Confessions of a long who was forced to do some real research... I take my hat off to the guy for being able to put aside his own inherent bias and see the truth for what it is..
By: BillBranum $$
Reply To: 23222 by Printerman2 $$$ Tuesday, 6 Feb 2001 at 1:24 AM EST
Post # of 23296
Part 1
My Report
First let me say that many times 2 people can witness exactly same event and have different perceptions of what happened. The things I report as fact are fact. Everything else is just my perception.
The facilities of Seaview are adequate for the job, and are certainly not extravagant. I found it pleasing to know that company money was not being spent on a “showplace” for potential investors.
The open house began by having everyone sign in and receive a name badge. We were each given a 4 page handout to read while waiting for our tour to begin. Here are the quotes from that handout that I consider to be relevant:
“I have made many mistakes over the last two years. My eagerness and enthusiasm to build this company was to open. I never thought that we would get shorted and shorted by the big players, and yet we were.”
“I will tell you that I will not vote my shares at the next stockholders meeting. You can then voice your opinions with your vote.”
“There are areas during the Q&A I will not get into. You will get a no comment. Please don’t waste other stockholders valuable time by re-phrasing the questions.:
“NO or Limited COMMENT”
“4th Quarter Sales or Accounting (These areas will be handled via SEC filings)”
“My Personal Business (I won’t ask you who you bank with or how much you are worth)”
“Vendors and Production Numbers (These things are now classified because of competition)’
“Upcoming Contracts or Status (Only solid contracts or letters of commitment and they will be thru PR’s)”
“The majority of electronic engineering design is jobbed out to several engineering firms. Seaview has an R&D group that struggles with overall design and technical problems. This is a group I am very tough on. I don’t believe in long meetings and expect everyone to have solutions in hand prior to the meeting. The words “I can’t” and “No Way” are not in my vocabulary.”
“Seaview is not in the manufacturing business! We will not be building and shipping SecureViews. This is handled outside by contractors. However you will see that we are helping out with demand by building SecureViews. Close to 200 cameras will be assembled here in the next two weeks. This amounts to approximately $100,000 in gross revenue.”
“You have to remember, SecureView is not merely a product. It is a grouping of parts. Once you have all the pieces, you assemble the parts. This means you have many vendors constantly building the parts. So mass production has been going on.”
After reading the handout, we were taken to a presentation of DentaView by George Bernardich, Seaview COO. I was very impressed with George. He seemed to be very competent. He stated that he had shown DentaView at a tradeshow for dentists in Miami last week. The stated purpose of the trade show was to gauge reception for the product and to take orders. He said the product was received very well, and “a couple” of orders were placed. The system is priced at $699 in B&W and $1199 in color, including camera, monitor, and cart. He also made the statement that this was an extra-occlusar camera, meaning that it was designed for use outside the mouth. The picture quality was very good. When asked about the competition, he said that the other system(s) available were over $5,000, but were intra-occlusar and had options not available with DentaView, such as software that automatically loads the visual information into patients’ files. In my opinion, this system has no future. The images from the camera were very good, but could also be archived with any of-the-shelf $300 consumer camcorder. If and when Seaview adapts this camera to irtra-occlusar (which may or may not require FDA approval), then it could be viable.
Next Rich McBride gave us a presentation on SecureView. Without reservation, this is an AWESOME product. The SecureView camera works in total darkness, but only in a very limited range, about 4 –5 feet. The operative word here is TOTAL. With the least bit of light, the camera does an outstanding job! The demonstration that Rich used for our group was for someone to light a cigarette lighter…. and the whole room was light up like daylight for the SecureView Camera. He also demonstrated the effect using an IR floodlight would have, and the whole room was totally illuminated to the camera, yet in total darkness to us. MOST IMPRESSIVE!!! He also showed us 3 generations of the circuit boards being used inside the cameras. The first was from a year ago, and rather big and bulky. The last was the current version, and was about one inch in diameter. He also alluded to the capability of putting that size circuit board inside an everyday light bulb, which would expand the market for SecureView tremendously. He then left the camera running in the demonstration room and walked us through various parts of the building, plugging the monitor in AC receptacles as he went. SAME AWESOME PICTURE. We even asked him to turn on the microwave in one room to prove it, and he did (with help from the group), and there was NO degrading in the picture. In my opinion, this part of the technology is World Class.
At this point we were directed downstairs to the “production” area. Entering, you see a wall of tool boxes, filled with Seaview orders waiting to be shipped. To the right is MJ. R. Cox , demonstrating the multi-camera setup that was proposed to the parties that may be interested. The multi camera setup is great, but that technology does not belong to Seaview. It’s a package from a third party…..even requires a purchase of their hardware to make it work. Seaview brings cameras that work over existing wiring, that’s all.
Part 2 of 2: The bad news
Well, it’s not all bad news. Christie, as reported, was very capable, and definitely an asset to the company. I witnessed her handle a couple of touchy situations like a real pro.
Anyway, on with the report. Immediately upon entering the production/retail area, we saw a wall of Seaview kits, complete and ready for shipment. Open up any box on top, and there was a complete Seaview camera kit. The impression given was one of substantial inventory. Problem is, most of the boxes were EMPTY. Yep, I removed a few boxes on top, and found the ones underneath empty. Then I discovered I could tell if a box was empty or not by tapping on the side with my knuckles (the full boxes made a distinctly different sound than the empty ones). Turns out MOST were empty. At one point as I’m doing this, Mr. J R Cox sees what I doing and ask me how the “sound”. I reply that they sound like some are full and some are empty, and replied with something to the effect of “Yea, that would be about right.” I did find it disturbing that the “wall” of Seaviews was not what it seemed.
One good piece of news from the open house: the UL listing is not an issue, period. I saw a letter of approval from Intertek Testing Services NA Inc. It was report #22868A, issued 9-30-00, and revised 10-30-00. This report certified that SecureView was in compliance with UL standards. By UL procedures, the only thing left for you to able to see a UL sticker with a UL # is for mass production to begin, at which time a UL representative will take a piece off the production line for inspection. Upon verifying compliance, the UL stickers are then applied.
On questions of production, I got the distinct impression that the problem is money. Rich stated that he had a deal completed with a major brokerage company for funding, using his personal shares as security, but the deal fell through when the stock sank below $3 per share. He also stated that he receives 2-3 offers EVERY day to fund production, but the cost would be excessively dilutive. He stated his current plan is to fund mass production by internal revenues. He used the example of priming a pump (yep, he really did choose that example) by generating revenues from sales of hand assembled SecureViews.
The question was raised of what business Seaview has buying an interest in the Springs. Rich’s answer to this was to not answer the question, but to state that the 20% interest in the springs was a gift from him to the company. It was then pointed out that in fact the company did issue 150,000 for that 20% interest, contingent upon these shares being repaid by Rich within a set number of days. Rich stated that this has been done. The question was then asked how that was possible, since he had just shown us all his original share certificates. His reply was that there are things we don’t know, as we haven’t seen the Q4 reports yet, that he had acquired additional shares, and could, as CEO, give himself more shares anytime he wanted to!!!
A little background is necessary to understand the next series of questions. Originally, there were 100 shares of Seaview, a Florida corporation, all owned by Rich. There was also a public shell called Gopher, Inc, with no assets, and 1,000,000 shares outstanding. At the time of the reverse merger, Gopher issued 5,000,000 shares of its stock (and $250,000 cash) for the 100 shares outstanding in Seaview. In effect, Seaview became Gopher, which then changed it’s name to Seaview. So now Seaview has 6,000,000 shares outstanding (1,000,000 to the original owners of Gopher and 5,000,000 to Rich). However, the stock certificate Rich showed us representing his original ownership position is for only 3,830,000 shares. Rich was asked what happened to the other 1,170,000 shares. His replay was that it was a complicated transaction, involving things such as “Founders Shares” and such, but he could assure us there was not a block of 1 million+ shares missing. In other words, he didn’t answer the question. What happened to that other 1,170,000 shares?
More background. The day after the reverse merger, Rich issued himself 2,700,000 shares in the new Seaview for consulting services. We saw this certificate; it was certificate # 2131, dated 5-11-1999. But the certificate for the original 3,380,000 was certificate # 2448, dated 2-16-2000, a full nine months later. Rich explained this by stating that the original had been misplaced, and what we had seen was a re-issued certificate to replace the missing one.
According to SEC filings, there were 200,000 shares issued during the 2nd quarter, and 300,000 shares during the 3rd quarter, for one cent per share, for the exercise of warrants relating to the original Holders of Gopher, Inc. When asked why the existence of these warrants had never been previously disclosed, his answer was that disclosure would be in the forthcoming proxy. When asked if there were more warrants outstanding, his response was no, he had cancelled all outstanding warrants. A follow-up question then revealed that there were additional warrants exercised during the 4th quarter. I found it interesting that the exercise of warrants during the 4th quarter was not disclosed when we on that subject, but only in response to the specific question being asked.
I did not see a GSA number. We were told that the GSA # was listed under New Technology Management, and the number could be verified “electronically.” I did see the order from Tandy, it was from June of last year for 2 units at $399 each, and the order from J C Penny’s was for under $2,000.
Overall, I left quite disillusioned, and sold most of my shares on Monday. |
