Replies to post #106246 on Wave Systems Corp. (fka WAVXQ)

[warbil]

dig,

You are correct. The associations and contributions of each of the parties included in the bid proposal are spelled out in the proposal in some kind of a work plan. I suspect that the Embassy price list was also included in the bid proposal to the government. The work plan in the proposal is usually referenced in the deliverables in the final contract and are normally in line with the responsibilities outlined in the proposal. First of all, if Wave wasn't needed for the project, they would have never been listed in the proposal. For them to be listed, they have to be more than just a casual participant in this project.

Second, there is room for some change in the final contract but governments typically don't approve proposals from contractors who present subs to complete specific tasks unless there is some kind of guarantee that the subs can/will perform. Again, we can assume that Wave is more than a casual participant in this proposal. There has got to be some kind of a memorandum of understanding between Wave and these contractors when the bids are being submitted and they are not as informal as some would like to think. If I am going to be listed in a proposal and I think I have something valuable to contribute that might help win the contract, I will want something in writing to protect myself in the event the contract is awarded to the team I am on. In some cases, the proposal itself can even be used to protect ones interest in an awarded contract as it lists the understanding of the parties submitting the proposal.

I am encouraged that Wave is partnering with more than one contractor in proposals being accepted by the government. That tells me that someone likes what Wave is offering and no one else can provide it better than Wave. These are not exactly small projects we are talking about.

[tkc]

Re: future funding. Wave should have a fairly good conservative guess as to the value of Wave's share of these two significant Gov contracts. With executed contracts and a couple of P.O.s outlining quanities, items, prices, delivery dates and payment terms - sufficent enough in $$$ to demonstrate the value of the overall contract and thus reaching Break-even in the forseeable future - then shouldn't Wave be able to obtain a reasonable Credit Facility w/ GE Capital or IBM Capital? If these contracts are large enough and the receivables due in say 90 days from execution, then I hope SKS is looking into arranging for a Credit Facility w/a reputable lender as a viable alternative to further dilution.
One more PP is probably inevitable. After thet if we've got "the goods" and can prove it, let's borrow. The anouncement of a Credit Facility w/ a reputable lender would significantly move the share price up. In fact, now that I think about, let's sign one ASAP -before the next PP. We don't actualy have to borrow the $, just have it available.