ITEX - letter from Chairman

[Guest Bronco]

Are we allowed to comment? 

[Parsad]

Hi Bronco,

 

No, not at the moment.  We are currently in the midst of the proxy solicitation.  Once this is all complete after the AGM is over in December, the board is welcome to discuss the company, but I would ask that members refrain until then.  Thanks very much.  Cheers!

[Guest Bronco]

Ok...thanks...I kept my message vague/short b/c I wasn't sure.

 

I'll revisit this story in December.

[Guest ValueCarl]

With an official tally coming down pike in four business days, I wonder if the investor group will be seeking to count "CHADS" during this period?

 

If not, I can only speculate that the next year will be comprised of placing much more pressure on White, etal, to run this business for "growth" and intelligent capital allocation.  ;)

 

  Based on preliminary results, it appears that each of its current members of the Board of Directors, Steven White, Eric Best, and John Wade, were re-elected to serve for an additional one-year term and the selection of Ehrhardt Keefe Steiner & Hoffman PC as the Company's independent auditor was ratified.  Preliminary results as tabulated by the Company's Inspector of Elections, OTR, Inc., will be announced within four business days, and final results will be announced promptly following certification by the Inspector.

 

http://www.itex.com/aboutus/pr/itex_corporation_announces_preliminary_results_of_annual_meeting/116/

[Parsad]

For all intents and purposes, we lost the proxy.  Our committee members, particularly Dave and Rahul, did a fantastic job running this thing on a shoestring budget!  Ironically, the one large shareholder group that ran their own campaign against ITEX a couple of years ago, decided to vote FOR management this year and cost us the election.  I personally expected this group to withhold their votes, since both ISS/Riskmetrics and Glass-Lewis had signficant concerns about corporate governance and board independence at ITEX.  But then I chalked it up to this group having difficulty recognizing corporate governance issues within their own organization, so why would they recognize it at ITEX or anywhere else.  C'est la vie!

 

It's funny though, I personally have a very good relationship with some franchisees, even those that put out a letter against our group, and I think the board in general is open to dialogue.  The problem is that the CEO is as stubborn as a mule and is reluctant to have any cohesive dialogue with our committee.  I can only imagine that long-term, they would much rather prefer to have us on their side, then the large shareholder group that just voted for them.  But that isn't up to us, as only they can make that decision.  

 

All in all, shareholders have been very approving of the initiatives the company has undertaken after we brought them to their attention.  I just hope ITEX decides to do what is in the best interest of providing security and opportunity for their core franchise base, as many of these franchisees do not like the uncertainty and discourse permeating the company.  We don't enjoy it either, and will do everything we can to work with management, as we have in the past.  Ultimately, it is up to the CEO to decide if he wants to be constructive with his largest shareholder base.    

 

I'll have plenty to say about this in our quarterly letter, and even more in our annual report which only goes out to partners.  Nonetheless, we aren't going anywhere and look forward to doing this again next year if necessary!  The ball is in ITEX's court.  Cheers!