MKRS UPDATE from SI board
My Two Cents…
Myself and Dingdong (from the Raging Bull Board) were graciously given three hours of time with the powers that be at Mikros. They were finishing up their board of directors meeting so we also got some face time with three of the Directors, Admiral Meyer, Paul Cassner and Tom Schaffnit. It was very educational. Dingdong may have different impressions, but here are mine.
Both ADEPT and the Wireless Project are moving forward, and all involved are very excited about the prospects of each program. They were very constrained in talking specifics because of the pending 10k release. I can tell you there are a lot of very bright people involved with this company, and while they have not been very communicative in the past they have their reasons. There is some painful history with the Safeguard and Lucent deal that went south when they dabbled in the commercial side of development, and they have no intention of making those mistakes again. They recognize that they have not been very communicative (other than the website), and to a person said they are now in a position to provide more updates to the investment community via PR’s. Ding and I had the same message to each person that gave us the opportunity, COMMUNICATION and PR’s.
Their bread and butter is the DoD, and they are going to ride that horse. They believe they are doing the right thing. They have to have a viable product, and they are very close. Until now their resources (limited capital) were/are going to be spent on development. Without a product they have no sales, and ultimately the PPS will rise (and stay there) when their product meets the requirements of the Navy. I was surprised to learn that although you may get “approval” on your Phase II development the SBIR does not fund Phase III. Mikros has to go out and “find the money”. That is one helluva task, and Tom Meaney and Mikros management deserve kudos for navigating through this process. When they receive those monies they need to be very judicious in how those $$$ are spent as they go through development, and continue to look for more money. While no numbers were talked about it was my impression that they feel relatively confident they have more dollars lined up, and that combined with the developments of ADEPT will allow them to start marketing Mikros to the investment community.
Individually, my impression is TM is the guy that has the connections through the Navy and Congress to secure the funding. Dave Bryan strikes me as an extremely intelligent individual who is in charge of organizing the development of ADEPT and the RWSE project. They both have very close ties to their production partners at Lockheed and DRS Technologies. Director, Paul Cassner, is a bright man, who has already built a company from ground up that was eventually acquired by a large DoD contractor, and his experience will be invaluable as Mikros moves forward.
It was an honor to meet Admiral Meyer, and he is a very down to earth gentleman. There is no question he knows the AEGIS ships, and both the Navy and Congress respect his thoughts and ideas. We are lucky to have a man of his stature on the Board.
From a funding and development standpoint Mikros’ ADEPT™ took a long time to gain acceptance within the Navy, but that has grown continually as the company has explained and developed the technology. The snowball is rolling downhill and gaining momentum. The applications of ADEPT are outlined in the Success Story, and MY guess is this will represent $35MM in revenue from the Navy alone. Their plan appears to be to move horizontally through the other branches of the military after the Navy, but these are all my opinions.
The RWSE wireless project has not had these same hurdles as the need is very apparent. The Navy is looking for fixes, and while we are still early on in the process Mikros believes they have a viable solution. The company may only be six months away (my guess) from providing the solution, which would then lead to a Phase III award, and funding. The company has an expert in this field that also sits on the Board in Tom Schaffnit. The wireless project could ultimately be BIGGER than ADEPT.
In summary, I believe the company is doing an excellent job, and have been marshalling their resources the most effective way possible. However from an investors stand point they need more visibility. The company did make that commitment to us. While they will not become a PR machine, they said they are now ready to tell their story, and will begin releasing news via PR’s on a more consistent basis. Buckle up folks. This should be a very interesting 2007.
Just my two cents.
Tom
AI
