NVE Corporation’s (NASDAQ: NVEC, $45.88) CEO Dan Baker was employed by Printware Inc. (PRTWZ.PK, $0.03) from May 1990 until January 2001 when he was replaced as President and CEO after a group of dissident shareholders assumed control. NVE hired Baker 18 days after he was replaced at Printware.
On July 2, 1996 Printware had its initial public offering (“IPO”) at $6 per share valuing the company at $30.5 million. On October 14, 1996, three months and 12 days after its IPO, Printware reported an unexpected and not pre-announced 26% decline in revenues. Less than 12 months after its IPO on June 20, 1997 Printware’s stock had lost 53% of its value and closed at $3.13 per share. It is now trading for $0.03 per share.
Throughout the decline Baker issued statements that were later shown to be wrong and unjustifiably optimistic. Baker’s questionable statements were made in the form of quotes in company press releases and news stories. In almost every earnings release Baker found something that “delighted,” “pleased” or “especially pleased” him. Baker occasionally added that his company was “gaining strength,” “meeting goals,” “seeing great potential” and “well positioned.” This was not the case. Printware failed and so did its stock. On June 3, 2002 Printware’s shareholders received in a liquidation payment of $2.00 cash per share. Printware last traded for $0.03 per share.
During 2000 with the dissident shareholders pushing for a management change Printware was the subject of two irregular “takeover” offers from bulletin board listed companies. In December 1999 Yarc Systems Corporation Inc (OTC: YARCQ.PK, $0.0001) was a $0.20 stock. On February 28, 2000 Yarc announced that it was discussing a business combination with Printware. Printware’s stock closed at $3.25, up 21%. Yarc withdrew its offer on April 7, 2000 and Printware stock lost all of its gains.
Between January 5 and March 6, 2000 Piranha Inc.’s (OTC: BYTE.PK, $0.008) stock price went from $2.90 to $65 per share. On December 15, 2000 Piranha’s stock was trading back at $3 per share. On December 18, 2000 Piranha issued a press release announcing that it would “immediately commence a tender offer to acquire all of the shares of Printware in a proposed tax-free transaction . . . at a purchase price of $3.75 per share.” This represented a 67% premium over Printware’s closing stock price the day before the offer. On December 18 Printware’s stock price closed at $2.75 per share, up 22%. Two days later Printware’s stock had lost all of its gains. On February 16, 2001 Piranha issued a press release withdrawing its offer.
On April 24, 2002 the SEC began an investigation to determine if Piranha’s CFO, Richard S. Berger, Piranha and others had issued false and misleading press releases, overstated the value of assets in SEC filings, understated expenses and failed to disclose unauthorized payments to Berger.
On March 31, 2000 a group of dissident shareholders filed a proxy statement with the SEC to remove and replace the incumbent board of directors of Printware including Baker. On June 7, 2000 Printware’s shareholders elected the dissident shareholders’ board nominees. Then on January 11, 2001 the newly installed board appointed Dan Baker’s successor as President and CEO of Printware. On January 29, 2001 NVE hired Baker as its President and CEO.
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