' 'Peaked'? What does that mean?'
'In our analysts' view, your company is spending lots of money, acquiring equipment and real estate, flying aircraft,
and making space launches-all without any obvious possibility of translating the activity into a government contract,' Duffield said. 'You're a publicly traded company with apparently no responsibility or accountability to your shareholders.'
'I guess you just don't know us as well as you think.'
'Your outlays for new equipment don't even come close to your contracts,' Hudson said. 'You have projects on two-, three-, five-, even ten-year timelines with no contract, no requests for proposals, not even draft technology memos.'
'We're a research firm as well as a design-anddevelopment center,' Helen said. Jon took his seat, gearing himself up to defend his company alongside his wife, trying to present a unified front. 'Jon and I have spent most of our careers in advanced research, most of it begun completely in-house with no government inputs. Jon has written over a thousand papers on dozens of emerging technologies, things the government has never dreamed of before.'
'We make the RFPs and technology memos happen, folks,' Jon said pointedly, 'not the other way around. They read our research abstracts and come up with ideas based on our research. That's why they come to us when they want something.'
'But they haven't been coming,' Hudson said. 'Contracts have all but dried up.'
'We line up four or five new technology-maturation grants and feasibility study funds every month,' Helen said. 'They may not be long-term big-ticket contracts, but they pay the bills and allow us to do what we do best- design and develop cutting-edge technology. The contracts will come. Everything takes time.'
'Then we're in the dark, Doctors, because the numbers don't balance,' Hudson pressed. 'You're running a slight deficit, showing large sums borrowed from investors, shareholders, and company officers. But we look around your facility and we see at least three times the capital outlays just at this facility. And we know you have at least one other design center and three operations facilities. Where does the money come from, Doctors?'
'It's all in the audit. Read it again.'
'How much does your company involve itself in classified government projects?' Duffield asked.
'That's classified,' Jon replied. 'I could tell you, but then I'd have to kill you.' He chuckled at his own joke, but none of them laughed back. The little girl looked up from her reading-the technical journal was back on her lap, opened up to a picture of a particle accelerator in Texas, probably the only pretty full-color photo in the entire magazine-but also did not smile.
'We have a top-secret security clearance,' Duffield said. 'We've also received permission from DoD and the Justice Department to talk-'
'Not that I know of,' Jon shot back. 'As soon as I have my security folks brief me on your security status, and we verify it with the FBI and DoD, we can talk.'
'Your chief of security seems to be on hiatus,' Duffield observed. 'So are most of your senior development and operations staff. We wanted to meet the McLanahans especially.'
'They're out of the country. On business.'
'What business?' Duffield asked. 'Company business? Or is it classified?'
'I don't want to discuss it.'
'We also wanted to see some of your research aircraft, particularly the FlightHawk unmanned attack aircraft, the Megafortress flying battleship, and the airborne laser penetrator aircraft,' Duffield went on. 'None of those aircraft are on the field, or at any of your other facilities either. Where are they?'
'They must be flying,' Jon replied. 'They do that a lot, you know.'
'They certainly do-a lot more than we'd expect of a system still in design phase,' Hudson said. 'A quick glance at your petroleum bills alone and one would think you ran a tactical air wing.'
'One would be wrong.'
'You certainly have the computer capabilities to do extensive computerized flight testing on all of your aircraft, weapons, and spacecraft,' Duffield said. Jon and Helen noticed that the little girl had gotten out of her seat and walked over beside her mother, her little hands clutching the upside-down technical journal, intently watching Jon. 'In fact, your systems rival companies twice as large as yours-again, far more capability than your income stream suggests you need. You certainly use the computers you have, but for what we're not quite certain- apparently not for advanced design and development, since you seem to fly the aircraft to test them.'
'Something wrong with that?' Jon asked testily. 'Or is that a typical bean-counter question?'
'Most companies would lease additional computer systems-you purchased them, and you spend twice as much as most other companies in upscaling them yearly,' Hudson said. 'Why is that, Doctors?'
'It has to do with our security classification,' Helen offered. 'Leased systems usually means getting a security evaluation for the leasing company's personnel as well, which we end up paying for and becoming responsible for maintaining.'
'Besides, we like to have the best,' Jon responded testily. 'Is this interrogation going somewhere? Let's get to the bottom line, shall we?'
Duffield sat back in her seat, folding her hands on her lap. 'Maybe we got off on the wrong foot here, Doctors.'
'Maybe you have.'
'Sierra Vistas Partners are not corporate raiders,' she said.
'My butt tells me otherwise.'
'Jon, please,' Helen quietly admonished her husband. She turned to Duffield. 'What is it you wish, Mrs. Duffield?'
'My company is looking to invest in a small but solid high-tech research-and-development firm like yours, to help launch the absolute newest innovations in aerospace,
electronics, communications, materials science, and advanced weapon design,' Duffield said. 'We're not interested in improving current technologies-we want to develop the next-generation technologies. We know Sky Masters Inc. is on the cutting edge. We want to tap into that. We're prepared to offer a sizable capital investment as well as contributions in personnel and abstracts to be a part of it.'
'Abstracts? You mean, buy into my company with a bunch of ideas? Jon retorted. 'Why would I need that? I've got plenty of ideas of my own, thank you very much.'
'Lately, you seem to be stuck on improving existing designs rather than breaking out new ones,' Duffield said. 'We can help. We have some of the finest new engineers waiting to start.'
'In this current economic and budgetary climate,' Hudson said, 'we find it easier and better to merge with an existing firm that might be… how should we say it…?'
'You already said 'peaked,' ' Jon said accusingly.
''Peaked,'' the little girl parroted. 'That's what Mommy said.' Jon gave her a sideways smile.
'It's a win-win situation for all of us,' Duffield went on. 'We contribute to Sky Masters's continued success and sustained future growth, positioning you as the company of the future while all the other contractors are struggling to hold their heads above water.'
'We're not struggling,' Helen said. 'Read our prospectus-we feel we're more than adequately capitalized to hold us for-'
'Two months? Maybe another quarter? Two quarters at the most?' Hudson interjected. 'That's all we foresee.'
'Is that right?' Jon retorted. 'Well, the company is not for sale, and we don't need investors or outside hacks.'
'You're a publicly traded corporation, about to be delisted from the NASDAQ exchange because of low trading volume and frequency-of-trading restrictions, including halted trades and non-openings,' Duffield said. 'We've researched your personal holdings as well. You have tried to buy back your company stock and failed every time.
Your personal net worth is good, but you've leveraged many of your assets to help try to acquire your company stock. The stock has been on a slide for months, and it's hurting your own personal holdings. You're piloting a sinking ship, Doctors.'
