CLEARWATER, Fla., April 18, 2012 /PRNewswire/ -- ValCom,
Inc. (Pinksheets: VLCO) As a result of an Order and Judgment in
the recent litigation with respect to the governance and management
of ValCom, Vince Vellardita was
removed as Chief Executive Officer, President and Chairman of
ValCom, and the new composition of the ValCom board of directors
was established. Shortly after Vellardita's removal, the
board of directors of ValCom appointed me as Chairman of the Board
of Directors, and Timothy Harrington
as Chief Executive Officer.
We want to explain what was disputed in this litigation and how
this dispute has been resolved. We also want to briefly
outline where ValCom currently stands, and management's near-term
priorities and long-term vision for creating value at ValCom.
Disputed Items in Recent Litigation
- Prior to the commencement of the litigation, at the instigation
of Tim Harrington, a current board
member, an appraisal of ValCom's media library was undertaken
beginning in February 2011. The appraisal revealed that the
library was comprised of thousands of motion pictures and songs, as
well as T.V. shows and episodes, and was an undervalued asset with
what we believe is great potential.
- On May 11, 2011, at a meeting
following the annual meeting of shareholders, a mandate was given
by the board of directors to then-CEO Vellardita to (i) monetize
ValCom's media library, (ii) begin the process necessary to
collect royalties due to ValCom (both past due and future), and
(iii) fully document ValCom's rightful claims to the library's
contents.
- In the months following the May 11,
2011 meetings, a majority of the board of directors of
ValCom was of the view that the company was in need of new
leadership due to its inability to achieve strong financial results
despite ownership of a valuable media library.
- As the summer of 2011 progressed, it became apparent to the
majority of the board of directors that little or no progress was
being made in monetizing ValCom's media library and that other
serious problems had arisen with customers and vendors. The
majority board was of the view that, despite the board's mandates,
Vellardita was not fulfilling his responsibilities as CEO and, in
fact, was acting contrary to ValCom's best interests.
Concurrently, inaccurate and incomplete press releases were being
issued by Vellardita, without the board's knowledge or consent,
touting spurious actions by ValCom (including stock buybacks and
debt reductions). Despite the board's directive to refrain from
such conduct, Vellardita continued ignoring these mandates and his
responsibilities as CEO.
- In early August 2011, amicable
discussions commenced between the majority board and Vellardita
about the future governance of ValCom and Vellardita's stepping
down from his role as CEO. Suddenly, in late August 2011, without notice or warning,
Vellardita caused a purported shareholder action by written consent
to be taken, using improperly issued shares to effect such consent,
in an attempt to remove Silvana Costa
Manning, Tim Harrington, and
Mike Vredegoor from, and elect
Rahul Rathod and Nalin Rathod to, the ValCom board.
- Shortly after Vellardita's attempted August 2011 shareholder action, the majority
board of ValCom adopted resolutions to terminate Vellardita as CEO
and appoint Patrick Willemsen in his
stead.
- In August 2011, Silvana Costa Manning and Patrick Willemsen filed a complaint with the
Delaware Court of Chancery in an
action to clarify that Manning, Harrington, and Vredegoor are
directors, and that Rahul Rathod and
Nalin Rathod are not directors,
since their purported election was based on (i) failures to abide
by proper corporate protocols and (ii) improperly issued ValCom
securities. Concurrently with the filing of the complaint, Manning
filed a motion for an interim order to maintain the status quo with
respect to the business and affairs of ValCom pending resolution of
the action. The motion for status quo order sought to
maintain the ValCom governance structure immediately following the
May 11, 2011 shareholder meeting and
prior to the purported August 2011
shareholder action.
The Litigation
- In September 2011, upon the
consent of all parties, the Delaware Court of Chancery entered a Status
Quo Order directing that, pending resolution of the matter, the
board of directors of ValCom be comprised of Manning, Harrington,
Vredegoor, Frank O'Donnell and Vellardita, with Vellardita as
CEO.
- The Status Quo Order required Vellardita and the board of
directors to abide by specific protocols during the Status Quo
period. Vellardita failed to abide by such protocols; in
fact, he continued to ignore not only directives issued by the
board, but also those ordered by the court. Moreover, during
discovery, counsel for Vellardita withdrew certain documents that
plaintiffs Manning and Willemsen had shown to be fabricated.
This, in turn, led to the filing of a Motion for Contempt
against Vellardita.
- In March 2012 the Court entered
an order directing that Vellardita be removed as Chief Executive
Officer, President and Chairman of ValCom. The Court order also
invalidated the purported election of Nalin
Rathod and Rahul Rathod as
directors of ValCom, and judgment was entered that the board of
directors of the Company be comprised of Willemsen, Manning,
Vredegoor, Harrington, O'Donnell, and Vellardita.
Where Things Stand
The new board of directors and management are just now finally
able to take inventory of ValCom's assets, records and share
capitalization. We are undertaking a thorough process to
review:
- ValCom's share register and recent transactions involving
ValCom securities to determine our capitalization;
- loan transactions, including transactions with Solomed Pte Ltd.
(an entity affiliated with Nalin
Rathod and Rahul Rathod),
Greystone Capital and Asher Enterprises;
- relationships and obligations to vendors with a view to address
legitimate outstanding vendor responsibilities promptly; and
- actions and transactions undertaken by Vellardita and his
associates prior to his termination as CEO by the Court, including
actions taken during the status quo period in violation of the
Court's order.
In addition, we are currently interviewing independent
accounting firms with a view toward selecting a firm to audit our
financial statements and assist with the filing of quarterly and
annual reports as soon as possible.
The current management of ValCom is committed to providing
shareholders with transparency and regular communications with
respect to material items impacting the company. Subject
to constraints with respect to confidentiality, we will update
shareholders on our findings in connection with the foregoing.
ValCom Priorities in the Short Term
Our new management certainly has a broad range of tasks at hand;
however, we are focused on the following priorities in the short
term:
- We will work to complete the audit of our financial statements
as soon as possible, and file all necessary reports with the
Securities and Exchange Commission.
- We intend to monetize our media library. For example, we
recently entered into a contract with Anthony Barlo, CEO of Microhits, to assist in
collecting royalties for the media library on a commission basis
and to further develop the library through multiple avenues.
- We plan to continue to develop the MyFamilyTV Network, which
would include broadening program offerings.
- We plan to consolidate and organize the ValCom media library,
as well as protect our assets in climate controlled, walk-in
vaults.
- We intend to relocate the ValCom headquarters to New Jersey, where our CEO, Tim Harrington, and director, Silvana Manning, reside.
We hope this letter clarifies some of the issues you may have
recently read about. The board of directors and our new management,
recognizing the challenges ahead, are committed to rebuilding
ValCom into a responsible company dedicated to enhancing
shareholder value for all.
Patrick Willemsen
Chairman of the Board & President
About ValCom, Inc.
Based in Clearwater,
FL, ValCom, Inc. is a diversified, fully integrated,
independent entertainment company that has been in operation since
1983. ValCom, Inc., through its operating divisions and
subsidiaries, creates and operates full service facilities that
accommodate film, television and commercial productions with its
four divisions comprised of television and film production,
broadcasting (My Family TV Network), distribution, and live
theatre. For more information, please visit the company's website
at www.valcom.tv
Note About Forward-Looking Statements
With the exception of historical information, this press
release may contain forward-looking statements as that are made
pursuant to the "safe harbor" provisions as defined within The
Private Securities Litigation Reform Act of 1995 (the "PSLRA").
Forward-looking statements may be identified by words including
"anticipates," "believes," "intends," "estimates," and similar
expressions. In addition, any other statements which contain
characterizations of future events or circumstances are
forward-looking statements. These statements are based upon
management's current expectations as of the date of this press
release. Actual results may differ materially from the expectations
contained in this press release due to a number of risks and
uncertainties relating to our business which are discussed in
ValCom's periodic filings with the Securities and Exchange
Commission. ValCom, Inc. does not undertake any responsibility to
publicly update any forward-looking statements to reflect events or
circumstances after the date on which any such statement is made or
to reflect the occurrence of unanticipated events.
For More Information, Contact:
Silvana Costa Manning
T: (973) 588-7084
SOURCE ValCom, Inc.