Wednesday, October 30, 2019

SIMA off Grey Market and Requiring NDA

Unfortunately SIMA has decided to require an NDA now to receive their annual reports.  It makes me so mad I'm going to just post all their old reports.
Here are the numbers:

These numbers show a stable cash machine.  Even with the recent run up to $11 the stock is not expensive.  

In the past year the stock has been written up here on Value Investors Club and here on Focused Compounding.  

In Apr 2019 SIMA named a new president and surprise,'s the old president's daughter.  As always I thought change is good so hoped something was coming.  

In Oct 2019 SIMA came off the grey market and onto the OTCmarkets Pink No Information tier.  I'm not certain how this happened but I don't think the company did it.  A friend called OTCmarkets and was told the change is from one of OTCmarkets' subscribers who "wanted to get it quoted on an unsolicited basis."  I imagine someone paid OTCmarkets but I don't know who. 

Also in Oct 2019 SIMA decided to hold an annual meeting for the first time in forever.  I think this is their first annual meeting since they went dark in 2002, but don't quote me on that as I'm not 100% sure.  Here's the proxy.  

The most amazing thing about the proxy and annual meeting is they have a webcast!  I've only ever talked to their lawyer so this is my (our) first chance to ask the company questions.  They say shareholders can ask anything during the webcast.  I suggest all shareholders call in and ask them what they're doing to manifest fiduciary responsibility.  
The 2019 Annual Meeting of Stockholders of Sonics & Materials, Inc. (the “Company”) will be held on November 22, 2019, at 4:00 p.m. Eastern Time. For your convenience, we are pleased to inform you that the Annual Meeting will be a completely virtual meeting, which will be conducted via live webcast. You may participate in the Annual Meeting online, vote your shares electronically and submit your questions related to the proposal below during the Annual Meeting via a live webcast by visiting Details regarding how to participate in the meeting online and the business to be conducted at the annual meeting are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.
 I don't get it.  I was excited when they came off the Grey Market.  I was through the roof when I saw they have an annual meeting with webcast.  And then my heart sank when their lawyer responded to my report request with an NDA.  If they are just trying to satisfy the state law then why have the webcast.

Here's what the lawyer told me
The Company has determined that an NDA is necessary given that the financials are not widely available and contain sensitive information. As you may know, the Company is not a reporting company and thus does not publicly file or post its financial statements or other information. Regarding 2(f), for this reason, stockholders should not be disseminating the information to other stockholders – rather, the Company can provide the financials directly to any other stockholders once an NDA has been executed. Lastly, please note that an NDA is not required in order to view the annual meeting webcast.
What a bunch of BS.  There is nothing sensitive about their annual report.  It's just numbers like any other financial report.  SIMA may have de-registered from the SEC but they are not a private company.  SIMA holds a fiduciary duty to do what is best for shareholders and hiding in the darkness is not it.  If anyone wants the latest annual you'll have to buy a share and contact their lawyer:
Robert A. Barbieri 
Finn Dixon & Herling LLP 
Phone: (203) 325-5022 
You can also contact the company or president Lauren Soloff

SIMA, if you want to be private then buy out all minority shareholders for a fair price.  You are still traded on a public exchange.  You still have shareholders not named "Soloff"

disclosure: long SIMA


  1. Hi Dan, Thanks for the heads-up. What do they require as proof that you are a shareholder? Is a brokerage statement sufficient?

    1. Yes. Just redact your sensitive information.

  2. What percentage do they own?

    1. I always wondered that until getting the proxy. The president and her family own 73%

  3. It's absolutely ridiculous when management requests an NDA from part owners of a business, why not just post the financials on their website then?, or go 'pink limited' and put them on the OTC markets website which doesn't cost much.

    I might buy a share so I can join to the webcast and pepper them with questions!