who were there at the beginning will recieve a pitance for what they invested in this company.
THE ETHICS OF PAUL LEUNG:
Many of you may not be aware of what happened in early 2006. It is a very good example of the type of man Paul Leung is. You be the judge.
On January 1,2006 Paul Leung gave himself and his wife, CFO Amy Chan very significant raises. Leung decided to pay himself $250K per year and Chan $150K per year. The company had nearly zero success. It was still a start up company burning over 300K per month and going nowhere.
January 1,2006 is a very important date because the very next day was the first day of trading for 2006. It was also the first day of the margin call when the most loyal of Leung's supporters were slaughtered. Its very important to realise that Leung was fully aware that a margin call was imminent. In spite of this he decided to begin paying himself and his wife these exorbitant salaries. He was paying these salaries with the $7.16 million investors had only 6 months earlier trusted him to spend wisely. Imagine having the nerve to give yourself and your wife such huge raises as you watch the people who in most cases raised the money by going into debt to the brokerage firm get slaughtered. Most or nearly all of the $ 7.16 million was essentially borrowed from the brokerage firm on margin--upon the financial advice of the broker who held a very large number of EPT shares. Thats a massive conflict of interest.
By the time the margin call was over most investors lost over 50% of their holdings. Some investors got sucked in by the broker and paid full price for the shares to clear their debt. Of course that stock now trades at 3.5 cents.
This was the margin call that wasn't going to happen according to the stockbroker who sold his clients the stock. This same stock broker went on to buy a boat, new 25K motorcycle and became owner of a condo that had previously been Paul Leung and Amy Chans home. Do you find that interesting? I do. That same stockbroker was later investigated by the brokerage firm he represented and it was announced he had decided to "retire." He was caught manipulating his clients accounts and other crooked things.
This whole drama is such a shame.
In the distant past Leung was actually well respected and liked by the investors of this company. Can the self proclaimed "visionary" say that now after 15 years?
Of course, all of the above is just my opinion. Nothing more.