Pinnacle Fund and Red Oak Partners Announce It has Issued Letter to Shareholders Containing Information About Recent Communicati
August 05 2009 - 3:30PM
PR Newswire (US)
NEW YORK, Aug. 5 /PRNewswire/ -- Pinnacle Fund ("Pinnacle") and Red
Oak Partners ("Red Oak") are mailing the following letter to
shareholders. The letter is included below in its entirety: August
4, 2009 Fellow Stockholders of Asure Software, Inc: Pinnacle Fund
("Pinnacle") and Red Oak Partners ("Red Oak") are sending you this
letter with our proxy materials to report important recent
developments about Asure Software, Inc. ("ASUR") which you and all
fellow shareholders should know. On Thursday, July 30, we filed our
definitive proxy statement, which is attached to this mailing and
which you are encouraged to read in order to make an informed
decision regarding the upcoming director election. Our slate is
highly qualified and Red Oak asks shareholders who are similarly
outraged with ASUR's directors to vote FOR our slate, to throw
ASUR's proxy and proxy card away, and to disregard any attempts by
ASUR to elicit votes by phone due to incessant calling by ASUR's
solicitors. Pinnacle and Red Oak believe ASUR's directors are
desperately attempting to entrench themselves and that Pinnacle's
proxy contains valuable information about their past history as
well as what Pinnacle and Red Oak want. Pinnacle's proxy materials
can be found at http://www.ourmaterials.com/pinnaclefund. In
addition ASUR shareholders are encouraged to contact MacKenzie
Partners, Inc. at 800-322-2885, 212-929-5500 or via email at with
any questions or for assistance in voting their shares. You should
be considering several recent developments of interest to
shareholders: On Tuesday, July 28, Asure ("ASUR") announced it lost
a substantial portion (Pinnacle believes nearly half or possibly
more) of its cash balance when a jury ruled that ASUR's management
and Board breached a contract with its former outside counsel,
Jenkens and Gilchrist. Substantial attorney's fees and interest
income were also awarded to Jenkens (ASUR has not informed
shareholders how much it spent on its own attorneys fees in this
case). We are greatly disappointed with the continuation of
material losses which we believe are directly attributable to
decisions made by ASUR's Board under the direct leadership of
ASUR's Executive Chairman Richard Snyder. Shareholders have
suffered substantially from these losses, and Mr. Snyder's recent
claims that ASUR is a 'start-over' (direct quote, ASUR May 27 press
release) confirm that these tens of millions in losses occurred for
absolutely no future benefit and instead solely reflect destruction
of shareholder value. It is time for a change. Pinnacle had been
trying for some time to engage ASUR in discussions to eliminate
further losses arising from the Board's litigation, which Pinnacle
believes is designed primarily to keep the Board and management in
office. Following the news of ASUR's legal loss to Jenkens, on
Wednesday, July 29, an email was sent from ASUR's outside general
counsel to one of Pinnacle's attorneys and is printed below in its
entirety: Peter -- Sorry I missed your call. I'm available any
time. Call now or once you get off the phone. The Company's bottom
line is this: Given the Jenkens lawsuit judgment, the Company's
cash position has about been cut in half; the Company estimates
that it would have about $5 million in cash remaining if the
judgment were paid today. The Company can either spend that
remaining money on the lawsuit against Sandberg and his group,
together with the proxy fight, or spend it productively on growing
the business. The Company certainly has a preference for the
latter, but make no mistake, the Company's resolve has not weakened
-- the Board believes that Sandberg et al are bad for the Company
for all the reasons stated in the Company's pleadings, SEC filings
and press releases. In fact, the Board believes that now more than
ever. Putting aside whatever interest Sandberg has in taking
control of the Company and managing it going forward, the question
is simply this: As the largest single group of stockholders -- with
clearly the most to lose -- do Sandberg and his group want to try
to salvage any value in their investment, or do they prefer to run
the Company into the ground fighting over what, in the end, will
likely be a lifeless carcass ? It seems like a pretty simple choice
to me, really. If Sandberg et al continue to fight the law suit and
contest the election, the Company will do likewise. There is no
ambivalence in that regard at the Board level. As a result, the
Company will likely exhaust substantially all of its cash reserves
prior to the meeting date. Then, win or lose, and irrespective of
the eventual outcome of the lawsuit itself, Sandberg and his group
will have nothing... the Company will be on life support without
any cash and Sandberg's group will have lost all or substantially
all of its investment in the Company; a pyrrhic victory in the
classic sense. I haven't spoken to the Board re options yet, and
can't speak on the Board's behalf, but perhaps we all ought to give
some thought to alternatives. While Sandberg is anathema to the
Board, I suppose a minority position for one or two of Sandberg's
guys might be tolerated; I'm not at all sure, but it's a
possibility. Also, we might want to look into whether we can
orchestrate some sort of buy out of the Sandberg group's position;
again, I'm not sure what the Board is willing to entertain or what
the Company can practically do, but it's probably worth some
thought. In the final analysis, the one thing I am sure of however,
is that the Board is not willing to cede control to Sandberg and
his group. If that's what they want, they'll have to fight for it
and win, and then they can enjoy the spoils. Mark G. Johnson
214.745.5600 direct Red Oak and Pinnacle are gravely concerned with
ASUR's willingness to "likely exhaust substantially all of its cash
reserves prior to the meeting date," leave it as a "lifeless
carcass," and that "There is no ambivalence in that regard at the
Board level," especially in light of ASUR's recent and substantial
Jenkens loss and its materially reduced cash levels, concurrent
with a continued operating cash burn. Despite this communication
from ASUR, Red Oak and Pinnacle requested a conference call with
ASUR's Board to explore a potential settlement. ASUR's Board agreed
to allow its CEO and Director Nancy Harris to speak with Mr.
Sandberg on Friday, July 31, and on that call Mr. Sandberg openly
stated: 1. that Pinnacle believes the Board needs a change given
ASUR's performance; 2. that Pinnacle is not after control of ASUR
and that it would not have control of ASUR even if Pinnacle's
entire slate was elected, because Red Oak's and Pinnacle's
representatives only account for 2 of its 6 nominees; 3. that Red
Oak and Pinnacle care about ASUR, believe the business has real
value, and are willing to reach a compromise in order to save the
company; 4. that to avoid seeing ASUR's Board and management spend
all of the Company's cash on litigation, Pinnacle and Red Oak are
willing to agree on a new Board comprised of 3 of Pinnacle's
nominees, 2 of ASUR's nominees, and a 6th outside Director to be
brought in upon mutual agreement; 5. that Pinnacle expects Richard
Snyder to keep his promise made during an April 27 meeting when he
exclaimed that he had been trying to leave ASUR for years and that
he would leave right after the Go Private vote. Pinnacle reminds
shareholders that the June 2nd Go Private vote was canceled on June
1 and that ASUR stated that "a substantial majority of the
Stockholders have now made their preference known" in voting down
all three of ASUR's Board's proposals. Instead of leaving ASUR, Mr.
Snyder was named Executive Chairman less than three weeks after the
Go Private meeting was canceled and ASUR recently disclosed new
change of control language under which Mr. Snyder stands to receive
significant payments; 6. that Paul Tesluk (who works under ASUR's
current CFO Jay Peterson) replace Jay Peterson as CFO. Numerous
individuals have contacted Pinnacle claiming to have worked at ASUR
with direct knowledge of both Mr. Peterson and Mr. Tesluk, and
Pinnacle believes that Mr. Tesluk can immediately and seamlessly
fulfill the CFO role and that Mr. Peterson's salary is entirely
unnecessary. Though Mrs. Harris informed Mr. Sandberg that any
scenario in which Red Oak's and Pinnacle's nominees seemingly had
control was a "non-starter," Mr. Sandberg asked Mrs. Harris to
confirm that these terms would be shared with ASUR's independent
directors and not just with Mr. Snyder, to which Mrs. Harris
agreed. Thus far, ASUR's response has been that it will not accept
any compromise that includes a loss of majority control by the
members of the current Board. We are concerned as it seems
increasingly evident that - per Mr. Johnson's letter above - ASUR's
entrenched board is determined to retain control at all costs, even
if shareholders are left with "nothing." Pinnacle and Red Oak
previously corrected ASUR's July 24 press release to add that the
judge specifically denied ASUR any expedited discovery in his
ruling and that a magistrate judge confirmed such denial when ASUR
renewed its request in an additional motion. Pinnacle believes that
if ASUR was sincere in its claims it could have raised its issues
months ago and not waited until it became more likely that its
Directors did not have shareholder support and faced being replaced
in an upcoming annual meeting. Pinnacle notes that ASUR's counsel's
communication only confirms what Pinnacle already believed - that
ASUR's entire litigation reflects an effort by its Directors to
entrench themselves, attempt to "price" any opposing parties out
through excessive legal bills, and is a continuation of
litigation-heavy tactics favored by ASUR under the direct
leadership of Richard Snyder and ASUR's Directors. Pinnacle notes
that these tactics have clearly only served to hurt shareholders
and shareholder value, as ASUR's Directors and Management have
earned significant compensation simultaneously coincident with
years of shareholder losses. We Warn Shareholders that ASUR may
Attempt to Delay the Annual Shareholder Meeting. Pinnacle and Red
Oak warn shareholders to expect that ASUR's tactics may be
reflected in another move by ASUR to delay its annual shareholder
meeting. If this is done, it will represent the fifth such
occurrence in the past year. As noted above, the U.S. District
Court for the Western District of Texas denied ASUR's motion for
expedited discovery. Pinnacle and Red Oak believe that ASUR's
directors are likely to attempt to delay the annual meeting because
the courts have not sided with them and because they face being
replaced due to the significant losses generated under their
leadership. If ASUR attempts to delay the meeting further, Red Oak
and Pinnacle may seek to compel the annual meeting by court order.
As background for Asure's long history of delaying its annual
shareholder meeting, Pinnacle and Red Oak note that: 1. On page 15
of ASUR's July 11, 2008 proxy, Asure stated that its next annual
meeting would occur in calendar 2008. No meeting occurred in
calendar 2008. 2. On ASUR's December 16, 2008 earnings call, Asure
then stated it would hold its annual meeting within "the next 90 to
120 days," or March to April of 2008. No such meeting occurred in
March or April 2008. 3. On ASUR's March 12, 2009 earnings call,
ASUR stated it would hold its annual meeting in the May, June, or
July timeframe. No such meeting occurred in any of those months. 4.
On July 15, Asure delayed its annual meeting initially set for July
30 to August 28 under the guise that the Securities & Exchange
Commission required more time for the review of ASUR's proxy.
ASUR's definitive proxy was filed just two days later, on July 17,
2009. For all of the reasons above, Pinnacle and Red Oak ask
shareholders to not be intimidated by ASUR's proxy solicitor's
constant phone calls and to instead focus on the losses incurred by
all shareholders alike under the leadership of ASUR's directors -
since Chairman Richard Snyder first joined ASUR's Board, ASUR's
share price has declined approximately 97%. Since all of ASUR's
directors joined the company its price has declined over 90%, and
during that time ASUR has reported in excess of $35 million in
losses. Despite this, ASUR has claimed that the company is a
"start-over." Instead of reducing costs in the face of continued
substantial losses, ASUR has stated it will spend all of ASUR's
cash and disclosed new change of control language allowing both its
Chairman Richard Snyder and its CFO Jay Peterson to receive
substantial payments under the newly disclosed terms. As ASUR's
counsel's letter implies, ASUR is prepared to leave shareholders
with a "carcass." We believe ASUR requires a change in leadership
in order to survive and that our nominees can create the value
ASUR's directors have failed to. We ask you to vote FOR our slate
of nominees by completing and returning the BLUE card. Please
contact MacKenzie Partners, Inc. at 800-322-2885, 212-929-5500 or
via email at with any questions or for assistance in voting your
shares. As fellow shareholders, we hope that you agree with us that
ASUR needs change and we ask that you vote FOR our highly qualified
Nominees. Sincerely, David Sandberg Portfolio Manager, Pinnacle
Fund LLLP Important Information Pinnacle Fund, LLLP ("Pinnacle")
and Red Oak Partners LLC ("Red Oak") filed a definitive proxy
statement with the Securities and Exchange Commission on July 30,
2009, in connection with the annual meeting of stockholders of
Forgent Networks, Inc. (the "Company") to be held on August 28,
2009. Stockholders are strongly advised to carefully read
Pinnacle's definitive proxy statement, as it contains important
information. Pinnacle and certain other persons are deemed
participants in the solicitation of proxies from stockholders in
connection with the annual meeting of stockholders. Information
concerning such participants is available in Pinnacle's definitive
proxy statement. Stockholders may obtain, free of charge, copies of
Pinnacle's definitive proxy statement and any other documents
Pinnacle files with or furnishes to the Securities and Exchange
Commission in connection with the annual meeting of stockholders at
http://www.sec.gov/ by selecting "Search" at the top right and then
typing "forgent" into the box asking for the Company Name, and
through the following website:
http://www.ourmaterials.com/pinnaclefund. DATASOURCE: Pinnacle Fund
CONTACT: David Sandberg, at Red Oak Partners, +1-212-614-8952, Web
Site: http://www.ourmaterials.com/pinnaclefund
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