A couple of readers who have had personal email exchanges with AEHI CEO Don Gillispie state that the responses are almost certainly from Don himself as they match his style of writing and using strings of periods between "thoughts"
The first response starts out with a by-now familiar theme- blaming the 'rabid anti-nukes', or 'opponents', rather than focusing on the actual issue raised. In this case, the potential investor asks for the company's explanation of a check for $50,000 and for the many late filings as outlined in previous entries. The responder claims it is "misinformation" and "incorrect filing dates" and then continues the fallacious ad-hominem argument without showing how, even if true, that could change the facts surrounding either the check or the filing dates.
The responder then makes a shocking claim regarding the $50,000.00 check:
AEHI CEO Don Gillispie is "...entitled to be reimbursed in cash over $1 million if he wanted to take it for startup costs..."
When asked how the liability of a potential cash reimbursement of "over $1 million" is recorded, we get this amazing response:
"...it was offered orally, but he never claimed it so it is not on the books as the company needs the money..."
One searches in vain through company financial reports since inception to find a recorded liability of $1,000,000.00 due to an officer. Wouldn't generally accepted accounting principles mandate a company with an oral agreement to reimburse the CEO $1,000,000.00 record such a liability so that shareholders know the true picture of the company's solvency?
Only once since the company began reporting to the SEC has such a transaction and liability been recorded. Reported to shareholders on three quarterly reports in 2009, it was far less than $1 million (and it was well after the infamous "I can take money whenever I want" 50k check of January 25,2008)
From the March 31, 2009 10-Q:
Now we see the clear motivation for the CEO to make it "...not on the books as the company needs the money"
But isn't that "unethical, deceptive and misleading", to use Don Gillispie's own words, to understate a potential liability of the company to make the balance sheet look better?
Or, is it the case that there is no such agreement, oral or otherwise, for the CEO to simply walk away with $1,000,000.00 whenever he wishes? Perhaps the more likely scenario is the "oral agreement" was a post-hoc justification for someone whose hand was caught in the cookie jar?
Here are the other balance sheets, which only indicate an "amount due officer" the now-paid-off $50,000 from 2009:
|10Q Balance Sheet 6/30/2009|
|10Q Balance Sheet 9/30/2009|
|10-K (Annual Report) Balance Sheet 12/31/2009- Note "Amount Due Officer" is gone.|
|10-K Annual Report Balance Sheet 12/31/2008 - Note no "amount due officer"|
|10-12G (Initial Registration Statement Balance Sheets for 2007 and 2006- also no "amount due officer"|
1. If there is such an agreement, then multiple reports to shareholders and the SEC have materially misstated the company's liabilities, to the tune of "over $1 million" (as claimed in the email).
Also, if there is such an agreement, "oral" as claimed in the email, or otherwise, another, possibly more serious, problem surfaces. According to the recently filed 8-K announcing the funding agreeement with "Centurion Private Equity LLC", the ability of AEHI to raise funds by selling shares (the "put agreement") terminates under certain conditions:
"2.3.2 Termination of Right to Put. The Company’s right to initiate subsequent Puts to the Investor shall terminate permanently (each, an “Automatic Termination”) upon the occurrence of any of the following:
(h) the Company has breached any covenant in Section 5, Section 6, Section 8 or Section 9 hereof;"
A couple of very significant and applicable of those covenants made by AEHI are:
"5.10. Indebtedness; Solvency . The Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2009 sets forth, as of June 30, 2009, all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments through such date. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements, indemnities and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto)..."
"5.23 Material Agreements . Except as set forth in the Commission Documents, neither the Company nor any Subsidiary of the Company is a party to any written or oral contract, instrument, agreement commitment, obligation, plan or arrangement, a copy of which would be required to be filed with the SEC as an exhibit to an annual report on Form 10-K (collectively, “ Material Agreements ")"
If there is an agreement "off the books" for Don to take "over $1 million" (as stated in the email from firstname.lastname@example.org), then the two covenants made by AEHI in sections 5.10 and 5.23 appear to have been breached.
2. If there is not such an agreement, then (again), what was Jennie Ransom doing writing a $50,000 AEHI check for Don's private land transaction? Is this what shareholders can expect in the way of stewardship of the company's money? What if Don wants a new boat, airplane, or rocket ship?
Which is it, Don?
Investors want to know.