Will WindStream Technologies' Stock Be Worth 5 Cents By Next Year?

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The missing years.

Possible lack of leadership and nepotism.

Dismal financial outlook despite $22,000,000 in orders.

Before reading the information contained in this article, I suggest that you familiarize yourself with the information in these previous articles about WindStream Technologies here, here, here, and here. It is my personal opinion that the market value of a share of this company in 1 year will be somewhere close to a nickel. I personally believe that the true value is actually a negative number, but I have yet to see the market assign such a value to a stock that is still trading. Hard to believe for a company with at least $22,000,000 in orders, isn't it? Well, each investor must decide for himself. In due time, however, I believe that The Market will have agreed with my theory, and that the stock price will then reflect the consensus.

This article will focus on some very relevant information that those previous stories may have overlooked. Also, more focus will be given to the concrete numbers behind the operation. By doing this, I think that a very clear picture will begin to emerge, showing what the future holds for WindStream's stock price.

First, open a few more of Pandora's doors with one of Bates' former companies, Avant Interactive. We have already visited the court cases and the bankruptcy. Now, how about this relationship between Avant Interactive, a man named Morton Salkind, and a famous, old penny stock called NCT Groups, Inc. You might also remember the name Salkind from the court case between Creatier and Avant, Salkind, Bates, etc. You can also read about the relationship between NCT and Avant and Salkind in this SEC filing. Most recently, Salkind is making headlines for his high-profile tax evasion case in New Jersey. Apparently, Yarosh is still seeking closure. Revisiting all of these loose ends is a story for another day.

Now, take a look at the missing years between Dan Bates' time at the now bankrupt Avant Interactive and his creation of WindStream Technologies. In my previous article, I poked fun at the fact that it only took Bates a little over a year to go from one failed venture to renewable energy. I am the first to admit a mistake, and in this case, I was wrong. It appears to have been much shorter than 15 months! Remember that Avant was going through bankruptcy around April 2007. According to the California Secretary of State, by November 2007, Dan Bates had already formed a new company, Knocknok, Inc., a chat room platform that would "allow companies to influence conversations to a certain extent by creating the chat room title." Evidently, this chat room idea never took off, because the corporation was dissolved.

Entity Number

Date Filed


Entity Name

Agent for Service of Process






Perhaps Knocknok was not receiving the attention that its ground-breaking technology deserved, since at the same time it appears that Dan Bates was also devoting some time to VectorMax (2007-2008), a company that enabled multicast videos over DOCSIS.

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Before leaving VectorMax, Bates must have forged a relationship with fellow employee and salesman, Claudio Chami, who is the Co-President of WindStream according to his LinkedIn profile. What were their responsibilities at VectorMax that gave them the experience to start up a renewable resource technology company? How do you go from bankrupt company to chat room software company to multicast video company to global wind turbine manufacturer all in a span of about 15 months? This is just one of many glaring examples that lead me to believe that this company will ultimately fail.

Tying history to the present, reference a point in time before WindStream was formed, and pull up the 8-K that was filed after the merger was completed. Scroll to page 17 and read under Legal Proceedings:
"No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years."

However, according to this site, Avant Interactive, Inc. had a Chapter 11 Petition Date of April 10, 2007. And, Dan Bates was supposedly the President of Avant Interactive. I am not passing any judgment. I am simply wondering if this kind of information is material to an evaluation of the ability or integrity of a director of the registrant? I think so.

How about WindStream's COO, Travis Campbell? Does the question on page 17 of that 8-K filing pertain to him? His bio on the corporate website as well as his bio in corporate filings talks about his 15 years experience leading up to the year 2005, when "Mr. Campbell explored his interest as an entrepreneur and built a $30 million brokerage and logistics company." Why is there no mention of Mr. Campbell's achievements from 2005 to his joining WindStream in what appears to be 2011? Wouldn't those most recent years have some bearing on the evaluation of the ability or integrity of a director of the registrant? I think most shareholders would think so. A little digging around might help to fill in those missing years.

In previous articles, it was suggested that perhaps Mr. Campbell's $30 million logistics company was comprised of Freightstar, LLC and/or OceanStar, LLC. It was also suggested that perhaps those companies went belly up. Here are some court documents from Jennings County that might support those theories; you will have to decide for yourself:


Kelly Denning & Renna Birkholz Vs Mike Fugate, Etal


Jennings County Superior Court

SC - Small Claims



Holly M Kennedy, C/O Renna Birkholz Vs Mike Fugate, Etal


Jennings County Superior Court

SC - Small Claims



Dennis Breeden Vs Travis Campbell


Jennings County Superior Court

SC - Small Claims



S & G Electrical Vs Travis Campbell


Jennings County Superior Court

SC - Small Claims



H & W Contract Carriers Inc Vs Ocean Star Llc, Etal


Jennings County Superior Court

MI - Miscellaneous Civil



Transplatinum Service Corporation vs. Oceanstar Llc, et. al.


Marion Superior Court, Civil Division 3

CC - Civil Collection



Butler Capital Corp Vs Freightstar Trucking, Inc, Etal


Jennings Circuit Court

PL - Civil Plenary



Wells Fargo Bank Vs Travis & Kristin Campbell


Jennings Circuit Court

MF - Mortgage Foreclosure



Paccar Financial Corp. vs. Freightstar Trucking Inc, et al.


Jennings Circuit Court

PL - Civil Plenary



Melinda & Scott Gabbard Vs Travis Campbell, Etal


Jennings County Superior Court

PL - Civil Plenary



Universal Am-Can Ltd Vs Freightstar Trucking Inc, Etal


Jennings County Superior Court

PL - Civil Plenary



Dh Capital Management Inc Vs Travis A Campbell


Jennings County Superior Court

CC - Civil Collection


Of particular notice is case 40D01-0710-PL-000277. If you follow the Events & Orders of the Court, then you will notice the following:


Converted Event



Converted Event



Converted Event


These documents seem to help fill in the gap from 2005 until Mr. Campbell joined WindStream; a gap that was conveniently omitted from his corporate bio both on the corporate website and in SEC filings. According to those court documents, it appears as though Mr. Campbell left the $30 million logistics empire to work at some capacity at a glass shop, where he was having wages garnished to the tune of $60/week. Apparently, he would later have something to do with Montrow Group, a local fabrication company. I can only assume that the courts would follow his employment with relative efficiency in order to keep current with the garnishments. If this is true, then it could be assumed that his employment began with WindStream right around the beginning to middle of August 2011. Why is this important? Reference back to this August 31, 2011 PlainsDealer-Sun article:
"The North Vernon City Council pledged last June to loan the company up to $1.4 million at 5.5 percent to help WindStream launch operations here. A month ago, the city council announced that the Gov­ernment Support Grant Com­mittee in Lawrence­burg had awarded the city $1 million for the project. That money is from Law­rence­burg's Hollywood Cas­ino."

It sounds as though the North Vernon City Council pledged the money in June of 2011, and by August 2011 Travis Campbell, son of the Mayor of North Vernon, had gone from being involved in various financial disputes, to working at a glass shop and at a tooling shop, to being Chief Operating Officer of a renewable energy technology company with global aspirations and a projected $55,000,000 in sales by 2013. How could that possibly go wrong? Yet another glaring example of why I personally think that this stock will trade at 5 cents within a year.

You might also want to mull over this statement from page F-26 of this 10-K filing: "The related party officer is an at will employee and his continued employment is based solely on performance. All compensation is based on market value comparisons and is not impacted at all by the related party officer's relationship to the mayor of the lender."

Maybe that is the God's honest truth. However, I have to wonder if his relationship to the mayor of the lender had anything to do with his being hired in the first place. Also, was his recent employment history taken into consideration when evaluating his ability to spearhead such an operation? I think shareholders would ask this question at an annual meeting.

Before we shift gears into numbers, I think it is of importance to notice that WindStream also received some help from the local casino. You might remember this video that showed the many companies with financial ties to elected officials that received public casino grants. However, they missed this when it came to WindStream: Reference this article:

"In order for the company to receive the line of credit, the City of North Vernon needed to change the terms of its $1.4 million loan made to the company when it located here in 2011. The money was provided by the North Vernon Redevelopment Commis­sion (TIF board) and was loaned to WindStream at 5.5 percent interest."

Why is this relevant? Well, read on:

'Chris Ertel, president of the TIF board and secretary of the Jennings County Economic Development Commission, explained the agreement in layman's terms. "By releasing a portion of the collateral having to do with exporting, the city is allowing WindStream to access other forms of financing.'

Why is this relevant, you ask? You need only to go read a PR from WindStream. Pick any of them, and scroll to the bottom. Notice any familiar names? How about WindStream's Media Contact?

Media Contact: Caitlin Ertel WindStream Technologies, Inc. certel@windstream-inc.com

It appears that after receiving multiple monies from the local governments not only did WindStream hire the son of the Mayor as their Chief operating Officer, but also a family member of the president of the TIF board as their media contact.

You might also recall that I previously questioned WindStream's ability to provide adequate collateral for the loan that they received. Turns out, I wasn't the only one who had this concern. Why did WindStream move out of the Purdue Research Park area in New Albany and instead opt for the sleepy town of North Vernon? Most likely because WindStream was asking New Albany to approve a bond worth up to $3.7 million, backed by tax-increment financing. As this local article states, "the final reading on the bond ordinance was tabled by the council at the request of Mayor Doug England's administration last month, as officials cited differences between the city and Windstream over the company's collateral to assure it would pay the debt."

Luckily, North Vernon was willing to provide the loan, and apparently the COO and a media person. I must admit that their path to funding certainly beats filling out all of that pesky paperwork for a bank loan or going through the hassle of preparing a pitch for a savvy VC firm in Silicon Valley. Perhaps they are destined for greatness after all.

With funding in place, WindStream was well on its way to becoming a global superpower. They were installing turbines at big name places like the Buffalo Bills stadium. Dan Bates commented at the time that his turbines would keep on producing power long after the football game had ended on Sunday. You can revisit the interview here, 30:00 mark. This is true, however, according to this article they would only be providing power for the next season and a half. And, here is yet another example of an installation that seems to have yielded very little in the way of corporate profits.

This rehashes and further illustrates some valid concerns brought up in previous articles: What happened to all of these installations and pilot programs? Why did none of them generate meaningful orders in the USA? Why are these things being sold in Jamaica? Why does The US Solar Institute question the SolarMill in such a way? We are still waiting on their follow-up story in which they claim "In the next segment, the Solar Mill energy production and savings claimed in the advertisements will be examined so it seems yet another episode of Solar Myth Busting is upon us." While we wait for their results, Indiana's WTHR News 13 had this to say about the original product: " ... the TurboMill, an 85-pound contraption that consists of three upright turbines capable of creating up to 500 watts of electricity per hour in winds of about 40 mph. At more everyday speeds of 8.5 mph, it creates about 5 watts."

You read that right. Five watts. Barring some technological breakthrough since then, this, once again, supports my theory about wind speed power production curves and the real world, long-term viability of these units. Notice that the story, written in Feb 2012 also says that "Bates expects the easy-to-install TurboMills to be on the shelves of home improvement stores within a year at a price of about $650." This has to make you wonder about the US Solar Institute's questioning of why JPS is selling these things. I mean, if Bates planned on being in stores by early 2013 with a price of $650, then why are they being sold now for roughly $300,000 JMD if all that was added was a single, German solar module? And if they are being sold in Jamaican dollars, then yet another concern is the declining value of the Jamaican dollar. Will WindStream's projections suffer once again based on currency conversions?

There are so many side stories to this whole mess that it becomes difficult to put it in perspective. However, they say that a picture is worth a thousand words. So, a video must be worth even more. Watch the video on this page that demonstrates how to get your SolarMill ready for a hurricane, and imagine the people of the Caribbean doing this on a rooftop during hurricane season. Also, how exactly would anyone perform that procedure on anything but a large, open, flat roof? How many of these things do you think will be purchased next year? This simply does not appear to me to be a viable solution when compared to alternatives such as stand-alone solar.

It is these concerns, supported by the skepticism of industry peers, further supported by the backgrounds of the people at the helm of this operation, further supported by the manner in which the company was funded, further supported by the hilariously misguided projections (remember they projected $55,810,000 in revenue for fiscal year 2013), coupled with concrete financial data that leads me to believe that this company's stock price will be half of a dime within a year. Why will it take that long? Because I do not think we will see what is really going on until the audited financials for 2014 come out in May of 2015. And that is based on the following set of data that has been reconstructed from the company's SEC 10-Qs and 10-Ks. Please reconstruct your own set of data, and notice that the Quarterly Statements do not appear to contain audited data while the Fiscal Year data is audited:

Unaudited: For the period ending 3/31/2013

Unaudited: For the period ending 6/30/2013

Unaudited: For the period ending 9/30/2013

Extrapolated Data for the period ending 12/31/2013 Using FY2013 - Q1, Q2, Q3

Actual Audited: Fiscal Year 2013:







Cost of Goods Sold






Research and Development






Selling, General, Admin Expense






If you look closely at the unaudited data in the quarterly filings as it compares to the audited data in the 10-K filing, then you will see that the numbers on the unaudited quarterly statements were way off in several areas: COGS had to be wildly adjusted upward, R&D had to be adjusted downward, and SG&A expenses went through the roof. Why is that? Was someone possibly reporting activity as R&D when, in fact, it should have fallen under the SG&A category? Be sure to notice the grotesque revenue miscalculations made by the company in their Executive Summary document from 2012. They predicted $55,810,000 in revenue, with a gross profit of just over $10,000,000. The laws of basic math suggest that it is impossible to achieve a profit when the cost of the goods that you sold were greater than the revenues that they produced.

Now, reconstruct the same data for 2012.

Unaudited: For the period ending 3/31/2012

Unaudited: For the period ending 6/30/2012

Unaudited: For the period ending 9/30/2012

Extrapolated Data for the period ending 12/31/2012 Using FY2013 - Q1, Q2, Q3

Actual Audited: Fiscal Year 2012:







Cost of Goods Sold






Research and Development






Selling, General, Admin Expense






Once again, you can see discrepancies. Year-end, audited revenue was lower than reported in the unaudited quarterlies. COGS were slightly lower, but still way higher than the revenues that they produced. R&D also took a haircut, and SG&A increased by a good amount. Now, put all of these numbers together with the current unaudited financial data to get an idea of where they came from, what they have, and where they might be headed.

With roughly 85 million shares outstanding (not counting options, convertible debts, etc.), WSTI has a current market valuation of nearly $80,000,000.

As of March 31, 2014 they had these financial highlights to support such a valuation:

Cash $13,806
Inventory $1,296715

Total Current Assets $2,209,766
Total Assets $2,538,588

Current Liabilities $4,110,164
Total Liabilities $5,286,077

Negative Cash Flow

Put together a quick snapshot of the working capital situation (CA - CL) = ($1,571,576). Negative working capital is typically not a good thing, especially when coupled with negative cash flow.

Compounding this problem is the fact that they had only approximately $1.3 million worth of inventory. They have a supposed $20,000,000 purchase order from Jamaica. Tell me how they will fill that order with $1.3 million worth of inventory. How long will it take to convert lines of credit into product that can be shipped? How much revenue must be produced before they are able to turn a profit? I am going to go out on a limb and predict that there will never be a net profit. I am basing this on many things, including the existence in 2012 of a supposed "Fully executed contract and purchase order of 10M $USD with Brazilian Windforce Technologica and Energia." According to the financial data above, that order was never fully filled. Therefore, I am going to predict that this Jamaican order will never be fully filled. The only way I see that it could get filled in a timely manner is for WSTI to raise a whole lot of money, which will mean a whole lot of dilution. Even then, we still cannot determine what the COGS versus revenue will be until May 2015. If it is anything like 2012, 2013, or Q1 2014, then it will be yet another loss:

Revenue $237,897
COGS $275,407

Next, take a hard look at those R&D expenses. Now, compare them to the SG&A expenses for the same periods. Does this look like a company that is performing ground-breaking research, or a company that is lining pockets in exchange for non-performance? Also, according to the numbers, the vast majority of R&D was performed prior to 2013. In an industry that is evolving literally daily, how can this technology be cutting-edge at all? How can you develop anything with a competitive edge in this sector when you have spent so little relative to your peers on the most vital component of the business, research and development? To put it in perspective, from January 1, 2013 through March 31, 2014, WindStream spent about $425,000 on R&D. Someone recently spent $900,000 to promote the stock. It is borderline ridiculous.

A silver lining is that we might get a glimpse into the validity of the 2014 projections in the next 10-Q that is due out on August 19th. You see, in that filing, I think that one of several things will happen. We will either know that they are delivering on product at a profit, in which case I will eat crow; that the turnaround time on fulfilling orders is lengthy, in which case I think that their burn rate will leave them in need of a significant capital raise in order to survive; or that perhaps orders are not being filled at all. According to this February 2, 2014 article, Dan Bates said "We have several orders that have taken us over half a million dollars." The article goes on to state that orders could go up to $4 million. That was in February. We have already seen the revenue for the 3 month period ending March 31, 2014: $237,897. That is shy of being "over half a million dollars." So, soon enough we will be able to gauge whether or not these orders are being booked. If they are not, then we know that it takes a heck of a long time for an order to be shipped, and thusly booked. And, if that turns out to be the case, then the company's burn rate will place them in a situation where they need more taxpayer money or dilutive financing from the public markets in order to survive, a situation in which they have found themselves in the past. Again, I am simply using historical patterns to make an educated prediction about the future. If you need a professional opinion, then look to this National Geographic article that outlines the recent demise of Helix Wind, another vertical axis wind turbine company who was suffering from mounting debt and negative cash flow. Do these concerns, voiced by industry veterans sound familiar to you?

"Gipe and other critics argue that vertical turbines are inherently inefficient compared to the horizontal turbines that dominate the market. They say the very aspect that lends vertical turbines their appeal-their compact, "rooftop" size-further erodes their already small potential for performance, as proximity to buildings cuts down wind flow."

"Why do we keep repeating the same mistakes?" asked small wind turbine builder and author Ian Woofenden."No vertical axis company has survived in the marketplace for any length of time."

"Making a viable wind turbine is a very difficult job. Starting out with a flawed design and flawed assumptions virtually guarantees failure"

"Companies buying vertical wind turbines often rush into the decision with overly optimistic expectations, "but once the romance is over," he said, "the accountants and CFOs are asking, 'What's my payback?'"

There are many concerns for an undercapitalized start-up company, especially in the manufacturing/technology sector. Look at what happened to Windspire Energy, Inc. In 2008, they were Popular Science's Best of What's New. By 2012, they were declaring Chapter 11 after they "lost huge amounts of funds while repairing unreliable parts under warranty." As you recall, The US Solar Institute brought up this very concern of not having proper product testing in place. In my opinion, clearing these obstacles while avoiding the many industry pitfalls is near impossible for an improperly capitalized company. Hence, the multitude of bankruptcies in the sector.

Looking back at the original TurboMill, a device that supposedly produced 5 watts at an everyday wind speed, are we to believe that these guys actually had anything of marketable value before they attached the solar panels to the wind turbines? Think about it this way: Would you attach those wind turbines to your solar panel to make it marginally more effective while increasing the price, weight, and product dimensions? Wouldn't a company like GE have come up with this long, long ago? Surely, some global conglomerate or even a half-way decently capitalized wind turbine company would have taken advantage of this market if there were money to be made. Am I to believe that this company catapulted itself from the brink of bankruptcy to selling product at a profit around the world? I highly doubt it. A reminder from their latest 10-Q filing: "As of March 31, 2014, two customers represented 98% of outstanding accounts receivable balances." In my opinion, opening a division on the other side of the world does not make a company a true global competitor. Likewise, manufacturing a widget does not mean that a company has an economically competitive and viable product. Until that next 10-K is filed, you are going to hear about all of the wonderful things that this company is doing. But, in the end, the numbers will not lie. When that 10-K for 2014 is filed, I predict that you will not see the $85,452,000 in revenue that they predicted they would have. I predict that you will not even see the full $22,000,000 purchase order get booked as revenue in the coming 10-K. What I do predict, is that the true valuation will be more in line with what they, themselves, suggested in that Executive Summary: 'With 5.5 million in revenue and $643,000 in profit, the company would have an estimated valuation of $30 million.' Since I believe that revenue will be closer to $3 million or less and that there will never be a net profit, I am predicting that after the $900,000 worth of mailers have finished hitting houses all over the USA, the stock price will fall to something closer to true valuation: maybe $5 million? That could end up being a generous valuation if their financial snapshot is anything like their latest 10-Q. Assuming they close on some financing and have 100,000,000 shares outstanding by then, the stock price would be about 5 cents per share to give a $5,000,000 valuation. Of course, if it is trading at 5 cents in a year, then more than likely 5 cents will simply be a layover on the way to $.001.

I have no horse in this race, and I truly hope that the guys in charge at WindStream are able to overcome my concerns and that the company and their employees flourish. However, I think that they need to replace some key personnel and raise a meaningful amount of capital if they are to properly execute their global aspirations. I hope that the stock promotion ends and that the company is able to grow itself so that it can warrant an $80,000,000 valuation on its own merits instead of being propped up by polished marketing material.

However, if they cannot overcome these concerns, then the factory will probably wind up empty and the taxpayer loans will not be fully repaid. The people of North Vernon, who believed in this company, could end up being the most hurt of all. In my opinion, WindStream could quite possibly follow in the corporate footsteps of Avant Interactive or OceanStar; and the stock could quite possibly end up like some of the garbage that has been on other covers of slick mail pieces, like LIFS or IMTC. Either way, don't be surprised if you see some of the names pop up again in the future in a new town with a new idea to change the world. If they do, then my guess is that WindStream will be omitted from their bio.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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