The Question Regarding Why Visual Edge IT Set Up A New LLC
So, the new leader steps onto the stage. Did the question about the new LLC get asked?
Don’t the employees who have held on to hope that the company could actually start performing financially deserve openness, transparency, and honesty from the new leader? Especially after what I saw as complete nonsense from the previous CEO.
It’s amazing how a non-financially performing mega dealer got a free pass from the industry’s media, as its former leader continuously gaslighted and distracted regarding its financial relationship with its BDC Lender Ares Capital.
So, I am really hoping the new CEO of Visual Edge IT, Oh, I mean (VEIT,LLC of Delaware), didn’t go off on a merry-go-round of nonsense when asked about why Visual Edge IT was merged into the newly established VEIT,LLC of Delaware. If so, I truly feel sorry for the company's employees.
At the meeting last week in Vegas, I am thinking the new CEO should have clearly defined the financial position and the reason shareholders were paid off, with some shareholders saying the payoff was only 0.05 per share, as Visual Edge IT merged into VEIT, LLC of Delaware.
The new CEO should have explained why Ares Capital financial engineering was necessary, as two loans totaling over $40 million reached maturity in December 2025.
I believe the company’s employees will face a few more surprises as Ares Capital decides what to do with this investment which has cost Ares Capital massive losses. Ares Capital has lost millions in interest as loans sat in nonaccrual. Ares Capital wrote off that senior/subordinate loan, which had been in non-accrual for over a year in the 3rd qtr of 2023.
This senior subordinate loan on Ares' 10-Q at the end of the 2nd quarter 2023 showed a principal amount of $112.4 million, an amortized cost of $87.5 million, and a fair value of $45.5 million. In the 3rd quarter of 2023, Ares Capital recorded a $48 million loss on that loan, its largest loss across all assets that quarter. In that write off Ares Capital also took a preferred position against the balance.
Ares Capital preferred position has been rapidly decreasing in fair value since the 3rd quarter of 2023. When the 10Q showed a fair value of $45.5 million on the preferred position. In Ares Capital 3rd quarter 10-Q ending September 30th, 2025, the preferred position's fair value had deteriorated by nearly 55% to $20.6 million.
Now, keep in mind the topics the old CEO discussed during this time. We remember the nonsense about the Football Hall of Fame sponsorship. Remember the interview with the guy with the hat, where the old CEO said If you can afford to do it. That was definitely a WTF moment for anyone paying attention to Ares Capital 10q’s and 10ks as they related to the loans to Visual Edge IT.
Now thinking about the 4th quarter of 2025, which ended December 31st, 2025, there were two loans with acquisition dates of 7/23 and maturity dates of 12/25 that needed to be addressed. One loan shows a principal of $7.1 million, and the other shows a principal of $33.7 million. I expect these loans were written off, and that Ares Capital has taken the company's total equity.
Ares Capital will post its 10k this week. I also predict that Ares Capital will sell this company in some form. I still believe a deal with DEX Imaging makes sense. Ares Capital would be better off giving Visual Edge IT to DEX Imaging and taking an equity position in DEX Imaging.
I just don’t see Ares Capital continuing to believe in the vision of Visual Edge IT becoming a nationwide IT services company. It seems incomprehensible that Ares Capital will continue to invest in something that has cost Ares Capital so much in losses.
In closing; To the new CEO, I appreciate the mention of my work at your meeting. However, I suggest you don’t imitate the company’s previous CEO and actually share viable arguments over gaslighting and distractions. I am thinking the employees you lead are damn tired of the distractions from the company’s leaders regarding the company’s financial realities.
Stay tuned to The End Of The Day With Ray!
Ray Stasieczko
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