Asure Software Response to Schedule 13D Filed by Red Oak Partners, LLC on May 13, 2009
May 18 2009 - 9:00AM
Marketwired
Asure Software (NASDAQ: ASUR)
To: Stockholders of Record of Forgent Networks, Inc. d/b/a Asure
Software, as of April 13, 2009 (the "Record Date")
Re: Response to Schedule 13D Filed by Red Oak Partners, LLC on
May 13, 2009
Dear Stockholder:
This letter is being furnished to you in response to the
preliminary proxy statement filed by Red Oak Partners, LLC as part
of its Schedule 13D filing with the SEC on May 13th, 2009. Red
Oak's preliminary proxy statement is currently subject to SEC
review.
The Board of Directors and management of the Company have
carefully reviewed the arguments advanced by Red Oak and believe
them to be misleading and based on faulty reasoning. The Board of
Directors and management also believe that it is of critical
importance for each stockholder to be fully informed of the facts
and rationale behind this vote so as to understand why it is in
stockholders' best interest to vote FOR this proposal.
WE ARE IN FAVOR OF THE GOING PRIVATE PROPOSAL BECAUSE:
(1) The Company currently faces delisting from NASDAQ, which may reduce the
already limited liquidity for all stockholders, while preserving the
high cost of being public and lengthening the time to profitability.
(2) The Company will save an estimated $1 Million a year in costs
associated with being public and thus expects to achieve profitability
sooner.
(3) Paying a premium to buy out fractional stockholders in order to go
private is not only legal and fair to all stockholders, but also
common practice in such transactions.
The Company has a very experienced Board and management that
have spent months, along with outside experts, exhaustively
evaluating various alternatives that could bring the Company to
profitability sooner and increase stockholder value. The resulting
analysis was clear that: 1) the Company was spending over $1
Million a year just on the cost of being public, which is out of
proportion when compared to the Company's revenue from its early
stage software business. 2) The Company's stock currently has
limited liquidity due to the early stage of the Company and market
conditions. In addition, since the Company does not meet the $1.00
minimum bid requirement for NASDAQ it faces delisting. This would
further decrease liquidity for the stock but not reduce the cost
burden of being publicly traded. 3) The company has aggressively
cut costs and will continue to do so, but certain expenses such as
its non-terminable building lease are contractual obligations that
do not accommodate a short-term solution.
The Company has never considered going private in order to
escape or reduce public or regulatory scrutiny, transparency or
accountability. The Company has a demonstrated history of
compliance and financial transparency of which it is very proud and
it is the intent of the Board to continue these high standards as a
private company. The proposed going private transaction also in no
way diminishes the Company's legal standing and responsibilities as
a Delaware company under Delaware law.
THE COMPANY'S RESPONSE TO WHAT RED OAK WANTS:
-- The Company has for some time had a near term succession plan that
will reorganize management to be more streamlined and efficient after the
going private transaction.
-- The Company pays employees at all levels based upon salary survey data
drawn from companies of commensurate size and geographic region. In
addition, the Board has an independent Compensation Committee that approves
management's recommendations on compensation.
-- The Company already has plans to reduce service provider costs such as
auditing and legal, but only when the Company is private and no longer has
the stringent requirement of public reporting. To reduce provider quality
while a public company is risky and irresponsible.
-- The Company has studied the long-term stock performance of several
other companies who increased their stock price via a reverse stock split
in order to remain listed on NASDAQ. The Company has concluded that the
reverse stock split approach provides little assurance of a sustained
increased stock price.
-- The Company believes that a share repurchase at this time would have
little lasting effect upon the share price, would unwisely deplete the
Company's remaining cash, and would not be in the stockholders' best
interest.
-- The Company has always held its annual meetings in a timely,
consistent manner in accordance with Delaware law. Red Oak appears to be
motivated to hold an annual meeting before the going private transaction is
voted on in order to deny stockholders the right to choose.
-- The current Board of Directors and management is highly qualified and
well vested with beneficial ownership of 6.04% of the Company. We believe
that a Board with excessive stock ownership may not act with the same level
of independence or long-term perspective that best serves stockholder
interests.
The Company senior management and certain Board Members have met
with or spoken to representatives of Red Oak on multiple occasions
at their request. During those discussions the Company shared its
plans and rationale as described above. Red Oak has failed to
provide the Company with acceptable alternative plans.
WE URGE YOU TO VOTE FOR THE GOING PRIVATE PROPOSALS
Thank you for your consideration.
The Board of Directors of Forgent Networks, Inc.
d/b/a Asure Software
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