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I was debating a hire in the corporate world many moons ago. A candidate with spectacular credentials but questionable ethics was brought up. When you deal with someone unethical in any relationship, every other positive quality is trumped by the lack of ethics. Without trust, there is no chance for a good relationship; professional or personal.
This is a lesson that should be deeply imbedded in any Wave investor. Wave selling trust was a bit of an oxymoron. I believe that not to be the case anymore.
Mymoney, in looking at the facts, it is tough to argue against what you say. Sprague was more interested in selling to shareholders than selling product. He left the company in poor shape and now appears to be playing hardball with the company that over paid him his entire adult life. He should have deep gratitude for what the shareholder base provided for him and his family. Even with gratitude, it would be fair for the base to be upset. A lot of investor dollars went to his pay and he was priced for success.
I think Bill is an entirely different kind of person. He will tell it like it is and make hard choices. He will listen. The company is taking a turn towards being run like a company. The chance for success exists under his management; financial success was built in for the former leadership, but was nothing more than a mirage for shareholders.
I have followed this company a little from the skin cancer perspective, so I admit to not knowing a lot on the company itself. That said, if management was smart they would have had partnerships lined up in either an approval or denial scenario. In a denial scenario, this would mitigate any bad news associated with non BTD.
I think it is despicable to be picking on Sprague's kid. This is a kid. As soon as it was found out that Wave is going to license to the kid's company, the kid should be left alone. Beyond that, there is no need for personal attacks. If it is found out the kid is doing something improper that affects shareholders, comments seem to be fair game. This has not been shown to be the case.
Articles:
my question is this:
Why write these articles a day or two before new information from the FDA? It seems PVCT investors are obviously very sensitive to the FDA guidance and any movement creates a heard mentality. Would have been more responsible to wait until after info from the FDA to write the articles. In that situation there is a lot less speculation and the share price will move on facts, not rampant speculation.
Child’s Illness Steers a CFO’s Career
I do not know the nuances of this company, but interesting article on the CFO:
http://ww2.cfo.com/people/2014/05/childs-illness-steers-cfos-career/view-all/ (full article)
His daughter's cancer led to a job with a drug-maker that, after 10 years of intense capital formation, is now listed on the NYSE.
David McCann
Peter Culpepper: fighting the good fight.
Culpepper, 54, has been in charge of finance for 10 years at Provectus Biopharmaceuticals, a cancer-drug maker. Its most developed product, PV-10, is an injectable treatment for advanced cutaneous melanoma. It’s just wound up Phase-2 clinical trials, where it was used effectively among test groups. The company has applied for a “breakthrough therapy” designation for PV-10, which would accelerate the approval process, and also is working on treatments for other forms of melanoma as well as liver and breast cancer.
It was in 1999, when Culpepper was controller at Metromedia International Telecommunications, that cancer, suddenly and sadly, became his passion. His oldest child, Victoria, 5 at the time, was hospitalized for what was initially thought to be an epileptic seizure. The actual diagnosis was far more sobering: brain cancer.
Most of the tumor was surgically removed, leaving the family to evaluate treatment options. It was agonizing. Culpepper and his wife consulted with medical professionals at all of the top cancer hospitals in the greater New York area, where they were living at the time, and didn’t like what they heard. “They were calling for two years of chemotherapy and full-body radiation, just horrific amounts of chemo and radiation,” he says. “We just felt helpless.”
Texas,
he is not up for reelection.
Not news, but the pvct home page looks much more professional and more clearly articulates progress of PV-10 and PH-10.
Exactly Vorlon. Unless he subsequently sold these shares prior to bad news on BTD, this indicates (right or wrong) that he believes there will continue to be value above the exercise price. It would seem he does not believe there will be bad news from the FDA between now and whenever he decides to sell the new shares. Definitely not negative and points to the belief that he believes he is sitting on value.
Player,
take it from Munger:
"This is how Warren Buffett’s famously blunt partner Charlie Munger last weekend characterized the relationship between the board’s pay and CEO pay:
'You start paying directors of corporations two or three hundred thousand dollars a year, it creates a daisy chain of reciprocity where they keep raising the CEO and he keeps recommending more pay for the directors.'"
Telstar,
good point. The post no longer has relevance with a new management team.
PVCT
A rising stock price is great, but even better is BTD approval indicating the drug will help people with skin cancer...spectacular story all around with BTD approval.
Summerblaze, you can know the rules of basketball better than anyone and then subsequently join a game and get your rear whooped. Point being, words <> credibility; even Latin ones. :)
Alea,
I am not talking about right and wrong. I have no need to be right and I am often wrong.
I am talking about a statement you made about credibility. Your words do not prove you are credible. Since you challenged my credibility to offer an opinion, I think everyone would like to see you prove yours.
Thanks in advance.
Alea,
you are not responding to my request. Please establish your credibility per my request. You have stated you are credible. Please prove it to the board. Putting someone else down does not make you credible. From my perspective, it does the exact opposite.
FYI, I meant a tiny P&L, but I am obviously a little sloppy with my words.
Alea,
Please post your resume so we can establish your credibility on these boards. I have posted some of my background, what is yours? You seem to be very fond of your own opinion and believe your opinion matters more than others.
Just in case you mistake tenure in a position as credibility, it is not. I have hired people who have been in advanced finance for five years that were much more effective than people in it for 30 years. Point being, if you tell me you have been a CFO for thirty years I want to know how good of a CFO you have been. I ask for this because you have stated you are credible. Please prove it.
Thanks in advance.
From Q&A
When can we expect initial revenue and at what scale?
A: We believe it will be a relatively short time frame from signing this agreement to Wave being able to record initial revenue.
As for the scope and scale of revenue, it’s very hard to assess at this point. Like any new offering, it’s most likely that it will take some time for awareness and understanding to be built with customers before any larger scale deals would be likely. We’ll certainly know a lot more in a few quarters when we have some experience with this solution and customer reactions to it.
Q: How does Wave get paid?
A: For every device on which WidePoint provisions a digital certificate onto a TPM, Wave will receive a “meaningful” per-device royalty.
I don't disagree. Let's just see how it plays out.
I will stand by my thoughts that management either thinks they did not need to sell shares when 20 mm changed hands or they were foolish not capitalize on the opportunity. You have contended the CFO needed time to figure out what was necessary. I cannot support my position with facts since it is an opinion. If you can support your position with facts, have at it...I will gladly listen. However, please do not mistakenly represent an opinion as fact.
Alea,
we'll just agree to disagree. You have more of a desire to prove you are right than I care to or need to prove.
Alea,
we will have to agree to disagree on this one. The complexity of a $100 billion balance sheet does not compare to Wave's. I know first hand. Beyond that, the first priority is solvency.
Alea,
The company had $20 mm in revenue, that is a tiny cost center in a big company. It is not as complex as you make it. The number one concern of Bill and company is to keep it a going concern. Certainly these are conversations that occurred on day one of the job or during the interview process. The current CFO would have asked questions related to the balance sheet prior to being hired.
You can view one K or Q and have a good understanding of what is necessary. You are over complicating things. They didn't move shares because they are either foolish or they truly did not need to move them.
If the new CFO does not understand the balance sheet and cash flows we have a problem. I don't think that is the case. Beyond that, Bill obviously has had the opportunity to review and consider. They didn't sell shares because they didn't think they needed to sell shares. Either he is crazy or crazy like a fox. I don't think it will take that long to figure out which it is.
Alea,
if the balance sheet was hampering sales, there was a 20 million share day where shares could have been moved. Why not move them? Ignorance? Stubbornness? Or knowledge that rendered that option unnecessary? I would like to think the CEO has a good handle on the situation, but you never know.
Right on Alea.
Bill is either crazy or crazy like a fox. There was no issue with liquidity in the past month.
Thanks for digging for that number TKC.
Alea,
the problem with bundling is the fact that it is not a business on its own. If you sell to the middle man and they don't sell, it will only be an income stream for the duration of the contract. Walmart will not continue to stock the shelves with product that is not moving.
No doubt bundling has represented a stable revenue source for Wave, but it clouded prior management's thinking. "They don't get it" = run for the hills. I am sure Bill would gladly take a nice reliable income stream, but I do not think he would be naïve enough to believe this would be enduring without offering the OEM valuable differentiation or parity with other OEMs. Bundling royalties are a means to and end with a nice sweetener.
Bundling will be an ancillary revenue source. Get your product out there and get some royalty from it. If this was ever going to be a primary revenue source, it should have been viewed as very temporary. Without end user use, what is the point. Why am I going to give you a juicy royalty for something no one is using or intending to use. The race for serving Dell's base should have been frantic once bundling began.
Dig,
some of the falling Dell revenue could be offset by increasing royalty rev from Samsung and others. New royalty agreements will not be as favorable to Wave. That said, as Bill stated, this is not going to be the primary revenue source. It will come from end customer sales.
Alea, I think erosion is a good term to use. As I believe Bill stated, the decline will be related to no agreement on new SKUs. Perhaps former leadership viewed OEM royalties as an end sale and primary rev strategy. It was dangerous to be addicted to Dell. The real revenues are related to actual use of the product.
"The November 2011 amendment to Wave's software license agreement with Dell, among other changes, extends the term of our software license agreement with Dell by five years to January 18, 2017. Additionally, the per-unit royalties that Wave receives for each Dell PC model shipped subsequent to November 1, 2011 with Wave's EMBASSY Trust Suite software were decreased by approximately 25%. The amendment also provides for an additional per unit royalty equal to 285% of the base royalty for notebooks shipping with both a universal serial hub module and at least one internal authentication hardware solution such as a fingerprint reader or smart card. The amendment also increases the per unit royalty rate by approximately 33% for each trusted drive unit shipped after October 31, 2011."
From the sound of the call, Bill believes they are going to turn things around. If you listen to his introductory comments there was nothing shared that would excite shareholders. However, as questions came in, Bill opened up a bit about how he truly felt.
To your point, he clearly intimated that he knows fed sales. He knows shareholders expect a lot considering his background. At this point, you either believe that they can move it forward or you don't. Clearly Bill believes they can.
The headline revenue number left something to be desired, but there were a few green shoots. The strategy that was previously being pursued was not working. They have shifted to pursuing higher margin, larger enterprise customers. Bill previously intimated this would take time but that he is pleased with the progress in the pipeline. The fact that they are truly concerned that they may need to scale up should tells us he is either a liar, a fool, or wisely contemplating what it will take to support a growing business.
Alea,
true, its tough to argue that when something occurs it would have happened. That said, right or wrong I have an opinion.
Nothing to count in this case. PCAST makes recommendations. The president either actions on them or he doesn't.
"In addition, in accordance with the terms of the Company's Amended and Restated 1994 Employee Stock Option Plan, Mr. Sprague's outstanding options which were exercisable as of his termination date remained exercisable for an additional three (3) months after his termination date. Mr. Sprague was not granted further vesting privileges and he did not exercise any of his exercisable options within the three months after his termination date."
Considering these recommendations are concrete and very actionable, I would be surprised if we did not see an executive order.
Executive Orders from PCASTS's recommendations have come about 6-9 months out.
PCAST makes recommendations to the office of the Pres. and the Pres. in return considers these recommendations and in this case we hope an Executive Order mandates use. An executive order related to TPMs would certainly be beneficial to Wave.
PCAST
The recommendations from the PCAST in Nov of 13 appear very adoptable (below). It looks like other PCAST's recommendations became executive orders 6-9 months out. That puts it between any time now and August. An executive order around the use of TPMs can only further aid Wave's ability to sell.
• Phase out within two years the use of unsupported and insecure operating systems, such as
Windows XP, in favor of modern systems, such as current versions of Windows, Linux, and Mac
OS.
• Encourage the universal adoption of the Trusted Platform Module (TPM; an industry standard microchip designed to provide basic security related functions, primarily involving encryption keys), including for phones and tablets.
• Encourage the universal adoption of the latest, most secure browsers to facilitate prevention of identity theft.
• Move toward nationwide availability of proofed identities for people, roles, devices, and software. While voluntary in the private sector, these should be mandatory for transactions and data exchanges among Federal users.
• Encourage effective Federal use of automatically updating software, including cloud hosted software, both for COTS and GOTS2 products
Dig,
it is tough to argue what you say. A lack of scrutiny resulted in a big expense to shareholders.
Dig,
in that case they should be congratulated for doing it the right way.
I presume everyone saw that the Target CEO resigned as a result of the data breach. If this does not make it easier to get through to a CEO I don't know what will other than an all out gov mandate. Without proper protection of your sensitive data your job is literally on the line.
Alea,
it does look goofy, but all this should be caveated until more is known. That stated, Wave investors were not treated fairly by the prior regime and are understandably jumpy.