Bravatek Solutions Inc (BVTK)

[pennypauly]

UPDATED Bravatek DD: Why BVTK May Be Worth $$$ Soon (Updated 8-6-17, and now in 2 gigantic parts)
(by reader3)

Part 1: revisits the DD I put together a few weeks ago regarding the potential for mega telecom deals

Part 2: looks at the potential for mega deals for the Ecrypt One email server. There’s been a lot of tweeting about this in the last few weeks, so it’s time to take it seriously.

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Here’s Part 1:
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We’ve all seen the hilarious poopy pants comments. We’ve all seen the dropped hints about equity investors, and billionaire friends, and the suggestion that we hold onto our seatbelts. But this is a pink sheet subpenny stock, so we discount it, massively. We trade for small percentage gains, and we are grateful to make that, rather than lose it all. Business as usual on the OTC.

But what if it isn’t business as usual? What if something massive really is coming to BVTK, and soon? How could it happen? And how soon?

On June 12, Tom made his ‘hold onto your seatbelts’ tweet, without explanation, and then didn’t appear to follow through. Subsequent inquiries from several sources have produced responses about lawyers, and stakeholders, and coming soon.

The first 10K has now been released, but we’re still waiting on another year’s worth of financials. Which have also now been coming soon for a while, but which are, apparently, per several tweets from third parties, with the auditors, and coming soon.

The easy assumption is that Tom expected financials to be done already, and was expecting to release news soon thereafter, to make sure the company was current before news was released. That’s probably partly correct.

It’s also reasonable to assume that the final details of their contract negotiations are a little more involved and taking a little more time than he’s letting on. So it’s probably a little of one, and a little of the other.

It will happen when it happens.

But what kind of contract can suddenly produce such huge news and revenues that the CEO of a publicly held company would state that people will poop themselves?

The company has two basic lines of business:

1. Highly-secure email servers (and other related security software)
2. Telecom tower services

Item 1:

The whitelist-only email server with always-on encryption and antivirus is a brilliant combination of technologies. But the company is waiting for customers to start buying. Some of those purchases may be huge (hello, they’re in discussions with the U.S. military, and at least a few F1000 companies), but they are also almost certainly not final yet. There’s a long demo, trial, and decision-making process for organizations of this size to acquire major software… and a replacement email server is very major indeed. It’s not the sort of thing that Tom can predict with 100% certainty either. That kind of decision takes *time*.

So what about Item 2?

Viking telecom was a relatively small organization until very recently. Then, this spring / summer, they hired a rockstar project manager, and signed funding/profit allocation agreements with an additional 2 companies in virtually the same business. If you read the description of those agreements, it makes the companies very nearly subsidiaries. Independent, still, but contractually bound to allocate most of their revenue to Bravatek/Viking, while Bravatek/Viking provides funding and manages the difficult task of getting projects.

Revenues are projected to be at least a few million for each deal, per annum.

I believe this is the seed, and foreshadows, a much larger version of the same business model that is about to be revealed.

Bear in mind that Tom has been tweeting for over a month about his multiple meetings with high-dollar equity investors. What on earth for? He doesn’t need high dollar equity investors for the email server part of the business. That has already been developed, and is just starting to get major customer interest. It will sell without millions in equity infusions.

Likewise, we’re all excited about the hints Tom has dropped about being on NASDAQ sooner than we expect, and his billionaire friend and investment funds, etc. Some assume that the high-net-worth individuals are going to buy up shares on the open market, themselves; others understand that this wouldn’t require negotiations with the company, and doesn’t provide the company any cash for future projects. No, the equity investors will expect either preferred or restricted shares for their investment, and they won’t provide the cash for growth or a buyback out of charity; they expect a major return on their investment. And not just a return due to a buyback using their cash. If they wanted to run up the stock price they could damn well do that themselves. Probably any one of them could run up the stock price to 10 cents in a matter of days if they really wanted.

So what kind of major return on investment can a company with a small telecom tower service operation provide to gigantic equity investors?

Simple: they buy into a MAJOR telecom tower service operation (or perhaps two, given Tom’s communications about there being two major deals now) using the equity investors’s money, and the know-how and familiarity of their existing telecom services staff. These major tower service operations will already have major revenue, but might be regionally constrained, or might not have the cash to outcompete or acquire their larger competitors.

Enter a public company with a large group of equity investors looking over its shoulders. They can make acquisitions, or provide funding for expansion, and do it all secure in the knowledge that they will make money because the companies they are acquiring are ALREADY making money. And I wouldn't be surprised if the deal is very similar to the ones we've already seen, funding, projects, and organization in exchange for majority revenue share.

How so?

Let’s take a moment for a brief introduction to one aspect of the telecom tower industry: collocation service companies.

A long time ago, in a galaxy far, far away, telecom companies all built and operated their own towers. (Or contracted companies to put the towers up for them.) But that quickly revealed itself to be expensive and inefficient. It takes time and money to put up a tower. And if each company is putting up its own towers, then there may be almost half a dozen towers covering the same area, when all that is needed is one, with ALL the telecom company’s equipment up on it.

So the business rapidly changed. The telecom companies started selling the towers, and leasing back the space on them to locate their telecom equipment. Thus the term ‘collocation’. The collocation company builds / owns / maintains the towers, and leases the space on the towers to the telecom company. Maybe they also perform equipment maintenance and upgrades. Or maybe they hire subcontractors like Viking to do the actual equipment maintenance, and upgrades. Their choice.

Meanwhile, the major wireless telecom company bills wireless customers, manages the network, and pays their subcontractors and collocation companies regularly to keep their towers operational. The cost of the lease becomes a clear business expense, meaning it can probably be deducted from federal taxable revenues.

Consider this tweet:

Quote:
BVTK negotiating JV agreement for large stake in Telecom site ownership/ operations worth significant multiple of announced Telecom services https://twitter.com/bravatek/status/872806307354607616


That was from June 8, just days before the hold onto your seatbelts tweet, on June 12:

Quote:
Let's make it simple today: "Hold on to your seat-belts" folks. We've been busy at BVTK and it'll show this week... https://twitter.com/bravatek/status/874247169154396160


I’d hazard a guess that this tweet meant that an agreement in principle had been made regarding the above JV stake. But of course it’s a long way from an agreement in principle to a final contract, and the execution of the same, so we’re still waiting for that news to drop.

Another hint was dropped in the recent (accidental ?) release of a large loan agreement letter on ihub and twitter (yep, 20 mill!) :

https://pbs.twimg.com/media/DEpd0XKU0AQqPvP.jpg:large
https://investorshub.advfn.com/uimage/uploads/2017/7/13/kpav[IMG_0475.PNG

The relevant quote is: “This funding shall be provided, in Carebourn’s discretion, in support of your Build to Suit initiatives with the major telecommunication carriers”

Look up build to suit, and telecommunications, together. The reading gets very interesting.

www.3480g.com/build-to-suit/ :

Quote:
The idea behind the build-to-suit concept is to shift all aspects of tower siting-including zoning, construction and maintenance, to a third party. Carriers, increasingly burdened with competitive pressures, now can pass the time, capital and risk involved with tower siting to a vendor and focus their money on their core business, say build-to-suit companies.


So how big is the telecom services, build to suit, and collocation industry?

A sizeable fraction of the US telecom industry.

Here are a few examples of public companies in this industry. (There are a lot of private companies, about which I couldn’t find detailed information, and we are probably doing our deals with one or more of these private companies. The public companies here are being provided for informational purposes only. Do not expect to see them mentioned as partners in these pending deals. They are already public, and likely can already get all the funding they need.)

Lend Lease Group (www.lendlease.com). Ticker LLC.AX:

Stock price: 17.35. Shares outstanding: 564 Million. Market cap: 10.12 Billion. Revenue 2016 15 Billion Gross Profit 2016: 1.7 Billion

Of course that particular company has other non-cell-tower properties as well, so it might not be the best example, but try this:

American Tower Corporation (www.americantower.com , an REIT) : Ticker: AMT
Stock price: 136.04 Shares outstanding: 425 Million Market Cap 57 Billion Revenue 2016 5.7 Billion Gross Profit 2016 3.9 Billion

Crown Castle ( www.Crowncastle.com, another REIT): ticker: CCI
Stock price: 101.1 Shares outstanding: 366 Million; Market Cap: 36.9 Billion; Revenue, 2016: 3.9 Billion Gross Profit 2016 2.11 Billion

Additionally, read the following page, and you should get an idea of how deeply the wireless carriers are dependent on the tower owners these days:

www.steelintheair.com/Blog/2017/03/the-glorified-wireless-carrier-lease-renegotiation-bonanza.html

So owning a tower owner / operator, or partnering with a couple of them, may come with significant revenue, if the money involved is significant enough to worry the major telecom companies enough that they are trying to renegotiate existing leases.

If Tom is able to strike deals with a few mid-sized private tower site operators for funding and revenue sharing, at even a fraction of the above revenue numbers, we could see a very large share price appreciation VERY QUICKLY. And if the plan is to keep making these deals until BVTK controls a nationwide cell-site development company on the order of the above public REITs? The sky is the limit!

But how can a sub penny stock make those kinds of major deals?

Again, this is where the equity investors come in. They will most likely be providing funds SPECIFICALLY to acquire or partner with existing private cell-site operators, SPECIFICALLY for the virtually-guaranteed revenue they provide. As those revenue numbers are released (and depending on who Bravatek is partnering with they could range from a few million to several hundred million), the BVTK stock price will appreciate dramatically, and be supported by massive public interest. THAT’S what is attracting the equity investors. They’ll be in for a few years at least, during which the stock price will continue to grow, and they will count their preferred or restricted stock as an asset. And they really won’t be in any rush to sell.

And that stock price appreciation can begin very soon after Tom

1. Updates financials
2. Announces finalized equity investments (one set of stakeholders)
3. Announces finalized JV agreements with private telecom site operators (another set of stakeholders).

I seriously doubt 3 happens without 2, since it’s ultimately all about the money for the telecom site operators, who probably need cash to expand; and it’s likely that 2 can’t happen without 1, since many of these large equity investors will have stringent requirements for documentation and being current.

So, yes, we’re probably all waiting on financials, and the auditors. Tom is probably as impatient as the rest of us. And if the rumors that they could be released as soon as this coming week are true, well, watch out.

Some eagle-eyed people have noticed the creation of a new company recently. It was mentioned in Carebourn’s loan letter: Bravetek ST LLC. BVTK hasn’t discussed it at all, but I wouldn’t be at all surprised if we one day soon find out that it is to be the vehicle for some very large partnerships or joint ventures…

I don’t know how much longer it will take Cellucci to get all his ducks in a row, but once he does, it really could be explosive.

Know what you own, folks, and hold on for dear life.

BTW: Did you notice the July 24th PR confirming that Bravatek ST LLC was created for ‘Large-Scale Telecom Programs’? Well, ‘Stand by for more news in the near future regarding this important step in Bravatek's business evolution.’

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And Here’s Part 2:
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I am increasingly convinced that one or more of the mega-deals Tom Cellucci is working on is in fact for the Ecrypt One email server product, probably for the U.S. military or related government organizations.

So I’m going to take a little time to examine the publicly available evidence.

Firstly, as background, let’s acknowledge that cybersecurity failures have been in the news a LOT this year.

Secondarily, also as background, there’s the May 11 Trump executive order on ‘Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure’ which directly orders the U.S. federal government to improve its IT security in ways that overlap pretty closely with the email server product we provide:

https://www.whitehouse.gov/the-press-office/2017/05/11/presidential-executive-order-strengthening-cybersecurity-federal

There was 60 days to present this plan, so thinks should be moving now.

Thirdly, a little info about the email server itself:

Our email server operates on a whitelist only basis, so that

1. Only authorized people or organizations can email IN
2. Only authorized people or groups can email OUT
3. Only authorized people or groups can send attachments in or out

bravatek.com/solutions/software/ecrypt-one/

This basic architecture, itself, is almost enough to stop most worms and viruses in their tracks since any IT professional knows the weakest link in antiviral security is the extremely poor judgement of users who click on almost EVERYTHING that is sent to them, without critical thought. (Yes, I’m in IT, and it can be sad how trusting some people are.) By allowing only approved users to send email into the organization, you should very nearly eliminate fishing and similar operations designed to seed your organization with a viral payload.

The server, however, also combines standard spam identification features, anti-virus plugins, audit capabilities, and encryption capabilities to further secure email and make breaches more difficult.

These capabilities will be attractive not only to the U.S. military and government, but also to

- Banks, which are often the target of sophisticated email fishing operations;
- Hospitals networks, which are increasingly ripe, but soft, targets for data hostage-taking, and which moreover must abide by data security regulations which would only be helped by restrictions on the ability to email OUT
- Any large corporations that are growing nervous about the potential for a massive breach, emailed viral payload, or data hostage-taking.

If you haven’t been paying attention, you might now be thinking, “hey, that’s great in theory, but where the evidence anyone is interested?”

Well, read on. I’ll address that shortly, but first there are some basic numbers you should have in mind as you read. Software can be sold on several different models. A simple sale is often used for individual users, but large organizations often pay a license on a per-seat basis. That appear to be the model BVTK is making available.

So, fourthly, consider, please, the eCrypt pricing structure, which lists:

$150 per seat per year for government clients,
$200 per seat, per year for military clients, and
$225 per seat outside of government or military:

https://twitter.com/AdrianCantu3/status/892228631581212672

The original source for this appears to have been the Price List that appears helpfully on the Bravatek Sales library, here: www.theperformancecenter.com/BRAVATEKSALES/library.htm

What would this pricing structure mean if some big organizations that might be considering it were to purchase it across the board?

Consider the US Department of Homeland Security, with 229 thousand, employees, per wikipedia ( https://en.wikipedia.org/wiki/United_States_Department_of_Homeland_Security ) ; or the U.S Department of Defense, with 740 thousand civilian, and 1.3 million active duty military ( https://en.wikipedia.org/wiki/United_States_Department_of_Defense )

DHS: 229K x 150 = 34.3 Million / year potential
DOD, civilian: 740K x 150: 111 Million / year potential
DOD, military: 1.3M x 200: 260 Million / year potential

And outside of the government? Consider the size of one major hospital and insurance organization in this country, Kaiser Permanente, based in California, with 186 thousand employees, and billions in revenue: ( https://en.wikipedia.org/wiki/Kaiser_Permanente )

Kaiser Permanente 186K x 225 = 41 Million / year potential.

I chose Kaiser Permanente semi-randomly, because there is a connection with BVTK through the past work of the wife of the VP of Sales; however, in truth, that kind of connection is no guarantee they will be working with us. But now consider that Kaiser Permanente is only one of several large hospital networks in this country:

www.compassphs.com/blog/healthcare-trends/healthcare-fast-facts-top-30-largest-hospital-systems-in-america/

And NOW, FINALLY, let’s look at the evidence that Bravatek’s Ecrypt One is being seriously considered by at least a few of these large organizations:

On June 29, a PR was released stating that BVTK had signed 3 Fortune 1000 companies to Pilot Programs (read: trials). One company is in Health Care, one in IT, and one in Aerospace / Defense.

www.otcmarkets.com/stock/bvtk/news

Quote:
ACCESSWIRE / June 29, 2017 / Bravatek Solutions, Inc. (OTC PINK: BVTK), a next generation cyber security software, hardware and solutions provider, today announced that it has agreed to terms to launch pilot programs with 3 prominent Fortune 1000 companies in the fields of health Care, IT services and Aerospace/Defense. Mr. Jim Brown, Senior Vice President of Sales has been working diligently to coordinate the launch of our Pilot Program and these agreements signify a healthy trend that is just beginning to show the significant potential for our patent-pending software email solution, Ecrypt One.


If you feel like playing the guessing game as to *which* health care company it is, by all means, go ahead. Here are some of the Healthcare companies just in the Forbes 500, as of 2016. Note that this doesn’t include Kaiser Permanente, since it’s legally a non-profit (but, ahem, a very wealthy one):

www.beckershospitalreview.com/hospital-management-administration/15-healthcare-companies-on-fortune-s-global-500-list.html

What about Aerospace / Defense, and IT? Well, there are almost too many of them to bother making a list, and I’m getting sidetracked…

So, lastly, let’s focus on the tweeted speculation and tweeted documentation regarding BVTK and the U.S Military and related government organizations. Tom’s tweets etc. in that regard have been out of this world.

So let’s review the statements regarding military deals that may be in the works:

First, from the June 29 PR, a further statement:

Quote:
The early success of our pilot program has made it clear that corporations, as well as government and military agencies, are now seriously looking for the security benefits that Ecrypt One provides.


Then, from the endless sea of twitter:

June 16, Company tweet: BVTK Board updated on two "company game changer" late-stage sales negotiations. Input was required due to the magnitude of opportunities... https://twitter.com/bravatek/status/875704373996924928

June 21, Company tweets: Board members proudly tell BVTK management: "This changes everything"! https://twitter.com/bravatek/status/877511414025527296

Same day: “BVTK's full steam ahead in using SEWP contract with talks with DHS and DOD…” https://twitter.com/bravatek/status/877507771960315904

July 10: 3rd-party tweeted email exchange: “Are you saying this isn’t the game changer we’ve been waiting for?” “Exactly—you guys will SHIT YOUR PANTS on the game changers” https://twitter.com/hpar32/status/884419013274734592

July 11, company tweet: “BVTK's CEO invited to give detailed brief at NATO Headquarters on Monday, July 17, 2017 (fyi--not open to the public)…” https://twitter.com/bravatek/status/884760491083608064

July 18, company tweets: “NATO and Smithsonian (Jim Brown) yesterday...DHS today with Jim Brown (BVTK's VP of Sales) who's still in town with BVTK's CEO…” https://twitter.com/bravatek/status/887298959936565249

Same day: “Pentagon folks tomorrow…” https://twitter.com/bravatek/status/887299766174060544

July 19: Company tweet: BVTK's VP of Sales and CEO "on the road" today meeting with US Government and military organizations to close Ecrypt One business... https://twitter.com/bravatek/status/887660445510885377

July 20: Company tweet: BVTK's VP of Sales left D.C. yesterday after several successful meetings and now is in Chicago "spread the word" at meeting about Ecrypt One https://twitter.com/bravatek/status/888018801891180544

Editorial comment: 'successful' meetings to 'close' Ecrypt One business...hmmmm... Guess we had some pretty big sales July 19th... Just have to wait for news to be finalized and released.

July 20: Tweeted photo of Tom Cellucci with the NATO supreme commander, as well as some other recognizable figures, such as US Air Force Lieutenant General Jeff Lofgren (original source Tom Cellucci’s FB page): https://twitter.com/OTCMillionaire/status/888161922448728064

July 21, tweeted text exchange: “Nothing comes close to these mega orders we’re working” https://twitter.com/DaddyRicx/status/888539432134918144

July 21, Company tweet: "Excellent progress made on legal front with game changers...“ https://twitter.com/bravatek/status/888364109124820992

July 22, 3rd-party tweeted text exchange. “We have mega orders to come—the size you haven’t seen in OTC” “Who are these mega orders with, government?” “Both gov and telecom” https://twitter.com/Trade_Trigger/status/888776391239532544

July 25, Company tweet: Positive Feedback from last week's NATO visit is overwhelming... https://twitter.com/bravatek/status/889832046687903746

July 28, 3rd-party tweeted text exchange. “How is progress on mega deals?…” “All Going well” “With Gov or military?” “Both” … “working with Nato DHS DOD, etc” : https://twitter.com/Trade_Trigger/status/890940633845727232 ….

August 4, company tweet of a thank-you letter from US Air Force Lieutenant General Jeff Lofgren, who is currently Deputy Chief of Staff, Capability Development for the NATO Headquarters Allied Command Tranformation https://twitter.com/bravatek/status/893491751742312450 …. NATO currently has two commands, which can be thought of as current operations, and forward-thinking transformation. This is the forward-thinking transformation command. www.act.nato.int/deputy-chief-of-staff-capability-development

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So in sum, there is plenty of evidence that there is more than one mega deal, that one is with telecom, and that one or MORE are with the government and/or military. Personally, I think the NATO discussions are just getting started, and that they were a recent introduction via the US military, which is already gung-ho about BVTK's product. But we'll have to see.

We’re probably waiting on financials to go current (which should happen very soon); and then news bomb after news bomb will be coming our way.