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Wednesday, 10/18/2006 1:34:00 AM

Wednesday, October 18, 2006 1:34:00 AM

Post# of 169273
I can't believe what I'm seeing tonight. Longs have always been a bit confused but this is a bit too much.

Rufus did not deliver the halt. When asked on subpenny radio if he had the power to halt, he said he could go to market surveillance and get them to do it because of all the short manipulations. Conclusion: Despite his earlier promise to halt, he now realizes he simply does not have the authority to do it.

Rufus did not deliver the reset. Whether you want to call this a stock dividend, split, or reset issuance, whatever, all this does is increase the number of shares outstanding. It doesn't guarantee $15 or anything close to it. Further, the increase in shares outstanding will make it all the more difficult to get a Nasdaq listing. To be listed there, a stock must trade at $4 minimum. How is the stock going to get to $4 after the split when there are 700 million shares outstanding, a market cap of $2.8 BILLION?

Rufus has no idea what the rules are. He didn't know that the 10k was due on September 28. He didn't know that the final, extended deadline was October 13, even after the deadline had passed. Rufus didn't know that he had to inform the NASD that the 10k has been filed and because of this, the stock will trade with the dreaded "e" tomorrow, a situation that could have been easily avoided.

The record date confusion on the 6 additional shares is a complete fiasco. His statement violated 10b-17 which requires advance notice of a dividend. Further, for a dividend or stock split where the value is greater than 25% of the stock price, the record date is basically irrelevant. Anyone who holds on the day the dividend is actually issued receives the dividend. The ex-div date is the day after the split. In this case, the ex-div date is October 31. Again, Rufus and his team of attorneys are unware of the rules. This issue is addressed here:

http://www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_003997.pdf

Even today, the company is giving out bad information. I spoke with Sabra today and she assured me that yesterday was the date of record.

Rufus has still not delivered the S-4 despite promising to do so for over 3 months; CVSU shares cannot be registered until he does. The 10k is a complete joke; what the heck happened to FHAL? (if you think they can just pretend it doesn't exist anymore, I suggest you read ANY 10k of a shell after it has done a reverse merger) AISS is sunk. Rufus, Ben and Sabra are going to run an aerospace company? The much-hyped NOBO list has destroyed the pretense that there is a 70+ million short position. It goes on and on. And yet there are people here predicting a $100 stock price. All I can say is, wow.

Here's my post on how they determined the number of shares for the special issuance...

http://www.investorshub.com/boards/read_msg.asp?message_id=14082007
There was one of those special moments only Rufus can create on subpenny last night. Simon asked him something about the share structure after the big share issuance. Here's the play-by-play...

Simon: Should the outstanding share structure be 721 million or 618 million?

Rufus: Hahahahaa. aaAAAaa. <??> Read that little part in parentheses in that press release. What does it say? The figure will be rounded down to the nearest single whole digit.

Simon: Ok.

Rufus: Yes, it should be 721 because it comes out to 6.53 is what the actual ratio comes out to. We rounded it down. We didn't say anything above 50% would go lower. We rounded it down to keep it all at all at 7 bucks(?) Down to 6 dollars and thats why you got.....I mean 6 shares for each one..that's why you're getting 6.

Simon: Ok

Rufus: Which brings you to 618.

Simon: Ok, so

Rufus: I mean, ya know, c'mon, hehe, there's that greed factor again, my friend. He. Whoever said that

My Comments:
Simon was asking a legitimate question. If there are 103mm shares no and you're issuing 6 new shares per old share (6x103mm), shouldn't the new total be 721mm (103mm+618mm)? But nothing gets past ole Rufus. He thinks the question is about why investors got 6 new shares instead of 6.53. The close price yesterday was 1.80. Put 1.80 in his formula, 15/x - x and you get 6.53). So Rufus proudly points out the part in the parentheses in the press release about rounding saying this allowed them to round down.

This is hilarious because...
1. He didn't answer the question. If he did, he would realize that he has committed the company to issuing 618mm new shares which will result in 721mm shares outstanding, not 618mm.

2. The whole point of the formula is to get shareholders their $15, thus satisfying Rufus' guarantee. But as many have pointed out, his formula was wrong. Putting $1.80 in 15/x-x gives you 6.53 (as he said) but take that a multiply it by 1.80 and you only get $11.76! (FYI, the correct formula is 15/x-1.). By rounding it down, the numbers only get worse. 6x.180 is only $10.80. I'm not quite sure how $10.80 rounds to $15. Guess Simon will have to ask a followup on that one.

3. But wait, it gets better. The blurb in parentheses that Rufus was so proud of is only applicable with a reverse split. With a forward split, there is no need to allow for fractional shares because any whole number of shares multipled by a whole number (6) is also a whole number. So Rufus once again cribbed something he doesn't understand and put it where it doesn't belong.

And that's the truth, folks. All on tape. Your CEO in all his grandeur.



"The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first, the love of soft living and the get rich quick theory of life."
--Theodore Roosevelt

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