[opendtv] "Risk Factors"

  • From: "John Willkie" <johnwillkie@xxxxxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 24 Nov 2008 11:46:37 -0800

Bob Miller's recent mention of what he told investors years ago reminded me
of risk factors.  Anytime a company seeks investment (and, in the case of
public companies) files 10-K (annual) or 10-Q (quarterly) or equivalent
reports with the SEC, it must include in the filing a list of clearly
delineated "risk factors."  (Unless there is no risk. :-).)


Long-time members of this list will recall an exercise that I performed some
years ago on this list, providing the details of the digital-TV transition
risk factors of the largest publicly-traded broadcast companies.


Legally, risk factors are important.  If an entity were to state in an
offering circular that it wanted to raise $10mm foe "general purposes" and
were to list in the risk factors that there was a risk that the CEO would
use some or all of the funds to buy cocaine for personal use, and if he/she
did that and the company then failed to provide a return (or an adequate
return) on investment, the investors would be BARRED from recovering
anything from the company, it's officers or directors.  That is, the company
disclosed the risk, and investors still invested.


So, Bob, assuming that your or a lawyer prepared a red
herring/prospectus/offering circular/preliminary offering circular, etc) for
Viacel or whatever the name is of the entity that raised funds for your
stillborne ideas, please provide us with the text of all your declared risk
factors.  We don't need anything else, aside from the amount you were
seeking.  I just ran a search on EDGAR and the Department of Corporations of
the Secretary of State's office for New York, and saw none, but there is
this listing in the Delaware Division of Corporation's web site.  I assume
that you raised money in New York state, so it's funny that you didn't have
any filing there, and I note that you don't appear to have done any
voluntary filing, and there should be some type of SEC registration filing,
but I'm not sure those are on Edgar.


So, I can't do this without paying a fee to Delaware, and it's not really
worth $10 to me.  So, please provide us with the risk factors listed in your
offering circulars (the broadest term) or regulatory filings.




John Willkie



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