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CSL/CSV CEO Skip Oceanlane wrote us on May 22, indicating his plans for a merger between the 2 companies. At the bottom of the mail, the following sentence: "So before I go public with all this, please let me know if you approve".

The day after we answered that we were still evaluating the request; at the same time we asked what was the point of helding a public vote, since the CEO could have had the merger approved anyways, due to the amount of shares held. We are well aware of the limitations and peculiarities of "SL public companies" and while a CEO has full control of every aspect of the company, we expect CEOs of our listed companies to reach general consensus over key issues like this one.

The same day we got the answer from Skip Oceanlane. Quoting from his email to us: "The point in voting for a merger resolution is for 1) Proper procedure 2) Better transparency 3) Ability to answer questions shareholders may have in both companies before the merger occurs."

Since then we've been evaluating our options. We reckon that in the Second Life metaverse a stock exchange is, or should expected to do some things that the "real life" counterpart shouldn't. This because there aren't regulatory bodies in SL, for example. We checked our rules twice, we evaluated the option of eventually adding new rules to address specific issues like company mergers.

On May 29, Skip Oceanlane wrote us since he was concerned about details of the merger leaking out (from our side, it would have been impossible anyways); quoting from his email: "placing a halt on both stocks will allow you the time necessary to review the topic, and for me to be protected". We complied with the request the same day (click here for the related news on the VSTEX website).

On June 1 we informed Oceanlane that he could proceed with the operation. Our "approval" was a confirmation that the proposal was not conflicting with any of our existing rules (it must be noted, mergers are not mentioned at all). Mergers should not be subject to the exchange approval anyways.

There has been a meeting already and we informed CEO Skip Oceanlane that the next one (where the voting will be finally held) will have to be in ful compliance with Section D of our listing rules.

At the time of the trading halt, CSV and CSL values were:

CSV: 1.04L$
CSL: 0.65L$

VSTEX held risk funds:
CSV 50,856.00 L$
CSL 40,357.00 L$

We do invite CSV and CSL shareholders to check Section D of our listing rules since it deals with their rights in company meetings.

Additional notes: all the quotes are from business emails and they are posted for the sake of clarity, transparency, disclosure; in good faith we believe they do not hinder anybody's privacy or reputation.

Disclosure: as personal assets of mine, I own 70,300 CSV shares; 70,000 bought during the IPO, 300 bought on the market at 0.90L$. Never sold a single share so far. On February 25 2008 I bought 9 (nine) CSL shares at 0.59L$, sold them on April 15 at 0.69L$.

Samantha Goldflake - Director
VSTEX Communication and Public Relations
http://www.vstex.net