NEW YORK-San Francisco-based World Wide Wireless Communications Inc., which has a patent pending for putting wireless network infrastructure onto computer chips, is engaged in a battle with a bank over short-selling of its stock.
The company said it received confirmation Aug. 2 that the final artwork detailing its Virtual Division Multiple Access chip and related distributed wireless call processing system had been filed with the U.S. Patent Office.
The company’s “expectations for the VDMA technology include the ability to establish wireless telephony networks without the requirement of transmission facilities, apart from the chip set itself, thereby permitting creation of such systems with very little infrastructure expense,” World Wide said.
A conventional wireless network routes calls from their individual paths, or spokes, to the hub of a central node. This method utilizes the available radio-frequency of a cell site inefficiently.
VDMA replaces the hub-and-spoke design with a fabric of low-power transmission paths along multiple routes between two mobile or stationary points on the network.
“The multiplicity of routes will generate an aggregate capacity for the network that far exceeds that of the traditional system,” World Wide said.
Once its VDMA patent is granted, an action the company said its patent attorney expected “as a matter of course,” World Wide engineers will begin final development of the chipset.
“We anticipate an additional nine to 12 months of work will be needed to finalize that development,” the company said.
Meanwhile, World Wide announced Aug. 10 it is investigating short-selling of its stock, which is traded over the counter under the symbol WLGS. Douglas P. Haffner, president and chief executive officer of World Wide, said Credit Bancorp N.V. told him its brokerage subsidiary began this action on or about Aug. 2, the same day World Wide announced its final filing for the VDMA chip patent filing. The bank reportedly also promised to cease the practice immediately.
Short-selling is the sale of a security not owned by the seller as a technique to take advantage of an anticipated decline in the stock price. World Wide’s OTC stock has a 52-week trading range of $4 at the high end and a low of about 27 cents. It closed Aug. 11 at $1.12.
World Wide said Credit Bancorp informed it that one of World Wide’s shareholders had deposited shares of the company he or she owned as collateral for a $703,000 loan. As part of the loan agreement with the shareholder, whom World Wide did not identify, Credit Bancorp engaged in the short-selling of World Wide stock as the result of an “option strategy with hedging,” World Wide said.
“Nothing in the credit facility agreement entered into between Credit Bancorp and the shareholder or in the exhibit attached thereto or in the (related) trust agreement contained any provision which would permit, authorize or indicate that Credit Bancorp would engage in such activities,” World Wide said.
Implying that Credit Bancorp’s short-selling intentionally or unintentionally caused World Wide’s share price to decline, Haffner sid that the recent drop in the company’s stock price was unrelated to any of World Wide’s fundamentals.
“[We] have authorized [our] corporate and securities’ counsels to combat the attack on [our] shareholders,” Haffner said.
“We will do whatever is appropriate and necessary to help return to the shareholders the equity which may have been erased by the activities of Credit Bancorp.”
