Wishy Washy

So we finally have an announcement,  As far as I can make out, a Whitewash waiver  is one more usually used in Hong Kong and Singapore, although it has been used in the UK. It asks for permission for the entity (MBTH in this case) to buy more shares, whilst avoiding the mandatory trigger of a takeover - whatever the other shareholders wishes may be, or whatever the takeover provisions may state.

So what we have here is one major shareholder (presumably Bohman) is playing hard ball. (Good on you Johan). He's agreed that 50m more shares can be allotted, but has demanded certain conditions be met. We don't know what these conditions are, but they probably involve Johan getting lots of cash. So Mooers is trying to go for a Whitewash to avoid paying the cash to Johan and the other shareholders. Sneaky. Underhand. Devious. 


It's possible that this route is fraught with legal pitfalls and bear traps. More news when I've done more research into it.

They say another announcement will follow. Baited breath.  

______________________________________
In other news...
Palmi is suing the central bank of Iceland

Late and Probably Never

Hilarious press release this morning. Remind me never to use the same courier service that xG use: Finally we have delivery of the Army trial equipment... 140 days into a 180 day trial. And that, according to xG, is a "timely delivery"!

Now, I'm a big fan of the armed forces, but this press release took it a little far in its praise dontcha think: "dedicated", " resourceful", " leadership", "exceptional" soldiers. Maybe Marc's fellatio fantasies are more common than I thought.

The last of the quote is pretty telling. Basically it says, even though we've only given you 40 days to test it - it doesn't currently work : "[xG will] listen to them, to learn from them, and then revise our trial product to reflect their recommendations and better meet their needs."  

Edit:
and the last line of the 'about xG' is also notable. Nothing new, but in this context boasting about the number of your patents isn't a great idea. Some inconvenient person may compare yours to, say, Harris communications who is the current vendor of most Army radio systems. Have a look HERE at the US Patent Office filings for Florida. Harris are near the top. Scroll down to see where xG are.....

Don't drop the soap Guy

The inevitable follow-up to the Chimay story. Aww James Woodyatt. All that money gone. Now you know how the Maddoff victims felt when your company Optimal was a feeder fund for Maddoff. Such a shame.

Link HERE

Loans, Liens, Lies and Laughs

Well Mooers Branton are at it again. Another of the announcements whose headline says one thing, but the body of the text means something completely different. They already have two 'loans' out to their own company, xG, upon which the terms are; when the left hand (xG) doesn't pay the right hand (MBTH) then xG becomes property of MBTH. You would've thought that enough, but now a new announcement. Why? Well it's complicated.

Digging into the legalese of the Articles of Association (link Google Doc) you find that if a group or individual acquires 50% plus of the voting rights then they must make a cash (or equivalent) offer for all the xG shares. The price to be "not less than the highest price paid by the Offeror for Shares of that class or series during the Offer Period and within twelve (12) months prior to its commencement".

Looking at the figures from the last Alleby report, the voting rights that Moores Branton currently have (which include the voting rights they have over Joe Bobier's shares) come up to 43%. Obviously any new major shareholding they take on will take them over the 50% trigger.

This compulsory offer can only be waived if 75% of the other voting rights (i.e. not Mooers Branton's) agree to it. In practice this means Palmi and Bohman/Lloyd, because of the remaining voting rights (once you strip out Mooers Brandon and Joe) Palmi has 25.7%, and Bohman 24.0%, with every other small shareholder (presumably including those outstanding unsold shares from the ACH collapse) making up 50.3%.

The announcement goes on to say that they haven't received that agreement, so Bohman, and possibly Palmi are digging their heels in, which would trigger the takeover agreement and an offer for their shares. If the agreement came to place then ALL of the $10m would go into buying out Bohman and Palmi. This would mean no money left to try to tide over xG.

Then they try to wriggle even further by saying $5.2m of the $10m would go to paying themselves back (early) on the loans they made a few months ago! If this happens xG are worse off than they were previously. xG had been promised $5m ($1.5, plus "Up to" $3.5m). Now xG would only have $4.8m ($10m - $5.2m)! It's crazy. xG get zero if the takeover is triggered (because all of the $10m goes to paying off Bohman and Palmi), and less if it isn't. How is this good news?

Oh yeah. That $3.5m. Did anyone see conformation that they've actually coughed up? Me neither. That announcement said "have agreed on terms under which, at MB Technology's discretion". Maybe their discretion advised against it, and "Up to" is Mooers speak for nothing? Yet they propose to be paid back $5.2m. Do the math.

Then the bribery comes. Notice the "Conversion Rights" term. In it it says that if Bohman/Palmi agree to waiving the takeover within 15 days, MB will pay $0.25, if they don't it's only $0.10 a share.

All this is complicated, and made into a cat and mouse game, by what I suspect must be an imminent legal challenge from Bohman/Lloyd, put in place by Lloyd's resignation from the board. After all they bought around $28m of shares, and the takeover would only get them back between $2 to $5m depending on the offer price. Frankly it's an insult, but it is hard cash.

The takeover would result in xG folding for sure as the money would all go to paying off the shareholders. But perhaps Bohman/Lloyd may decide suing a collapsed company may be more problematic than suing a trading one. On the other hand they have been mis-sold in the most blatant and shameful manner. A simple demonstration to the court about the impossible nature of the xMax modulation should persuade the most cold-hearted jury, and should result in a payout at least an order of magnitude greater than the pitiful return the takeover would bring. If xG are still there to sue. Interesting times.

It begins...

Transfer of assets from xG to MBTH. Filed with the FCC 29/12/2010



Note how at the end they also ask for the records to be changed from xG LLC to xG Inc as they are "the same legal entity" - when all the while in the Hapoalim case they argued the opposite, that they were completely different entities!

EDIT: Looks like the transfer was granted last Friday 21/1/11. Now you see xG. Now you don't

The only experimental license they have is with MBTH, not xG:

Interestingly this experimental site is on a whopping 250m or so tower (Google-map N25 58 16 W80 12 31) only 10-15 miles from their test network, and can legally transmit at 35 watts. I wonder if this tower 'lends a hand' when journalists are invited to test the 1 watt network....?

xG Phones

An anonymous comment about xG phones on the previous thread got me thinking about them. I make it five phones that xG have been involved with, plus a few limited edition specials.

First we had the TA100 "SAS" the Slim and Swedish.

Then the TX100 "Landfill" of which there are 10,000 buried in a landfill site somewhere.

Then the 4G ready TX110 "Silver Brick" the first Cambridge effort which would begin large scale deliveries in November 2007...

Then the TX60 series
Which included
1) the original TX60 "Pure Fantasy"

2) then because it was fantasy they added an aerial to make the TX60 "Pinocchio"

3) Which came bundled with the TX60 "Egg Fryer"

4) Then the Nazi inspired, flip antenna, TX60 "Sieg Heil"

And now the TX70 "Enormous"

Countdown

Yawwwwn. Been pretty quiet on the xG news front recently. I guess everyone is waiting for the result of the trial (... the Army trial, not the Bohman v Kromka, xG v Chimay, or Woodyatt v Chimay trials). The agreed period was for 6 months, from 5th October 2010. To add some *glamour* :-P to the webpage I’ve added a countdown clock on the right to the deadline on 5th April 2011.

What happens after that? If the Army trial fails, my prediction is; nothing will happen. Literally nothing, because xG will be gone, finished. The money will have run out, and I can’t see Rick’s ‘generosity’ extending to keeping the company afloat when he can default on himself and award himself any 'assets’ that remain on the carcass. Should a miracle happen and the military ignore other advanced military radios (like ITT’s Spearnet) and go with xG, then my predicted timescale doesn’t change, as Mooers can still default on himself at any time.

The timescale seems accurate. xG have an events section on their website. It lists the events they plan on attending, or exhibiting in. It may be a coincidence, but there are no planned events after the end of the Army trial. In fact the major cognitive radio exhibition in the world is DySpan organised by the IEEE and it takes place only a month after the end of the trial on 3rd-6th May 2011. All the big boys will be there: Microsoft, Nokia, Ericsson, Toshiba, Alcatel, et cetera, et cetera. xG strangely aren’t down to attend. It may be that they think the IEEE will laugh at them, but for a company hoping to be the ‘world communications standard’ it’s a pretty glaring omission.

(In fact the IEEE are calling for papers about cognitive radio to present at the show. If xG want to be this ‘world communications standard’ then now’s their chance...)

The exhibitions they are planning on attending are more of the same old things they’ve been to without success in the past: CITA wireless, IWCE. These are exhibitions for local telephone suppliers, mobile broadband, voice video, data suppliers etc. Sure, most of the atendees will be switched on, but it's conceivably the sort of place where they may find a few people that don’t ask too many hard questions about cognitive radio. The kind of event that has previously won them massive deals, like Townes Telecommunications.

P.S. If you find all this talk of Cognitive Radios confusing then you are Marc Dannenberg. Here’s a nice cartoon to explain it all Marc.