Management quality and integrity are very important

One example is AOB management (they are acting at shareholder's best interest). Here are the 2 situation that they faced and the decision that they took.

1. That management will not get stock option as long as the stock price is below $2 (and the stock was below $2 for more than 1 year and no one did get any stock options for more than one year)

2. Existing stock options are at $2 strike price (way higher than the price that day) and the new option exercise price will not be lower than $2 strike price even when the stock is at .80(and they stick with it, while a lot of other companies are busy repricing and backdating option)

AOB management could have change the rule (which is listed in their 10K) and still get the option anyway or get option strike price at $1 but they didn't, instead they just focus on business operation and execution. Eventually the stock takes care of itself. Talking about integrity. that's a great demonstration of integrity IMO.

AOB management remember their fiduciary duty to shareholder and act at the shareholder best interest. (and not to just make themselves rich or any other reason). The only questionable move is the issuance of private placement when the stock price is very low, but they used the cash raised through the PP smartly hence it is fine (it turned out to be fine).

Demonstration of integrity doesn't have to be only on big decision, but it can started fromthe day to day smaller decision (like the stock option case above). People that have high intergrity will be more trustworthy, which seems to be rare in the wall street as the last couple years there have been so many bad choice that management made (and scandal) that took down the company with them. Also the financial restatement, and stock option issue.

This is one example of why management quality and integrity are very important for a company success.

Sidarta Tanu
Disclosure: I own this stock in my portfolio
I am not recommending anyone to buy or not to buy this stock. Microcap stocks are usually very risky, volatile and thinly traded and not suited for many investors (and definitely not suitable for short term trade.)

My success story with AOB

I bought a lot of AOB (AOBO.OB at that time) about two years ago betwen $1-$1.3 (and still holding most of it as I still like their growth prospect). With great sales growth, profit margin and a "peace of mind" balance sheet (ample cash with no significant debt). Valuation wise isn't too cheap now but looking at their potential growth it might be worth it long term. Talking about vote of confidence, Morgan Stanley bought $25M worth of stcok at $4.8 (market price at that time) each and some warrant with exercise price of $6+ which could be seen as a vote of confidence (which makes me feel good because I paid a lot less than the big boys.) I can write for pages why I bought AOB at the first place but in short AOB was earning .10-.15 and no debt and I see them earning .30 within 2-3 years and at $1, that's 30% annual return on the original investment. Obviously I was wrong, only 2 years gone by and they are already earning more than .30 rate per year). I was so excited and was buying like mad, and I even read AOB's 10Qs during a dinner with my friends in a restaurant (I know this is too much but earning was released that day, I can't help it). They asked what I was reading , I said, earning report on a stock that I own which should worth $3-$4.5 in 2-3 years (on 10-15 PE assumption) is trading at $1 now. I also did send someone to go and check their product (and that the company does exist).