The Claims 

The bulk of the negative information found on the Internet resulted from a couple of articles, posted on one website, that referred to our corporate bankruptcy, the filings made in that court and statements made there by the accusers, the trustee and the judge.

There were essentially 4 claims made against us: 

• Claim 1:  The companies were nothing but a scam to bilk investors and not conduct legitimate business. 
• Claim 2:  We raised $8 million dollars from investors and moved about $3.8 million of it offshore. 
• Claim 3:  We committed tax fraud in the way we paid the management team. 
• Claim 4:  We improperly transferred the Intellectual Property (IP) out of Seertech Corporation, for our benefit and to the detriment of the shareholders. 

Unfortunately, a North Carolina bankruptcy court became a convenient venue for our accusers, a situation that has largely been responsible for the willingness of people to believe these false claims.

In essence, these folks (one in particular out of over 200 shareholders) communicated accusations to the bankruptcy trustee being the only person to show up at a hearing in connection with the case. The trustee took those accusations at face value and without validating them, repeated them to anyone interested in hearing them, including a reporter and the judge in the case.  In fact, the trustee acknowledged in later court testimony that he made negative accusations against us before he even had our corporate records or any other evidence that could back up the claims. All he had was the opinion of that one accuser. He further acknowledged that once he had our corporate records, he found no evidence to back up the claims. Nonetheless, he continued to repeat them, something a judge in a civil court would not allow without putting forth some form of proof.

This being a bankruptcy court where there were no "findings of fact" by the court to substantiate any of these types of claims (because they had no bearing on the disposition of the estate), the judge simply took the word of the trustee and repeated the claims. As this was a bankruptcy court and not a civil court, the judge had no mandate to make a factual determination about those claims, and was free to make such statements and repeat the claims himself without consequence, as they had no legal relevance to the bankruptcy.

To make the situation worse, those accusers then got a willing Internet editor to publish their unsubstantiated claims in a couple of Internet articles. That editor admitted that he had a "source" for the information, as he would normally never be reporting on a bankruptcy case, and in particular one on the east coast when he was located on the west coast.  Nonetheless, without asking for our side of the story, he published articles that pointed to the claims in court records. And because those documents were simply filed with the court, claimed those documents as proof of the validity of the claims. Yet, the court records that they refer to show no proof; they simply show the accusations made by those same parties, which were then repeated by the trustee and the judge.

It should be self evident that our legal system is supposed to make judgments based on evidence, not accusations. Otherwise there would be no need for trials and anybody accused of something would be convicted solely based on accusations. Bankruptcy courts are the unique exception, where judges can simply declare something and not be held to the standard that other judges are, especially if it is extraneous to the bankruptcy determination, as it was in this case. When we attempted to object about the trustee pertaining to his actions, the judge simply covered for him and cut off that process.

Anyway, when all got said and done, the bankruptcy case was closed with no action taken against management. And in the end, all those parties point to each other for validity of their claims, without anyone having to show any evidence. "A" says it's true because "B" says it's true. "B" says it's true because "C" say it's true and "C" says it's true because "A" says it's true. It's a closed loop and a circular argument. Repeating an untruth someone else said does not then make it true. Unfortunately, that Internet publication reported it as if it were true.

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So what is the reality to those claims that these folks keep repeating among themselves? Below you will find the four main claims made against management.  Following each claim, we offer a brief, factual rebuttal to each. If you are interested in any additional  evidence that reinforces the same, feel free to contact us here. 

Rebuttals

The companies were nothing but a scam to bilk investors and not conduct legitimate business. 

This accusation can be proved/disproved by answering one simple question: Was any legitimate business conducted by management? If there was, then the claim cannot be true. Either the entire thing was a scam or it was a legitimate business - it cannot be both.

As the reader can see below, these corporations were legitimate businesses.

There is ample documentation to show that

1. a real technology was developed internally, with an initial patent already awarded to our chief scientist Dr. Nicholas Pasch and COO Glenn Sanders on the technology we invented (Patent #7,173,641 Electrostatic printers using micro electro-mechanical switching elements), To see videos of full working protypes, other pictures and information about the FASwitch technology, go to the link FASwitch Info.
2. additional technologies were licensed from outside sources like Lawrence Livermore National Lab, MIT and University of Texas Austin (all having patents that we licensed), and
3. major corporations were interested in teaming with our company to pursue applications for the technologies and they would not associate their names with something that was not real. (Example: see these articles here and here)

In the light of this evidence, the claim that these companies were nothing but a scam cannot be sustained. Perhaps someone might say that the companies had poor or ineffective management (even though management did get the business far enough down the road that large and reputable companies were interested in working with them). But, to say that these enterprises were nothing but a scam is clearly not supported by the evidence.

We raised $8 million dollars from investors and moved about $3.8 million of it offshore.  

Our records document all the funds received, as well as show how all the money was spent. Over 8 years, these companies raised a total of ~$4.2million, not $8 million. We have no idea why our accusers think that we raised almost twice as much money as we did, and then hid it away. Apparently they have to believe that we did something of the sort because, otherwise, they could not claim that we bilked our investors.

Besides being able to refer to our business records to refute this claim, we would also like to point out that the bankruptcy filings themselves, which are public records, list every single shareholder we had, as well as the amount of his/her investment.  Anybody can check this. Add up those amounts and you will see that they total right at $4.2 million.

Three other points. 

1. We did not enter any false information in our bankruptcy filings. Such false information on a bankruptcy petition is a federal offense, punishable by fines and imprisonment. We reported truthfully every penny received and from whom we received it. 
2. Not a single investor declared that the amount listed for them did not match his/her investment. 
3. No unlisted investor(s) has come forward to object to not being included in the filings.

If we took in an additional $3.8 million, who did we get it from and why haven’t they come forward to claim that we took their money? That doesn't make sense from any perspective. If we did receive that mystery money, which supposedly was provided by investors who would thus be cheated out of it, why hasn't a single one of them come forward?

There is only one answer to those questions. We didn't raise $8 million - we raised only $4.2 million. That's all. The claim that we raised another $3.8 million, didn't record it anywhere, and then moved the money offshore makes no sense. Michael Sauvante and John Willis certainly would not have filed for personal bankruptcy if those funds were there.

As final proof that this is an invalid claim, we confronted the IRS about it. The Internal Revenue Service monitors all transfers of $10,000 or more out of the country. When we spoke with the IRS (see the next claim), they confirmed that they had investigated us already (because these accusers had gone to the IRS with their claim). They assured us that they knew we had not done any such thing. Contact information for who we talked to at the IRS, and where they are located, is available upon request.

We committed tax fraud in the way we paid the management team.

Like most small start-ups, we were not well funded and did not have an excess of cash. Under the supervision of our accounting firm and a tax lawyer, we created what we called a "Sustainer Loan Program" as a way to financially take care of management, until the business got proper funding. For those familiar with accounting, it would be classified under the category of "loans to partners". The shareholder group making the claims against us believed that this program was improper, so they went to the Criminal Investigation Unit of the IRS with claims of tax fraud.  

When we heard about this, we voluntarily went to the IRS to discuss the loan program with them (along with the above claim of moving funds offshore). We answered their questions in full and gave them all the information and documentation they requested. After a thorough examination, the IRS acknowledged they saw no wrong doing in the way we handled the loan program, and, coincident with the advice we had received from our accountants and tax attorney, declared it to be a legitimate tax postponement strategy.

We improperly transferred the Intellectual Property (IP) out of Seertech Corporation, for our benefit and to the detriment of the shareholders.

The circumstances here are very straightforward. Basically, Seertech had licensed the right to develop and use the FASwitch technology from its three inventors, Michael Sauvante, Nick Pasch and Glenn Sanders. The licensing agreement included performance requirements. We can provide full documentary evidence to show that the FASwitch IP was properly transferred out of Seertech and back to its 3 inventors, only after the corporation failed to fulfill the terms of the agreement granting it “conditional use” of the IP. That failure to perform resulted from the collapse in funding caused by the accusations. So the company then lost its most valuable asset and with no money and no intellectual property, elected to file for Chapter 7 bankruptcy.

Once the company was under the court's jurisdiction, even the bankruptcy trustee, who had more than sufficient motivation to challenge the transfer and take back the IP for the estate and the creditors, acknowledged that he had no claim on it and that it had properly been transferred back to the inventors prior to the bankruptcy.

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If you would like to know more, or have questions about us, our motives or our actions, we have available a much more detailed analysis of these companies and what happened to them, including a full chronology, an exploration of the relationships between the corporations, and an explanation of why management made the decisions it did. If you are interested in learning the whole story, please contact us here.

Likewise, as posted on the home page, shareholders of Rolltronics, VoltaFlex, Seertech, and any other interested parties, are encouraged to read an Open Letter from Michael Sauvante, as well as a short write-up on Ethics and Values. And finally, you can find third party opinions under the tab called Letters.