At 04:46 PM 12/18/2009, Stephen A. Lawrence wrote:
-- I think it's unlikely that they're cash positive right now, if we leave cash flow from stock sales off the balance sheet. But, that doesn't really matter much; with repeated rounds of financing, companies can go for years in a cash-negative, money-losing state.
With the officers collecting salaries all along the way. There are two basic ways to survive in this situation: loans and investment. Loans are tricky, if a corporation has negative cash flow and failed product launches, my guess is that loans can get difficult to find. But investment can still be managed, if you have something you are doing that is or might be making money. Many of these here assume that this product is Orbo. It might not be, not exactly. It might be peeks at Orbo. And if you don't do anything to seriously upset those who have signed the NDA, the cat doesn't get to jump out of the bag.
"Thanks for your signing the agreement and for your confidence in us as represented by your $400 payment. As soon as that payment clears, you will get an access code to look at our full disclosure of everything. Let us know what you think when you have looked at it."
"I'm sorry that you were disappointed in our disclosure. Is there anything there that was contrary to your reasonable expectations? However, we don't want anyone to be disappointed. We require developers to take 30 days to fully review and do not accept termination requests during that period. However, if, after that, you wish to withdraw from being a developer, please let us know within the following 30 days and we will provide to you the termination agreement; upon your signature on that, we will refund your payment in full."
"As you have provided your signature on the document, your refund will be issued within 60 days as provided in the termination agreement. Thank you for your interest in Orbo. We remind you that all details that were disclosed to you remain completely confidential, and we vigorously enforce the non-disclosure agreement, because confidentiality is the core of necessity at this point."
So, they take up to 90 days to return the $400. Meanwhile the mark is highly motivated to remain silent, for sure, knowing that if he breaks the confidentiality agreement, as provided in the original NDA and the termination agreement, the refund will not be issued and, in fact, he may owe more money as liquidated damages, or face a lawsuit. Meanwhile the money is drawing interest if it is put into interest-bearing securities or deposits. Steorn doesn't have to do that, and if Steorn goes backrupt, anyone owed money may be screwed. But if they play it very conservatively, they get three month's interest on $400, or, say, $4.00, enough to pay the costs of running this shell game.
But as part of the termination process, they offer an opportunity to become an investor with the money, and they give incentives. The language is such that it appears they are offering investment in the technology, but they make sure that it's pointed out to the mark that even if the technology doesn't work out, because of the basic laws of physics or other nonsense, the now-investor may still make money, and good money. Yes, absolutely, it's a Ponzi scheme, in reality, but probably not, because of the investment-in-technology aspect, not an illegal one.
With this device, they have attracted people who might be inclined to believe that over-unity is possible, otherwise they wouldn't bother (other than sheer curiosity, which may trap a few cats as well). If the Orbo investigation is sophisicated enough, the physics of it might be fun. Some people might keep their money in just for that.
It's been said that I'm making assumptions. Sure, but probably reasonable ones. However, don't mistake my speculations as to what might be under the NDA covers with assumptions that this is what they are doing. I'm merely pointing out that, from what we see, a very clever and sophisticated and legal scam might be under way. The advertising on al-Jazeera was brilliant. They are taking the most negative material and turning it into a hook. For their target audience, I'd expect it to be very effective.
Remember, the ad could fail with 99.99% of the people who see it, who might indeed leave with the impression that Orbo is just plain weird. But they pull the rug out from under critics who respond, in a knee-jerk way, as I've seen on YouTube many times: Obviously you idiots don't realize that what you are doing is completely contrary to the laws of physics.
Because obviously they realize that *this will be the opinion of nearly everyone who knows the "laws" of physics.* By incorporating that into their ad, they create a certain level of rapport with these people, it is a classic trick employed by hypnotists and marketers. Incorporate the possible rejection, then reframe it.
-- In the United States, the directors won't generally be on the hook whether or not they leave a trail of burned creditors. If the creditors are stupid enough to let a free-energy company go for months without paying a bill, they get what they deserve, and "what they deserve" from an incorporated entity that goes bust is a few cents on the dollar. The only funds in the pot which can be touched are funds owned by the corporate entity.
Unless misappropriation of funds can be shown on the part of the officers, unless the board members can be shown to have been grossly negligent. Then it's possible they can be touched. But if the officers and directors are careful, and it's pretty likely they have knowledgeable legal advice, this is correct. They walk, and they get to keep their wages. After all, they did the work, right?
-- Also in the United States, there is one creditor which *does* matter: The U.S. government. A quick way to boost cash flow is to "forget" to pony up the company's share of social security payments. This occasionally results in company officers going to jail shortly after the roof finally falls in.
Yeah. Certain officers, the ones who sign the wage reports, typically, are obligated to ensure that the payments are made. There are two parts to the employment taxes: trust funds, i.e., amounts withheld, and taxes due on wages, i.e., employer contributions to social security, for example. The trust fund monies must be paid, the IRS will go after the officer or anyone they can reach who might be considered responsible and those amounts can't be discharged in bankruptcy, as I recall. The taxes, under some conditions, can, and they can also be negotiated away. The details can get complicated. I've seen a company that was very healthy but that was having cash flow problems use the withheld taxes, on the theory that they'd have it by the time the payments were due. And they didn't, and the IRS shut them down, padlocked everything. Bad advice they'd received....
