Post by
walker77 on Dec 31, 2013 7:10pm
Lump of Coal
Year 14 of this financial disaster has now passed and CEO Paul Leung has delivered another lump of coal to the long suffering investors of this disaster who have lost $27,000,000+.
Leung's Dec 2,2013 announcement is a real kick in the groin for investors. Leung has decided he needs more shares. Again.
As part of the loan agreement he made with the board which is actually himself and his wife, Leung will receive 7 million shares just to loan the company $600,000. In addition he wants all the money back and is charging 12% for the first tranche and 13% for the second tranche. And if the loan is paid back before its due Leung wants 3 months interest. These terms are outrageous but Leung is completely unaccountable for his actions and he clearly does whatever he wants with no regard for the investors who have in many cases lost their life savings supporting him.
Leung is now acting like a 3rd party venture capitalist. It seems he has given up any pretence at being fair and reasonable. Don't forget, it was Leung's incompetent business decisions that put the company into the desparate situation its now in. Leung is essentially profiting from his own incompetence. Leung also claims all of the assets of the company as his own personal collateral.
The loan announcement was made only a few days AFTER the AGM. Why didn't Leung make the announcement PRIOR to the AGM? The obvious answer is he would then be in a position where he might be asked questions about the loan.
In my opinion this was a cowardly act by Leung. If he's not ashamed of this loan and its terms he should have made the announcement prior to the AGM and then answer any and all questions about the loan. But thats not how Leung does business. Shame on you Leung.
Leung also shut down the Richmond operations several months ago and still hasn;t made an annoucement. This is material information. If this is merely a move to consolidate offices with AIC I would be perfectly fine with that but its much more. I doubt very much Empower has any employees remaining. If there are then where do they work?
What about the so called "Empower Group?" Did it ever really exist? It certainly doesn't exist now.
At this point Empower does not exist except on paper as the parent company of AIC. Empower Defense Systems was shut down by Leung 9-10 months ago. There is nothing about reopening it in the latest announcement. Its likely permanently dead.
If acquiring EDS from Northstar was such a good idea 2 years ago why is it no longer a good idea? It was only last July Leung claimed it would be reopened on the west coast. Apparently its like all the rest of Leung's big ideas. Just another failure.
What About AIC?
I am not going to say this acquisition is a bad idea but it holds very little potential. I dropped by the Richmond store. It was busy but its also tiny. They cater almost exclusively to non english speaking chinese. Thats a very small market with no room to grow. Unless they break out into the general market all they can do is expand sales within their current customer base. That is very limiting and will have very little effect on the stock price if any. When you break down the $500K quarterly GROSS revenue its not much. Thats only about $165K per month divided by 4 stores. Thats about $42K per store and each store requires, rent payments, employee salaries and benefits etc. That leaves very little room for NET PROFIT. My guess is they are a break even business or in the red.
ISC technology?
I have always liked this technology and think its probably Leung's best idea. Leung identified the correct target market a couple years ago in his announcement regarding his "sales team." Why didn't it sell? If you look at Pixon's website they are definately selling their version of ISC and Leung claims EPT's is superior. Whats wrong?
Patent?
This is another mystery to me. If its all its cracked up to be then why not pursue it vigorously as Leung said he would in his May 21,2013 announcement? If a major cellphone maker is in violation and EPT were to recieve royalties it could drive the stock up several dollars or more. EPT would suddenly be a real company. Whats wrong?
Stock grab:
Leung just handed himself another 7,000,000 shares with this last loan. When you factor in the share options he has granted himself and his wife I estimate Leung now owns more than 80% of all outstanding shares. He may own as much as 85% of EPT.
Does that sound fair to you? It doesn't to me. Leung is continually eroding our percentage of ownership by diluting the company. Another loan and he will probably own more than 90% of the company. Even the most willfully blind, devoted syncophant has to be alarmed by this.
Something else going on?
Is there something else going on behind the scenes? I am finding it very difficult to believe that Leung is this incompetent. Is he trying to squeeze us out almost completely by diluting the company? Or is he deliberately sandbagging the company to put it out of business so that he can claim the assets as his own and then quietly sell them off or reopen the business taking all the profits? The assets are his personal collateral if the company goes under.
I am not going to accuse him of this because I just don't know but after 14 years and 32 milllion dollars even Leung should have been able to stumble backazzwards into something other than acquiring AIC and developing a long string of products he can't sell.
3 revenue streams:
Leung's Dec 2,2013 announcement lists 3 future revenue sources. AIC, ISC and the patent. This is a "forward looking statement" and as such carries no weight whatsoever. Leung has not even provided the scantist description of his business plan to generate revenue from ISC or the patent. They will likely go nowhere.
As far as I can see Empower is now a dormant company with the exception of AIC's operations. Thats all that Leung has accomplished in 14 years.
Leung still hasn't informed us officially of EDS's status. Investors contributed financially to that acquisition. We have a right to know the status. Is Leung so ashamed of himself that he is avoiding informing us? Its long past time for Leung to come clean and advise us of the real state of affairs for this company. We deserve it.