Friday, May 26, 2006

GTXC Moving to Fully Reporting?

The obvious question is "how?"

GTXC has no employees in the functional areas/departments of: sales, marketing, support, customer service, operations development, product management, Q/A or engineering.

GTXC has no revenue. They sold off DishTV Now (they sold it for only $500K, for a division that had $10M in sales, and actually made a profit too.. more on this in the next blog post)...but that group (DishTV Now) was the only revenue generating entity. And, to date, none of the "licensing" or "marketing" agreements have been consumated or produced (and are unlikely to produce) any revenue. GTXGlobal.. er Gatelinx.. has generated no revenues on their own and they even admit that they have little faith in their receivables (which include the $2M each from Govalin and Heelstrike) are ever likely to be real.

GTXC's previous financial reporting and filings are full of holes, inconsistencies and outright falsehoods.

GTXC's "executives" are ghosts. No history, track record or presence in the marketplace. Their previous "CEO" (Curtis Garth)was the former "sales manager" for the DishTV Now call center. And, before that, he was a sales manager for a car dealership in Fayetteville, NC. ( .. which, his bio in the financial filings do not mention this little gem. Hmmmm... I wonder why?

Wall Street wants 3 things. A plan, a management team, and revenue. GTXC has none of these.

This new addition, Conrad C. Lysiak, Esq., at least has some kind of presence. You can google him and he's actually done securities work. He's in Spokane (which begs one obvious question, Southern Pines NC to Spokane? Given the indictments of all of GTXC's and Hagen's cronies in NC, I guess that makes sense)

But the one big question for Mr Lysiak is.. WHY? Why would you take on this client? They don't pay their bills (every lawsuit, outside of Brady and Stefanik, were default judgments against David and Annette Hagen, GTX Global, GTXC and/or Gatelinx including the state of California for 3 THREE default wage claims and labor commission judgements).

Why would he risk associating his professional practice and standing with these clowns? Is this a "knowing" decision? Is he aware of all this baggage? or is this just a retainer deal that creates nothing but smoke and mirrors? My guess is, given how David Hagen operates (and that his corporate counsel isn't licensed to practice law in NC and never has been licensed in NC.. only Pennsylvania).. my guess is this is just another part of the scam.

Last comment.. the comments and contributions to this blog (and by inference to the detriment of David and Annette Hagen) are greatly appreciated. They've turned, however, to comments about ex-employees (who cares whether or not Eugene Lebedev is falsifying his resume?) Folks, some of them don't address the main issue here. GTXC IS A SCAM.

Please, post whatever you want.. secretly, it is kind of fun to hear (again) some of the dirt... but, if it has some context that further proves that the technology is unfinished, doesn't work, never did, or other "inside" scoop on the financial dealings and operations.. that's better.

Oh, I guess one more thing. To someones comment about the technology "mostly" working. Stefanik published technical specs that said each server would handle 10,000 concurrent users. Making the econmic scale a no brainer, and.. if that was true, the early "pre-optimization" roll-out a technical scale winner too. The reality, however, was that 100 - 200 users at any time couold access the server. Quite the miss, eh?

Candidly, Stefanik made that (10K users per server) up as a "goal" with Hagen's involvement and approval and had no clue as to how to get there. His public announcements (directly in speaking engagements, and indirectly through the sales and marketing organization) would have been, and was by Kelly, uncovered. Since the technology has had little "optimization" it's likely that has also been uncovered by the Govalin's, Heelstrikes, Yadios... and hopefully... the market at large. This thing, HAD potential... it could'a worked. But it doesn't.. it won't... and GTXC IS A SCAM.


Anonymous Anonymous said...

As a person who was employed by this fiasco of a company for a good while, as a developer, and was screwed over in similar fashion as most of my colleagues (though others endured far more brutal treatment), I've been interested to read this blog, especially as it's dug up a lot of dirt on what was going on behind the scenes, providing at least a bit of a framework for understanding why some of the crazy things I saw happening were happening. I have to agree, though, that the comment about "Mr. L" is pretty off the mark (though it does have a little bit of irrelevant personal irony for me). I think at this point, though, you've kind of opened the door for anyone to dig up anything funny-looking with "Gatelinx" or "GTX" attached to it and post it here. Somebody looking at the situation from outside is not necessarily going to be able to make the distinction that you'd prefer between things that reveal the true colors of the Hagens/Defuscos et al, and things that just suggest some other shenanigans somehow associated with the company, but which are in fact not all that remarkable (and are probably being misinterpreted anyway).

4:18 PM  
Anonymous Anonymous said...

hey.. I care whether or not Eugene is falsifying his resume. It's a big deal, because no where does he say he was working on the AI project. If, as one of their big announcements says, its a big deal (despite trying to sell it 3 times) and the supposed "director" of the software development effort doesn't even say that's what he was working on, what does that say (again) for GTXC's legitimacy? The only cool thing about the AI demo was when you would ask 'aime', "who is annette?" and David had programmed it to say "Annette is Dave's ho." Priceless. Except that she wasn't dave's ho, she's Chuck Mannings.

4:43 AM  
Anonymous carl said...

The obvious question is "how?" GTXC has no
employees in the functional areas/departments of: sales, marketing,
support, customer service, operations development, product management, Q/A
or engineering. GTXC has no revenue.

My opinion is that Hagen thinks he's figured out some kind of
loophole that will allow him to "Fully Report", while still obscuring the
true picture.

The same way he used multiple companies to avoid contract restrictions,
uses a fake CEO to head GTXC, etc. There has even been some speculation
that the whole Manning/Annette affair may have been a ruse to move some
assets overseas, or to protect against bankruptcy. Lets face it, Hagen is a slippery character. He can be very charming in person when he wants to be, but you have to assume if he always thinks he has an ace up his sleeve.

Based on a conversation I overhead right after we moved to the Winn-Dixie in Aberdeen, I would guess that Sales
and Marketing will be moved to a separate, non-fully reported company,
with GTXC making its fictional revenue by licensing its technology to this
second company. A setup like this could allow revenue to appear on the balance sheet which in reality is coming from one of Hagen's other companies or even Hagen's personal assets.

This will allow him to obscure the fact that there is no real revenue. It is also clearly meant to answer some of the critics, such as this blog. "It can't be a scam if we are fully reporting," they will say. And you, I and all the others who actually know the Hagens will still see it for what it is., shenanigans. That's right everyone, go get your brooms, I call shenanigans on the Hagens.

To someones comment about the technology "mostly" working. Stefanik
published technical specs that said each server would handle 10,000
concurrent users

That number rang a bell, so I went back and did some checking. I'd intended to write a book about my life as a grunt-level developer if Gatelinx took off, so I kept some pretty extensive notes about stuff I heard about the corporate culture and personalities at Gatelinx.

It appears this number was never presented to Stefanik as possible.
It was a theoretical calculation based on an early design of the network
layer and back-end signalling protocol.

It seems that the people in the know were telling both Stefanik AND Hagen, that a reasonable number might be about 2,000, if we were given time to nail down all the bottle necks and issues with the

It appears that Stefanik blurred the difference between the realistic goal
and a theoretical limit. Whether this intentional or not, I'm unsure. I've witnessed him doing so on multiple occasions. He is very good at it at selling the bogus information. Even early in the development cycle, he would use the present tense to describe a feature that was still on the drawing board, for example. Again, its not clear to me if he is stretching the truth to the breaking point, or he really believes what he is saying.

As the person who said it was "mostly working", I stand by my claim. As I
have said before, developers were telling Stefanik and Hagen that we
needed a lengthy feature freeze and additional staff in order to resolve
issues just like this one,

It seems that one of the big issues at Gatelinx, back when it was actually developing software, was communication between the Marketing/Sales staff and developers. Almost all of this communication went through Hagen and Stefanik, so I'm guessing that we were both told things which were not absolutely true. For example, Sales and Marketing were told that the product was ready to ship and sell at a time when virtual no-one in the development staff felt that it was ready. It being their job, S&M sold the product admirably and were of course angry when it didn't work. Hadn't they been told that the product was ready?

On the developer's side, we didn't know that this was being claimed to be a "ready" product. We were of the belief that this was pre-sales and that any customers were being informed that it would be 6 months to a year before a true 1.0 release. So, of course we got increasingly frustrated with S&M when they demanded that the product behave as if it were ready for shipment.

Of course the developers were jarred from that belief at the end of summer 2004 when we were told a customer was going live with their brand of the communicator. Of course that was a flop, I don't think that customer was able to entice very many people to download the software much less install it and pay a monthly fee to use it.

The end result is that all the hard work has been wasted. A tremendous personal cost has been paid by all of us. Not just in the matter of pride, but financial as well. Some ridiculous amount of capital has been squandered, all because Development and S&M couldn't talk to each other frankly, honestly and directly. Yet again, Hagen shot himself in the foot.

While the number of users that the servers could support was not
known exactly, it was well known and common knowledge among the developers
that work in that area was desperately, desperately needed. We were never afforded time to do proper stress testing of the system. Plans kept being made to do it "soon", but there was always some more important issue that needed to be developed before we could do this. Much like the functional specifications you mentioned earlier. Development kept saying the needed to be done, but no time was ever scheduled for it.

There were, by the way, a great deal of technically oriented specifications. Every time I started any development for Gatelinx I was handed a heft document. I had to acknowledge that I recieved it and when I returned it the print out was shredded. The only exceptions I can think of are the UI developer and Manning who worked from home. I'd assumed they'd had the same arrangement, but I never witnessed it. If who ever took over after the 2004 shakeout couldn't find them, they either didn't know where to look on the network or that repository got damaged during the Brady fiasco.

Anyway back to the point, from my perspective, it's not so much Kelly discovered these issues, its
that he re-discovered them. The 2004 shakeout got rid of almost anyone who knew about these issues or had a complete view of all the details of the system. Of the "gang of four" I originally mentioned, only Manning was left. From my other sources, I can say that he was largely out of the development loop by the end of 2003 for various reasons. Partially, it
was that he was rarely if ever on site or in email contact with the developers.

While he and I got along passably, he'd alienated several developers with his need to be "alpha-geek" as he called it. Manning was always right, even if a specification, RFC or empirical data said differently. Of course, this rubbed people the wrong way, and when Manning was proven wrong he seemed to bare a grudge against the person for quite some time.

Finally, Stefanik specifically kept him at arms length from the rest of the staff. His concern appeared to be that Manning would mention something about the network layer which we were not supposed to know.

The only person left on the staff who, as far as I can tell, would have known about them was Hagen. And lets face it, he wasn't about to let that cat out of the bag. He was far too obsessed with being the "next Bill Gates" to look at the limitations of the software truthfully.

My last point in this lengthy post, regarding publishing part of Eugene's resume. I agree this opens a dangerous door for the potential of personal attacks between ex-employees. Although the team of developers I worked with there were the best I've ever worked with, none of us were or are perfect people and I'm sure that lots of mud could be slung. So it is in all of our best interests to avoid doing so.

This probably contrasts against my comments about Manning, appearing hypocritical. However, I'll defend myself and say that I am simply repeating complaints that I heard on an almost daily basis from the other developers at Gatelinx. I'm not accusing him of dishonesty, just being difficult to work with, and perhaps not being as good a software engineer as he is a programmer. And from conversations with him, I think he would agree that he was not the most team oriented person on the staff.

I never worked with Eugene directly, but I did speak to him on a regular basis. Based on that knowledge of him, I took it that Eugene was just trying to keep to the letter and spirit of the NDA he signed when he started at Gatelinx. The NDA was very strict, not permitting us to speak about anything that wasn't previously disclosed about the company, its workings, source code, etc. Until the initial press releases, most of us wouldn't even say where we were working or on what. I could see such a vague resume entry being required to meet it for someone who worked on the AI project.

For the developers on the communicator project, life is easier since a great deal of the functionality was released in press releases, patent applications, marketing material and demonstrations. For the members of the AI team, there is simply one press release, which I would be embarrassed to reference if I were them. So, I didn't really see any malicious intent behind the resume.

6:17 AM  
Anonymous Anonymous said...

wanna move to fully reporting? Then disclose how much Hagen has taken out fo the deal. After the surge when the shares became unrestricted, they've struggled to trade more than 200K shares (some days going under 100K). How about an 8K filing for the new CEO, CFO or departure of the old CEO? How about some 10K filings for the new CEO and CFO's comp? Fully reporting my behind...

11:12 AM  
Anonymous Anonymous said...

Chuck and Annette a ruse? I wouldn't put anything past these 2. But, does Annette having all the new ink/tatoo's part of the ruse? All she needs is a collection of action figures and the black fingernails to match Chucks.

6:58 PM  
Anonymous carl said...

I wouldn't put anything past these 2. But, does Annette having all the new ink/tattoo part of the ruse?

Well, tattoo can be removed by laser surgery these days. If you worked there or are working there, you know the lengths the Hagens will go to in order to sell a story.

So, yeah, I think its entirely plausible that she went out and got some tats in order to make the story more convincing.

Although, my first question is, "How long and how often did you see her with the tattoos?" For a short period of time those henna tattoos look just like real ones.

So, if she's only been seen for a day or two, they could easily be hennas.

3:29 AM  
Anonymous Anonymous said...

"Carl" you're right on the money. The development group was a disaster. Q/A, if you could call it that was 2 guys. And one of them worked part time. Here's one of them, heir to the parker pen fortune and "close" friend of Annette Hagens.

Notice all the inconsistencies here too? Can't anyone associated with this tell the truth?

11:35 AM  

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