On 12/19/2009 05:53 PM, Abd ul-Rahman Lomax wrote:
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.
Sure can! This is when honest entrepreneurs who are having problems
often sign personal notes. It gets the cash flowing again, and with
luck it may keep it flowing long enough to get the product out the door,
to get the next job to the state where we can bill for it, to clean up
the mess left from our mistakes last year, whatever.... I've known a
couple guys, my father included, who, long after the corporation had
done a chapter 7, were still paying off loans they'd signed for back
when they thought they just needed to chase the wolf away from the door
for a little longer and things would be OK.
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."
:-)
I wouldn't be surprised if you're right.
OTOH I wouldn't be surprised if most investors decide to stay in the pot
rather than pulling out.
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
I don't think so; not as you described it. Only if investors get out
more than they put in is it a Ponzi scheme. Otherwise it's just
scrambling for new investor dollars to replace the old ones who got cold
feet, the same way all companies without income must do.
A Ponzi scheme is specifically a scheme for allowing *investors* to make
money even though the company has no source of income. It's the lure of
assured high return on the money which pulls in the investors. In
particular, investors who pull out before a Ponzi scheme collapses make
a profit. The (very plausible) scheme you describe doesn't earn
anything at all for investors which pull out; they just break even. The
*only* winners are salaried employees.
That's just "business as usual" in the startup world -- save that in an
honest startup, when things start to go sour, the officers often stop
drawing salaries, in an effort to bolster cash flow...
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.
Oh, I don't know. Maybe you're right about that, after all.
Certainly the only assumption that really seems to hold water is that
the folks at Steorn HOPE it will work that way!
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....
