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Haven't posted for awhile since I took the advice of other posters that some of my comments were perceived as negative and could hurt the stock but since the stock has dropped from .13 to .09 since my last post don't blame me :). Anyone who understands penny stocks knows that VSYS will not get any traction whatsoever by appearing at the odd institutional investor conference. They should spend the money on real IR and not to help the CEO feel self important by speaking to groups of 20 fund managers who probably aren't allowed to touch OTC stocks. At minimum, since their main client is now public they should do a real IR program as soon as their final US Gov't approval comes through but I won't hold my breath.
PS. Have been waiting for some real news since Feb, other than ordinary course of business stuff. I already know the sun rises in the east although I admit there may be investors out there who didn't know this so it may matter to them.
GO VSYS!
As I mentioned I recall it was discussed during a webinar at that time and the IR guy also filled me in. If I recall from 2 years ago what I was told the company did not release the name as a matter of a gentlemen's agreement more than contract. For one thing these systems can be very political and DHS said they did want the hassle of the Honeywell's, Tyco's etc. nattering at them to change their mind since they were looking at going a very different way - Freedom. The other thing was that Freedom is a pure software system that requires the agreement/cooperation of the IT departments and they have different regulations that had to be addressed so they didn't want the IT people to feel pressured. My guess is that they finally have the full support of the DHS IT department and that is why they released the agency. If this is the case the announcement is more important than noted since it overcomes the objections Viscount could face at any other agency - if it is secure enough to attach to the DHS (Immigration) network then it should be secure enough for any other agency...
News release link below announcing US homeland security (US CIS) projects. The old IR guy told me their client was US CIS and it was mentioned on a webinar.
http://origin-www.bloomberg.com/apps/news?pid=conewsstory&tkr=VSYS:US&sid=a14OgrQh8Kfs
I've seen similar sentiments expressed on this and other boards that we should all be cheerleaders but perhaps ihub should have a competitor called isheep for those types of investors.
1. No idea whether Corbett was a contractor. Corbett's linkedin:
Doug Corbett
Business Development
Viscount Systems Inc.
2005 – Present (9 years)
2. I'm a long term holder and USCIS/DHS has been known as their client for a few years through an earlier news release in 2012. I was told that all subsequent news was also USCIS so perhaps I simply knew more since I talked to their IR.
3. If vsys grows to 30M in 2 years and burns through another 2-4M getting there then no big deal to me since the company's valuation will be much higher and at higher prices dilution would be nominal. In terms of employee turnover I haven't heard they've let any employees go other than the CEO. My concern with the new hires is more a functional issue then a head count issue.
I had concerns about the old management ( long sales cycles and back end year revenue optimism) but the new ones are rehashing the same story. As far as other things such as FICAM perhaps you misunderstand that I am very optimistic. My only pessimism at all is based on calls and research I did when Raefield became CEO and found that his resume for the past 15 years (Ortega, Rosslaire, Reach, MACE) is mostly tomb stones. If he had founded one of the big successes in security like AXIS or Avigilon I'd be thrilled. Perhaps VSYS will be his retirement shining moment. I hope so.
A few comments:
Their head count is up about 5 so whether the cash burn is +/- 10k/month depends on revenue. Hopefully Q2 is strong, otherwise Raefield is smokin. They have $$ so they should be hiring more sales staff and increasing the burn to hit their revenue targets. I care about top line growth, not about short term break even.
I''m still waiting for Viscount to say something new. The US Immigration Government relationship has been done to death and has nothing to do with new management. The FICAM process was already in place and the old engineers as you say "anticipated" the requirements so good for them. The product enhancements he discussed were done at least a year ago since I sat in on a webinar where the mobile apps and QR code were both discussed and demonstrated. The old IR guy told me I believe that the QR code app has been is use at Microsoft for about a year.
I guess all I can do is keep hoping for the best and try to feel positive that Raefield can take what was handed to him and be successful. I'll take the $8M in US Government contracts at face value. Go vsys.
I give these guys credit. The consistent dissemination of non-news seems to drive the stock. This stuff confuses me. They announced the hiring of a Doug Corbett this week but his linkedin profile says he's worked there 9 years? Today they announced that their biggest customer will keep buying systems. Cool! Better than the alternative. Go vsys.
For any CEO to state such a thing is a bit absurd. No one lands 100% except monopolies. If they do real marketing and land 30% they can still be a 30-50M company.
I'm still perplexed by the ongoing discussion of the new direction of the company and the new commercial vs old R&D direction. The old management designed the technology and created all of these relationships including the US Gov't and Microsoft. Last year Freedom sales increased 300% so there must have been some marketing direction and without a bunch of senior VP's running around. Given the momentum, this Q should tell whether these changes have been beneficial or detrimental. Whether the company succeeds because of or in spite of a new CEO one can only guess. I just wish we'd see revenue based news released that are attributable to the new management at some point since its been 4 months and counting.
I spoke to the old IR guy last year and he said sites were from 15k up to about 200k but averaged about 30k (not 300k) so 30k x 50 sites is $1.5M. I'd like to see news about new projects not just the same agency buying mores sites each time since they haven't announced a new client all year.
This company was q over q so that should have continued but since they are waiting for final US Govt approval I'd agree that sales will be weighted to the back end. The powerpoint that they posted for the AGM that was accidentally their Directors meeting ppt said they'd have 50 USCIS sites coming which would be about $1.5M for Q3-4.
I haven't seen a meaningful PR since they announced US Government approval in Feb. I'm concerned that ordinary course of business announcements like a presentation is a sign of a lack of any meaningful progress on the contract or sales side. I'm concerned that the Q over Q sales increases of last year are stalling. I hope I'm surprised with the next Q.
As I said I'm not against conferences but the stock needs eyeballs and a real IR program not more potential private placement candidates or we'll see another round of dilution at .09. The only personnel changes they've announced since January is a tech support guy and a VP of sales so I agree they need sales people and in fact need field staff more than managers but haven't seen any announcements. By the way, the post referred to many smart moves... got a list? I don't have access to the company and can only go by news releases so would like to know more.
I don't know if presenting at an analyst conference will do much since most do not cover nano caps. Can't hurt either. Viscount needs regular retail buying more than institutional.
I've seen sell side pressure before when a CEO gets ousted. There is always the risk that many shareholders are not on board and that can spell trouble for small caps with small volume since long term holders start to bail, including the ex management and directors. In the long run the shares will reflect results but in the short run it can reflect the bad handling of the situation. The solution usually is that a smart new management team will do some serious IR promotion to counteract the sell side but maybe these guys don't care or aren't smart? The other option is some big announcements but the new guys don't seem to be bringing much to the table. I'll keep crossing my fingers for now but they're getting a bit sore.
The new board guy was appointed weeks ago. One would guess he's part of the new money. Let's see if he buys shares or just wiggles his tail at the options trough.
I noticed before that whenever the stock hits .09 or below insiders need to buy, possibly since the private placement was .09. The new management probably doesn't want to have new investors with unhappy faces.
I perused the Soundview report. I believe they are paid somehow by Viscount for the work and that they get feedback from the company in preparing the reports. The thing that stands out to me is their forecast of about $4.9M (21% increase) for 2014 which is again lower than Raefield's $7-8M in March and $6M at the AGM. I'm ok with .27 by year end but they need to start doing some IR and addressing the market in a real way.
I respect Raefield for being the only director to have ever bought stock. Yet perhaps there was a necessity in today's purchase since he brought $2.5M in private placements into the deal at .09 when the stock was around .14. I think if needs be he'll have to keep buying every time it hits under .09 to keep the wolves at bay. I think there will continue to be decent support around .09 for that reason.
As an FYI, big company resumes on a board is for optics. I've rarely seen any major sales impact simply because board members have contacts for vsys or any other small company. The PPT mentioned deals pending through Goldenberg who's on the board so they might get some nibbles.
I am really hoping that the technology drives sales irregardless of CEO since the new CEO's resume simply doesn't impress. The stock of MACE collapsed during his tenure (around 1.65 when he started and around .20 when he left) and that is all an investor has to go on since it was the only public company he ever ran and was immediately before Viscount - and the stock doubled since he left. So since he stands to make 3X the salary of the founder and 3X the stock options of the founder we should expect 3X the results. Time will tell.
I generally agree although the new management and board has been there since 2012 so they are really not that new. My main concerns with the old management were that they were R&D oriented and played small ball but perhaps that's since the technology took too long to release. With the change and based on the hockey stick Freedom growth that started last year + being cashed up the "newer" guys should have no excuse. My main concern has not changed however, that the new CEO is 65 and as an ex Fortune 500 type will burn cash creating a mini empire. The AGM powerpoint was all about creating organizational controls and basically continued the R&D focus already in place. It included nothing about marketing the products or an investor relations strategy to create awareness of the stock so it left me with the same concerns and I was hoping for more. Please Mr. CEO dump a few hundred K of your bankroll into IR and get this stock to a respectable .30 . Then I'll be his biggest fan
I'm starting to side with Boogins. You people are too harsh on vsys. The company value has only dropped about 20% under the new management, really not that bad for a penny and the new investors are only down about 5%. Fortunately the directors don't really own shares so they can operate for the good of the company without worrying about the daily share price. More public companies should operate that way.
When they announced initial GSA approval in Feb I talked to the company. I recall being told that the US Gov't changed their requirements in 2013 so the old CEO designed a new device - see FIPS 201-2 brochure at bottom of their website. I was told that this tiny circuit costs less that $100 to make and the big boys require 2 big circuits that are sold together for several thousand.
But to sell to US government they need GSA tested approval (in process) and UL approval (round 1 failed). If they failed either and cannot pass they are humped but I don't think modifying a small electronic board to meet UL is much of a problem since all their other boards passed but the risk is still there. My guess is that they can comply by the time they pass the FICAM tests. If I had real doubt I would dump my shares. Any delay will simply be the government test labs taking too long.
I think they will be up and going within a few months and then the rest of the industry is in real trouble since Viscount has such huge advantages so they are in great shape. Who knows, this event could even trigger a buyout.
I'm not sure what failing UL means since the current products say they are approved so it would be for something new. I'm sure they can modify any new products to pass in any event so don't panic. I think the most important standards approval on their list is FICAM. Someone at their office shared this link: http://www.idmanagement.gov/physical-access-control-system-pacs-approved-products-list. The status of Freedom has changed from application under review to Testing in Progress in the last week or so. Thank the old management team for this since the news releases predate the change. All in all I think the technical side looks good.
As I've posted before if the new CEO would only start promoting the products to increase revenue or the public company to increase share prices I'd start buying again. Hiring senior staff and recycling the same news stories as the old CEO won't cut it for me.
BTW. Is the posted powerpoint the one from the AGM. Someone on the call said they seem to have nothing to do with each other and the posted one is titled board meeting? We now now their main client is USCIS as per the powerpoint. Their news releases that state " In keeping with contractual obligations the government agencies have not been named." I hope the CEO doesn't lose the contracts for violating this obligation and posting the info to the Viscount website for anyone to share or we're all hooped.
I agree. I couldn't figure out a .09 financing when the stock was close to .14 when the deal closed but when I heard the CEO participated in the financing it figured. Perhaps it was a slip that he said so since it doesn't appear he reported the transaction to the SEC to allow investor scrutiny.
I can't get why they would drop their forecast when last year the company grew every Q over Q and hit around $1.2M in Q4. If you simply extrapolate 2014 Q over Q growth from last year at 10% ( not counting the Q1 drop with the new CEO) you end up with $6M anyways.
I am still optimistic but the powerpoint is odd with no mention of the actual growth/marketing plan. It's mostly organizational changes (rebuilt R&D desks?)and hires and the OTC/startup world is littered with the corpses of companies that cash up and think the path to success is through hiring senior managers and office renovations. Hopefully Q2 will be good and the powerpoint will focus on results and marketing initiatives and not new soap dispensers in the ladies bathroom.
The question is why would the new CEO drop the forecast by almost 40% in the space of a month. I invest in growth stocks like vsys expecting to see constant Q over Q growth and last year year's sales increased every Q and Q4 was around 1.2M -all good. This was followed by the first Q under the new CEO of a dump to 936K. Yet, Freedom last year went from 358K to about $1M so just following the trend line would put the company over $6M. ie take Q4 of 1.2M and forecast 10% growth by Q gives $6.12M. If Q1 was an anomaly you are still around $6M. So, if the old team without the staff and cash showed a trend to $6M shouldn't the new team with all the cash and extra staff be able to hit the $8M.
Hate to feel like I'm peeing on the party but don't I remember an $8M target for 2014 from the Q1 call? I took a quick look at the slide show and it shows roughly a $5.6M forecast (stretch but attainable - whatever that means) forecast. Based on how the company was already growing if this is the best the new CEO can do maybe they should have kept looking. What am I not getting?
I read the news and the 10q. The 10q includes the employment contract for Raefield and I'm pretty disgusted that Viscount's previous 8k reports as well as their proxy statement included intentionally misleading information and neglected to properly inform investors of his full compensation package. My proxy statement said he makes $175K + up to 50% bonus and 3.99% fully diluted as options. The contract includes a few trivial extras including $5k/month for rent and vacation airfare for his wife + built-in raises. We, the investors voted on one thing and the documents show something else - that for example if the company becomes nominally profitable Raefield will be raking in closing on $500K/year (all in) to run a $4M/yr company.... and if the company goes back into the red he stays at the new level oink oink OMFG.
I guess I should have taken the train from NYC down to DC for the event. Anyone else show up?
RE: "My expectations for this quarter are modest: flat to slightly rising sales and no net change to the bottom line"
Let me get this right. Last year the old CEO increased Freedom by around 300%. Sales started to ramp - up 15% on the strength of Freedom. The bottom line loss improved by 30%. They boot the old CEO for the new wonderkid. Now investors are supposed to be happy with No growth and NO improved bottom line under the new leadership?
If the old guy was somehow not cutting it yet making things better and the new guy produces nothing I'd be in favor of simply eliminating the CEO position altogether. It would save us all about $300k/yr and that would be progress at least.
So, I don't need to go to the AGM to hear the CEO to believe or not. Simply post the numbers and they speak for themselves.
Really wish these recent news releases made me feel positive but here we go again. Another old crony who along with the new CEO shared in the "incredible success" of the MACE collapse and Reach, a technology that has gone nowhere. Frankly, what is newsworthy about this anyways?
OMG, now we're talking. The new CEO is managing to keep the US Gov't and Canadian Highrise contracts that the old one landed.
PS. The only news release that really matters to me for this company over the next 3 months will be when the Freedom technology goes from "under review" to "approved" by the US GSA. I check the idmanagement.gov website every few weeks to check Viscount's status. The old CEO got them this far but things seem to be dragging under the new guy.
I hate feeling like a contrarian because I am a fan of the company and technology and know more than most here. However, the CEO hero worship is beyond me. This guy's only stint ever running a public company (MACE) had him hired with the stock trading around $1 and had him retired having driven the stock to .15. May not have been all his fault but if he's the genius he's portrayed - he had ample time to show his stuff and the only ones who got stuffed were shareholders since the CEO was making around $500k/yr for the ride down.
On the other hand I've held a very large VSYS block for several years and averaged .02 (.06 pre-split). I bought because the old CEO was buying back then and the new CEO ain't buying now.
I don't post to these sites much since people who can't deal with facts and reason resort to insults and vitriol. Here are a few facts. The stock is at the same price as when the new CEO took over. No director including the CEO has bought stock. The new CEO owns a few shares from last year, no other director owns any - not at single share. All they have is a stock options piggy bank and Directors fees. If the directors don't have enough confidence in the new CEO to own a single solitary share why would the public.Anyone going to the AGM - good question to ask! Kinda like a political candidate asking for my vote when he won't vote for himself. Hell, if they put me on the board I would at least cash in my soda/beer bottles and buy me some .10 stock.
I have a great deal of confidence this company will succeed and have nothing against the new CEO, just waiting for real news.
I wasn't a huge fan of the old CEO but this is getting silly. Same old news = nothing new. Why pay the new guy twice as much as investor money as the old one to do the same things the same way. Makes me think the CEO change was about enriching the new CEO and Board, not making the business better. Typical OTC company.
The company posted their AGM proxy forms today. Ned Siegel appears to be one of many new advisors and directors planned by the company. The proxy says they want the shareholders to increase the board to 9 members from 5. I have no idea why a small company would incur the expense. They'd be better off hiring sales people. Lots of cash and prizes for all I'm sure.
Wow, now we're talking. This new guy must know a ton of people. He's worked for at least 10 companies in 12 years. On the other hand I could be cynical and conclude that the new CEO who's appointment stressed his successes of 15 years ago seems to be hiring semi-retired cronies from the same worked for a big company 15 years ago genre. Maybe the board got a deal on walkers and everyone gets one as a signing bonus.
I will be excited to see Q1/Q2 to see what the new CEO can do since I haven't seen a news release since the new guy came on board announcing anything other than dilution. The excitement is the hockey stick revenue curve, US Government contracts, the Microsoft relationship, and the technology etc..... all generated by the ex CEO. I'm looking for new developments that can be attributed to the new guy real soon.
Perhaps replacing a visionary with a functionary is the way to go. We can only see.
I've been around shady OTC deals for years and something about this doesn't sound right. The company announced that the CEO resigned but Boogins is professing that the new CEO is having private lunches where is telling people the guy was fired for gross miscompetence. What gives?
Not sure where the hero worship comes about for the new CEO. Anyone every actually read his bio. He ran Honeywell Security 12 years ago and increased sales by $100M by buying a $100M company? In the last twelve years his bio shows he has been President of Rosslaire for 1 year, President of Reach for 1 year, President of Nexvision for 1 year - nothing that even smells like success. To top it off he became President of Mace and since he was on the Board of Mace helped oust the CEO to become the new CEO, a brilliant move that cost the company $4.1M in court for wrongful dismissal. Hopefully the ousted CEO of Viscount doesn't have that kind of claim.