Looking for Upturn : Wastemate Needs Change at Top, Shareholder Says
Upset by Wastemate Corp.’s lack of working capital and a dearth of current financial information, a shareholder has asked the San Diego-based manufacturer of water-powered garbage disposers to replace its board of directors at a special shareholders meeting on April 5.
In a Jan. 15 proxy letter to Wastemate shareholders, Charles Herbert Seaton, a former consultant to Wastemate who holds 968,242 shares of the company’s stock, complained that despite its $4.1 million in debt and equity financing, Wastemate now suffers from a $599,869 working capital deficit.
Wastemate has missed Securities & Exchange Commission filing deadlines for recent annual and quarterly reports and has recorded revenues of just $112,810 since its founding in 1976, Seaton said.
“The lack of working capital is the bottom line,” suggested William Jenkins, Seaton’s attorney. “He considers the company’s financial situation to be grave.”
Wastemate’s president and chief executive, Leonard G. Spelber, acknowledged that the company has missed certain SEC filing deadlines but argued that the revenue slide and working-capital deficit will be reversed during the next six months.
“The company has been somewhat underfunded for the past three or four years,” Spelber acknowledged Monday. “We generated no revenues whatsoever (during) the past year when we’ve been turning the company around.”
Spelber, who tied the company’s cash woes to a 1981 initial public offering that received a lukewarm response, said a distribution agreement with an English company will generate more than $500,000 in revenue that will be used in a “turnaround of our production plant in San Diego.”
Both Spelber and Seaton believe that if the company solves its financial problems, Wastemate’s technology will capture a healthy chunk of the market now dominated by electrically powered, in-sink waste disposal units.
