To All,
Last night we had a private room at a great restaurant in San Francisco. Steven talked to us for four hours. This was a small group of investors, about 9 to be exact. Other than Barge, me and XAM, the others do not post on the boards.
These are only my impressions and I will gladly welcome corrections from XAM and Barge.
I sat next to Steven and Barge was on the other side of him. I could not get in a word edgewise because Barge kept talking to Steven about WEB Services. Actually this is a joke.
I got in a lot of questions as did XAM and Barge. In four hours a lot can be discussed. I keep hammering him on finances and here is my impression on what he said.
He said that a SP investment is probably not going to happen. The reasons given were that it is very difficult for a company to invest in a Public company. They have guidelines, committees and a lot of bureaucracy involved with it comes to investing in public companies. Now, if we were a private company, the deal would be much easier to do. I don’t think it is going to happen but would be surprised and happy if it did.
He admitted that we probably need between 4-5 million dollars, in the short term, to take us where enough revenues will kick in satisfy our burn rate, which by the way, is coming down as fast as they can manage it. His goal right now is to get that short-term money without having any dilution, Zero. In order to do that he needs to get the money from the sale of assets. I got the impression that sale SOL is the best possibility and that other things are in the works such as finding a buyer for our SSP stock. He would love to see SSP bought out. He mentioned that with our holdings, anyone of the other major holders of the stock could take over the company if they so desired. We are the swing stockholders of SSP stock that could make the deal happen. He said we still have good relationships with SSP.
I asked him about Maximus and DoD. He was give permission to show us a slide where it listed companies that were able to do business with the Govt. Unless you are on this list it is not possible. The list was headed by Northrop Grumman and many other names you would recognize. These companies hope to have a plan for security by April 2004. That is the first deadline they imposed on themselves. (I hope I have this right). We were right in the middle of only about 10 companies.
Back to financing. I got the impression that he is not worried about raising funds before October. I asked him why we need more money now when we were told that the last funding should carry us to the end of the year with projected revenues. He said some of the deployment by the OEMs is being pushed into Q1 of 2004, NOT ALL, but some. But on the bright side, he expects to be shipping 1 million units a month next year.
There will be MANY PC OEM’s deploying our Tech in the box before the end of the year. The numbers will really gear up in 2004.
Infinion and National are prime sellers and he mentioned STMicro as a strong contender to be coming on board.
I told him some insider buying would go along way with regards to the moral of the stockholders and to the street. He said that some insiders have been trying to buy for the last four months but their lawyers have not let them do it because with material news coming out it would look like they bought on inside information.
I got the impression that we will get an announcement next week. He said we would get one more than a week from now and less than 6 months. I would bet a lot of money on next Wednesday or Thursday. I do not know how good it will be but I believe we will get something. I think the announcement could be regarding SOL but that’s just my guess.
He said he was in the Bay area to work with a company that is working with HP on touch computer screens for voting. Barge and I did not buy this explanation as to why he was in California. We think there were other reasons but he could not talk about it. Again, that’s just Barges' and my opinion.
He reiterated we are the glue that holds TCG together. Without Wave there would be no TCG. He says the others do not understand what Wave has developed. They are in the dark as to what is needed and what we have. He felt as soon as HP deployed enough units along with IBM that all the others will fall into place. The reason he said they don’t understand it is because the box makers are only selling boxes and they don’t understand what is inside to make them work. They are only interested how much each screw costs. He seemed very confident we have begun the rollout and that it will only increase as time goes on to the tune of a million units a month next year. I believe he said the only difference between a trusted computer and one that is not, is about $25.00. Which one would you buy?
Oh yes, two more things. We talked about putting a shareholder on the BOD. There are positives and negatives. The positive is that it would make a great story in the Wall Street Journal and the negative is that it would not play well with institutions and major partners.
NEC. Seems FINREAD is a long way off and we have the only working unit. The Banks are not moving fast enough in this direction. However, he believes NEC will be interested in TCG though out the area they service and that this will happen before FINREAD.
The Compac/HP deal with Israel is still there but in limbo due to EDS. I got the impression it will happen but the time line is unknown by everyone.
As I keep trying to end this post another thought came up. There is no way Wave will be bought out now at this stage of their development. A buyout possibility will only occur after millions have been deployed and we are running cash positive. I totally agree with this assessment. Again, the POSSIBILITY will be there at that point in time, it does not meen it will happen then or ever.
As Barge and I drove round trip from Los Angeles to San Francisco and did not get home until 5:00 A.M., I am sure that I will remember more things when I wake up and will put them up.
I will say this. My son was there, and he had never heard Steven speak. He is 31 years old and owns a lot of Wave, for better or for worse. He told me, and this was unsolicited, that if he did not own Wave, he would go out and buy it the next day after listen to Steven for four hours last night.
That’s all for now.
Snackman
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