Aminet 15/Aminet 15 - Nov 1996.iso/Aminet/docs/misc/300pr.lha/0287-wonder.txt

Text File | 1996-10-01 | 14.4 KB | 247 lines

        OPEN LETTER FROM MARK HABINSKI, CEO OF WONDER COMPUTERS INT'L.



An open letter to the Amiga Community from Mark Habinski, CEO of Wonder
Computers International.

I'd like to take this opportunity to set the record straight on what
happened to Wonder Computers Inc.

First of all, a bit of background about the company will be useful.  Wonder
Computers Inc.  was incorporated on May 3rd, 1993.  Its initial
startup-cost of $48,000.00 was raised by equal investments from myself, my
father, my best friend, and a university chum.  Over the course of the next
two years, another $300,000+ was invested in the company.  That included
not only the life savings of almost everyone in my immediate family, but
also $50,000 borrowed by my father for that purpose, and additional funds
from my extended family, my friends, and my employees.  Basically, almost
everyone I knew and cared about had invested in Wonder; and those I cared
about most, had invested everything they had.  I owned just over 30% of the
company, my father owned 20%, and the rest of the shares were split among
another 20+ shareholders.

I founded Wonder with the express purpose of improving the lot of the Amiga
platform in North America.  I didn't want to get rich (if that had been my
goal, I'd have had a much better chance almost anywhere else.) I wanted to
support a starving, dedicated market, support hard-working developers, grow
a team, and eventually reward our investors.  I had some good ideas, and
some appropriate skills.  Over our 2.5+ years in business we managed to
complete almost $10 million dollars in sales to Amiga customers around the
world.

Unfortunately, my success in sales did not outweigh my inexperience in
running an operation of that magnitude.  I learned on the job, but I made a
number of mistakes, and our bottom line went from mediocre to negative in
our second year of business.  Somehow, during this process, I lost my
perspective.  I began to live, eat, and breathe Wonder Computers.  First, I
started ignoring my family responsibilities, I stopped excercising, my
eating habits became irregular.  As our situation became worse, I was
forced to borrow more and more money to keep things afloat.  My hair
started falling out, I became chronically sleep deprived (sleeping just 2
or 3 hours a night, while working 18-20 hours a day), and all the while
Wonder's situation worsened.  Our sales were increasing but margins were
falling, and we couldn't seem to make the head way we needed.  I was
clinging to the hope that Amiga Technologies would finally bring newly
built Amigas to market.  They were promised in September.

By the time our World of Amiga Show rolled around in December, and we still
had no new machines, I began to panic.  Petro managed to restore my faith
in Amiga Technologies.  He convinced me that we would actually get new
machines into Canada before the end of the month.  I felt we were about to
finally turn a corner.  The WOA was tremendously successful and retail
sales began to pick up.  December was the first month in 6 to see Wonder
turn a profit.  January started out with a boom, and when our first batch
of 4000T's finally arrived, we were on pace for a record month; I knew the
worst was over.  We were ordering more product than ever, to supply six
growing stores, and our fledgling Distribution division had doubled its
sales to other dealers monthly from October through to January.  Our
Engineering division had finally released its first couple of commercially
viable products, and substantial revenues were on the horizon.

I was on top of the world as I thought my dream of making a difference for
the Amiga platform was finally becoming reality.  Tuesday, January 16th,
the night before a routine end-of-year-review meeting with my bank, I
received a concerned phonecall from Julie Drapeau-Teed, Wonder's financial
manager.  She had used her home computer to review a couple of transactions
in our account, and she had noticed that our balance appeared to be too
high.  I didn't think that sounded like too much of a problem, and
obliviously, I walked into the bank Wednesday morning to receive quite a
shock.  My account manager took me into the office of the Bank manager, and
together, they informed me that they were calling in our loan.
Furthermore, they told me that the night before, they had placed a hold on
all of our outgoing cheques, in order to trap as much of our cash as
possible.  In effect, they were unilaterally shutting us down.  The next
two days I spent desperately trying to restore our finances.  I went to
other banks, I spoke to lawyers, I contacted our investors.  Our own people
were tapped out, those close to the business had invested all they had,
those more remote had put in all they were willing to lose.  By Monday
morning, all of the cheques that had bounced when the bank placed the hold
had caught up to us, and trustees were placed on site, (at each of our
locations), to ensure that we did not try to return product to vendors, or
in any other way reduce our equity.

Still I tried to turn things around, but a week later, we were all locked
out of our offices, and we were bankrupt.  It had happened so quickly, and
had been so unexpected, that I failed to perform all of the tasks that I
should have thought of.  Right up until the day I was locked out, I
believed I could turn things around.  I didn't consider calling creditors
as I knew I could not send them any money or return product (with the
trustees watching over my shoulder, and controlling our accounts), and I
did not want to panic everyone as I thought erroneously that we could fix
everything, and most would never need to know about our temporary setback.

When reality set in, my world came crashing down around me.  My staff was
owed six weeks of pay (as we had always kept 2 weeks in arrears, their
final paycheques bounced, and we were unable to issue the last regular
payroll.) Many of them had been living day to day on loans from friends,
and almost all were stuck.  Mortgages were on the line for the family
types, cars were reposessed, including my own.  Several people verged on
nervous break downs.  Three different parents of employees/shareholders
died in a span of a few weeks.  I had angry creditors calling me at home,
at all hours.  Terrified employees, shattered shareholders, and even my own
father were calling my home demanding explanations, needing money, and
asking for my help with an unbelievable range of problems set-on by
Wonder's demise.  In an inspired moment I wrote a letter to Jason Compton,
to be included in his press release about Wonder's bankruptcy.  I wanted to
give everyone some hope, and I prayed for a miracle.

I spent the next six weeks as a complete wreck.  Not only was my business
bankrupt, but my frantic exertions of the previous three years had left me
physically drained and emotially bankrupt as well.

By mid-March I had started to regain my perspective, and I realized that
although things were bad, my life wasn't over.  (It just seemed that way.)
My wife had come back to me, my family forgave me (although their lives
were all profoundly changed for the worse by the financial disaster.) This
is the time when I should have shelved whatever was left of my tattered
pride, and contacted the trade creditors whom I knew personally, and
apologized for what had happened.  I apologize to you now, to those who
were owed money by the previous Wonder, not only for hurting you and your
businesses, but also for failing to apologize earlier when I first came to
my senses.  I was so consumed with my own loss, and that of my
partners/employees at Wonder (and even that of our customers), that I
failed to consider the many other decent, hard-working people who had been
hurt by our demise; our suppliers.

March 28th was set as the deadline by the bankruptcy trustees to sell off
Wonder's assetts.  I realized that if I could somehow raise fresh
financing, and get Wonder started once again, that I might have an
opportunity to help make amends for all of the damage I had caused.  I
wanted to give shares to all of the old shareholers, rehire the old staff,
and pay a portion of the outstanding debts (basically the amounts owed to
employees, and fellow-amiga businesses.)

As I began to work on this task, I started to regain some of my old
self-confidence, tempered now by a great deal of recent unpleasant
experience.  I contacted Escom, I contacted NewTek, I visited countless
venture capital companies, but all to no avail.   After our recent demise,
no one with any money wanted to take a chance on me, and I COULDN'T EVEN
BLAME THEM.  When the 28th came and went I finally realized that it was
over.  I gave up.  In fact, I started to pen the long overdue apologies I
owed to so many different people.   Friday morning, when I got up, there
was a phone message from a little known customer asking me to call him
back.

Its amazing to me now how close I came to blowing what I now see as my
life's biggest and most undeserved second chance.  I really didn't want to
have to patiently talk things over with yet another customer, solving his
Amiga problems, or answering "no, Wonder probably would not be able to
reopen".

Fortunately, I screwed up my resolve, and placed the phonecall.  I was
shocked when I learned this customer wanted to talk to me about bringing
Wonder back.  I didn't think it was still possible, as the tender deadline
was passed, but the small spark of hope he lit for me caused me to call the
Trustees and ask whether or not it was too late for a new bid to be
entered.  When they answered that no, it was not too late, my hope suddenly
soared.  Kent and I spent the weekend in frantic discussion, and Monday
morning, Kent who was substantially more wealthy than I had ever imagined,
placed a bid on a large portion of Wonder's inventory, and its name.  It
has since been resolved that he would get 80% ownership of the new business
in return for his investment, and I would receive the remaining 20%, in
return for running the company.  Kent, a 20 year veteran of the business
world, would oversee the financial aspects of the business, and ensure that
we didn't get into the same sort of trouble that overtook us before .

I told Kent that I intended to divide the bulk of my portion of the shares
among former shareholders of Wonder (in the same ratio that they had owned
before); and while he couldn't really understand why I wanted to do that,
he did not object.

In this way, I felt that at least one of my debts had been absolved.  While
the new company will start out substantially smaller than the old (10
employees rather than 60), I hope that in time, I will be able to rehire
the majority of our former staff (or at least those that still want to be
part of the team.) A second debt on its way to being repaired.  Our
customers would once again have a place to shop for their Amiga products.
(Not all of our old locations will reopen right away, but once again, I
hope eventually to resatisfy those markets.) A third debt on its way to
being resolved.  The final debt, that to my former creditors is certainly
the most difficult to repay.  Wonder, at the time of its bankruptcy owed
almost 1.8 million Canadian dollars.  Our balance sheet would have shown us
in the red by only a few hundred thousand, but as the company was
liquidated for much less than its true value, the net debt to creditors is
still about CDN$1.3 million.  (Or just under $1 million U.S.)

I am still personally broke.  Further, my new boss is not interested in
repaying my company's old debts.  He's a business man pure and simple.
What choices do I have?  Well, I do consider myself to be "personally
indebted" to a number of Wonder's former creditors.  I don't feel as badly
for Bell, or UPS, the "mega companies", as I know that for them this is a
normal part of their business.  But to the smaller, Amiga based businesses
whom I was proud to think of as friends and even partners of Wonder in the
tiny Amiga market we all chose to call home, I feel personally indebted.

My options are limitted.  I can offer to repay what I owe when I accumulate
the personal wealth, but sadly that will take a long time, and I may never
be able to repay everything.  With the shambles of my current finances I
could not even begin to make such payments for years, as I try to regain a
semblance of normalcy for my family.

I can simply explain what happened, as I've done here, and ask for
forgiveness, but I know people have little faith in mere words, in these
jaded times.

What I've decided to do is offer the one things I still have at my
disposal, in an effort to make up for my debt.  I'm going to repay these
creditors with my own shares in the new business.  If they don't want to be
a part of the ownership of the new company, that's ok, I know that there
will be those who would like to buy the shares from them.  (Certainly some
of our employees would be interested, and perhaps in time, I might be able
to buy some back myself).  The Amiga creditors owed over $1000 by the old
business will each receive share packages in the mail, explaining what they
are being offered, and what exactly is involved.

Its going to take at least a few more weeks to get the legal work done, but
then they can expect to receive a package from me in the mail, including a
letter detailing the shares and their meaning, and a shareholder agreement.
Once the latter is signed and returned, shares will be issued, and a number
of Amiga businesses will become part owners in Wonder.

I don't know if you believe in God, but the past few months have certainly
reaffirmed my faith.  When I in my pride thought I was at the top of the
world, I had everything stripped from me.  When I was at my lowest,
believing all was lost, I was blessed with a second chance I knew I did not
deserve.  Best of all, I've been given the opportunity to repay everyone I
owe, and continue the job I love, supporting the Amiga platform, and doing
the best I can to help it grow once more.

I've said my piece.  I don't know what else I can do to repair the harm
I've caused.  I've made mistakes, and as some have suggested, I acted
irresponsibly (although not with evil intent), and I'm doing everything I
can to make up for the consequences of my previous actions.

I still believe in the Amiga platform, I still believe that it can make an
exciting resurgence on the international computer scene, and I firmly
believe Wonder Computers will help bring this about.

        Yours very Truly,



    Mark Habinski, President/CEO
    Wonder Computers International
   "Leading Edge Computing - Amiga Innovation"