From the 5/16/11 10-Q:
Current Business
Our company has expanded its technical installation service with a focus on the Quick Serve Restaurant market (QSR).
Effective December 10, 2010 we entered into a master subcontract agreement with Insight Direct USA, Inc., an Illinois corporation, and its affiliate Calence, LLC dba Insight Networking, a Delaware limited liability corporation. Pursuant to the agreement, our company will be a master provider of technical and installation services to an internationally renowned QSR chain. Our company’s efforts have been refocused toward the services required by the QSR. Under the terms of the agreement with Insight our company will provide Insight with IT services set forth in any statement of work issued by Insight. Each statement of work is a separate agreement that identifies a specific scope of work to be performed by our company.
Under the agreement our company’s duties include:
participating in meetings with Insight and clients for whom we are performing services;
keeping Insight informed as to progress and any delays in our services;
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providing Insight with any operational information, on request, including time sheets, installation scripts, performance logs, survey information, or inventory records related to its performance;
make a good faith effort to reach mutually acceptable provisions and adjustments with any statement of work to meet client requirements and expectations;
ensure that our employees, contractors and agents conduct themselves in a professional manner and comply with reasonable requests and standard procedures and policies concerning working hours, safety and security rules applicable to those working at Insight or any client’s facilities
Prices for services will be mutually agreed upon and set forth in any statement of work or purchase order issued against such statement of work. Insight will pay all undisputed invoices within 30 days of receipt of invoices from our company and shall receive a 3% discount on any invoices paid within 10 days of receipt.
The agreement is effective until terminated on (i) 45 days prior written notice by either party to the other (ii) if either party becomes insolvent, enters bankruptcy, reorganization or other similar proceedings, admits in writing its inability to pay debts, or makes or attempts to make an assignment for the benefit of creditors.
Our company is providing labor; trained installation teams to install cable, network upgrades of point of sale terminals, install software, and upgrade servers and cameras. The service that our company is providing is necessary for the QSR to meet federally mandated Payment Card Industry Data Security Standards compliant requirements assembled by the Payment Card Security Standards Council.
To date our company’s installation teams have successfully completed installations in ten states from coast to coast servicing multiple sites within each market. The teams have provided the position of “clean-up team” provider to our service offering. Clean-up teams are responsible for resolving technical and installation issues left unfinished by other services providers. We are very comfortable becoming the “expert” and lead provider of choice to the QSR. It is our ability to acquire highly qualified individuals and allowing them to excel within our company’s structure that continues to keep our company’s in the forefront of providing exceptional service.
Insight estimates over 18,000 locations for the QSR will require Payment Card Industry Data Security Standards compliant installation and services to point of sale terminals over the next two years. Our master subcontract agreement entitles us to an initial 3,120 locations. To complete the estimated number of installations over the period HS3 will need to train and deploy sufficient numbers of service teams to install 144 locations per week. Our company anticipates deploying 36 three-man teams to reach a goal of 144 installations per week. In this early stage of the project the company has deployed 8 three-man teams. HS3 technicians complete the two day training and testing at a facility in our Denver monitoring center. Between 10 and 16 qualified candidates participate in each training session with approximately 95% qualifying as "Team members". Two additional staff will be required to supervise the field teams.
Our company has recently increased services offered to the expanding self- storage market. Teams trained to service the QSR market have the ability to install systems and provide service to self- storage customers. Installing video cables and cameras, and providing video analytics through our remote video monitoring and data center fill a need lacking with-in the self- storage industry.
Our company anticipates the addition of these two service markets will substantially improve our outlook in the near future.
