A few readers have asked me to take a look at Voyant Int’l : VOYT.OB (formerly known as Zeros & Ones, trading under the symbol ZROS). While I certainly wish I was invested in Voyant during the first half of 2007 when it ramped from under 10 cents per share to over $1.50, the investment case now is far more murky.
Voyant says it is involved in all of these business areas : content creation (movie production, tv production, content aggregation, and internet portals); content distribution (internet data distribution, data transport technologies, rich media); content visualization; and content processing (audio and video post-production, preparation and formatting of content). With all of those business units, I expected significant revenues.
In fact, last quarter Voyant didn’t post any revenues at all . Zero. Zilch. Nada. And while some of the business units are new, the flagship RocketStream unit, which claims a revolutionary data transport technology, has been a part of the company since May 2006 . The company launched the commercial version of RocketStream last March and expects meaningful revenues in Q4 2007 . The company also purchased a data compression technology from Lockheed Martin and Centerpoint that it intends to use for aviation broadband, but that is a long shot. Aviation broadband is an incredibly difficult endeavor for a company of Voyant’s size. It looks like Voyant lacks both the financial resources and management expertise to commercialize an aviation broadband product itself, though the patents may have value.
Then there’s the voting rights. In a move that can only be described as shareholder-unfriendly, the company has granted its top officers super-voting preferred shares that effectively wipe out the voting interest of common shareholders. According to the latest 10-Q :
“In addition, the agreement provides for the grant to Mr. Waldman of 1,000 shares of Series A Preferred Stock. Pursuant to the terms set forth in our Certificate of Designation, the Series A Preferred Stock is convertible into common stock on a 1 for 1 basis. However, the Series A Preferred Stock votes on an as converted basis equal to 1 for 100,000. Accordingly, the issuance to Mr. Waldman of 1,000 shares of Series A Preferred Stock will provide Mr. Waldman with the right to vote 100,000,000 shares of common stock for or against shareholder actions (in addition to the shares of common stock he beneficially owns). Mr. Laisure and Mr. Fairbairn also hold 1,000 shares of Series A Preferred Stock.”
These three 1,000 share blocks, each having 100,000,000 share voting strength, by far outnumber the 118,539,195 shares of common stock listed as outstanding in the last 10-Q. Shareholders take note — this is a huge red flag. I’ll take a pass on Voyant. My guess is that it revisits the $.10 level before it sees $1+ again. Time will tell.