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Amigo Mike

05/10/11 3:02 PM

#656 RE: Willy #655

Willy,

I think I previously mentioned that there would be some crossover in the "move" process. HEPI did not want to disrupt production.

Thus production was to continue in the current HQ until such time as the new facility was ready to begin the production cycle (ie from the beginning).

Do I think it should be completed by now ? Yes. However, if I had to guess I would guess that HEPI was not prepared to move at the time the lease was signed. I'd guess they didn't have a contractor on standby to do the work to customize the space for HEPI. Doubt money was set aside for a contractor or to buy new equipment. Doubt Gorman has managed this type of process in the past. Money I'm sure is a factor as HEPI would certainly have to be spending some money to make this happen.

Overall, today, it does not matter if HEPI has actually moved yet. It matters as to whether or not HEPI can meet the production requirements of the Xooma contract. We all know that things never happen with HEPI in the stated timeframes. As noted above, my guess is numerous things weren't taken into account when the move in 30 days was PR'd.

Delays are not unusual for HEPI.

Amigo Mike