Lord Fauntleroy, I don’t use PM on I-hub.
I think I understand the areas of commonality and disagreement. In common, we both would like for MZEI to reach its potential to improve the human health condition and provide material economic gain for shareholders.
The points of disagreement largely center on qualitative decision making by management and the status of willingness of investors to hold management accountable for its decisions or not to.
I am willing to debate issues of significance to the company and am open to receiving information that alters my views.
The person referred to has several times asked via post if I would reimburse MZEI for its expense in implementing a poison pill. I have no idea why this poster attributes such to me apart from the possibility that in the February/March timeframe of 2010, I was among a group of shareholders who sought to 1) have a shareholder meeting; 2) seek the functional expansion of the BOD; and 3) seek assistance for the executive offices (whether that would be accomplished by leaving EM as Chairman and bringing in an experienced CEO or hiring consultants, etc. – help could have been delivered several ways). The request would have left the existing management and BOD in ‘control’, so there was no contrary threat. If such an effort and subsequent BOD action to implement a poison pill provides a nexus for the poster, then so be it. I don’t view EM to have taken offense at the request as it was after this time that I acquired part of my holdings via a PPL.
Clearly, it can be argued that being an R&D company with patents applied for and low valuation, the BOD should have implemented a plan of continuity in any event as if successful in the receipt of patent(s), MZEI was a takeover candidate. Irrespective of the genesis of the BOD action, I think all investors should ask whether they are more or less secure for the action taken by the BOD. In other words, whether or not I or others were instrumental in the BOD effecting such action, shouldn’t such action have been taken by the BOD in any event? By the way, I take no credit or responsibility for said action. When thinking through the logic of the issue, why does the person continue to ask the reimbursement question other than to instigate some faux controversy?
When the stock price isn’t doing well there is a tendency amongst posters to blame the market makers, blame the market, blame Eversull, take it out on each other, etc. While most of us understand that technological development takes time, this doesn’t give rise to cart blanch managerial accountability. The more recent spate of disagreements likely have their origin in many investors losing money. In Ed’s 2010 Christmas message one point he made was essentially stop whining, investors are up 800%. By the yardstick of capital appreciation, note that with average trading volume and price action over the last 2 years, fully ½ of all shares outstanding are today under water. Understandably, the camp of discontent is growing.
I continue to think we need a shareholder meeting or minimally, a real conference call, not an infomercial of selectively chosen topics.
Amongst the most important fundamental questions are:
1) What is the status of the product? We were told by Dr. Zoutman in his FIME speech that the product was essentially finished apart from the ‘skin’. We have been told that the device needs to be validated in the hospital setting so as to demonstrate both efficacy and economics. Presumably this economic validation process has some longitudinal characteristics not present with mere efficacy studies. We have been told that F500 companies need to see some level of ‘market acceptance’ of the product and presumably the testing needs to be completed before material indications of interest (sales) emerge. So then, why haven’t hospital beta tests begun? I think the markets are picking up on the inconsistency in words and execution, and this should be explained.
2) So far, sales to the hospitality market have not been linked to cost savings. In other words, efficacy trumps economics and a longitudinal study seems unnecessary. When the bugs reappear, reapply. In this respect, the hospitality market is likely to be the foremost timely market. What is it that MZEI is waiting for Purdue to finish (what information is being sought) and when will that be forthcoming? Thereafter, what is the plan of hospitality testing? What additional work has been done to size the annual revenue potential from this market?
3) What is the status of the Lab testing?
4) Irrespective of the market (healthcare, hospitality, lab, food, arenas, defense, etc.) what is the marketing plan that will sufficiently demonstrate ‘market acceptance’? Without more information demonstrating sales, it appears the current plan/staff isn’t sufficient. Also, one needs to assess the satisfaction of the level of acceptance with the capacity of MZEI to deliver units and at what point is a co-venture/sale/license arrangement needed? If the threshold of ‘market acceptance’ is relatively low (say 50 units) and can be forthcoming from any industry (i.e. the F500 company doesn’t care if acceptance is demonstrated in healthcare, hospitality, defense, just someone, anyone, buy this thing) then perhaps current staff would be able to demonstrate such if given enough time. For higher levels of acceptance across each prospective industry, MZEI lacks the capability to timely demonstrate such. I don’t believe investors know what constitutes ‘market acceptance’ and what the plans are to demonstrate such and then fulfill such. If MZEI received a 1,000-2,000 unit order, how would it be fulfilled?
5) The news about the patent two weeks ago was welcome. What are the process and time hurdles for the portfolio of patent applications and how do such influence the F500 company’s interest in MZEI other than some general, the more the merrier effect?
It’s been quite a while since MZEI announced the first trial results and nearly a year (perhaps a month or two longer) since it began the process of ‘finalizing’ a commercial product. For folks who bought into the company on the basis of the promising science, they are becoming inpatient for the linkage of scientific efficacy and commercialization. Such should be understood by management and is the principal reason pharma companies, as an example, update investors on development schedules. In this context, commercialization takes on both the science side (ability to produce a machine capable of delivering the demonstrated science) and on the business side.
Is all this asking a lot of Ed? Yes. To whit, the opening comments about expanding the front office and the BOD that many of us saw being necessary a long time ago.
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