Secure Point Technologies Inc (fka IMSCQ)

[tedpeele]

My recollection is in stark contrast to yours - for months on end the near-consensus was that the price was double that of the TSA amount, or roughly 40k per unit. NOBODY was willing to accept the TSA number on its face. I don't know where you are getting the idea that there are 500 posts that accept the 'at cost' number.

I attempted to make sense of the TSA number, but came up without a conclusion other than it appeared to not be randomly chosen given its numerical properties.

Not much has been posted on the price for the last 6 months or so perhaps because the company made it clear the that TSA number couldn't be used to back into the actual price, but while I"m not meaning to pick on them Buzz and B9 for reasons I never understood seemed to think the price per unit was 36k. It seems pretty clear that the ECAC price is 30k at best on average and we were told at least 6 months ago that the margins on TSA are lower, so I don't know why 36k kept being mentioned.

SO, I resolved to just see what would be reported after TSA was shipped. It now has been reported, and as we saw the Gross Margins dropped substantially from the prior quarter, in great part due to the lower TSA pricing. The company said that in the conf call too.

So we now have at least SOME more clarity on how the TSA award relates to profitability.

What really matters is whether the margins are enough to overcome not just costs of products, but R&D and SG&A. I don't see how its going to happen this year since it would seem the quarter we just had is probably going to be similar to the remaining 2 quarters. If 300 units were shipped, that leaves 870 to be split in 2 quarters..435 a quarter on average - just not seeing that as profitable. I'd be happy to be shown a profitable outcome though.

This is why I am thinking a buyout would probably have to be looking beyond the current products and business prospects with TSA and ECAC to new products not yet in the marketplace.