What are your thoughts and comments, if any, about the relationship Lumenon has established with Litton?
Words on a page.
To refresh your memory, here's their initial prospectus from December 1999:
sec.gov
The Company's prospective customers are expected to require high volumes of components manufactured to high quality standards at gradually decreasing prices. The Company will be required to expand beyond its present pilot production plant to a full scale manufacturing facility, with a production capability of 1,000 chips per day. The Company estimates the necessary funding for such expansion to be approximately US$20 million (CDN$29 million) and is actively investigating potential sources for such funding. The Company expects to produce chips at the rate of 20 per day in April 2000 and to increase its capacity to 500 chips per day in 2001 and to 1,000 per day in 2002.
Plan of Operations
Lumenon's plan of operations for calendar year 2000 is focused on finalizing its 8, 16 and 32 channel DWDM products and bringing them to market. This will include final product development, establishing a second plant that will be capable of producing, in stages, up to 1,000 units a day, increasing the work force to approximately 175 persons to fully staff this plant, and commencing marketing activities for its DWDM products. . . .
As I said: words on a page.
The company has never had revenues. The Molex agreement has come and gone; the CEO and CFO have done the same. Now they're spinning a new story --- new products, new management (combining CEO and CFO), new partnering agreement --- with no clearer path to revenues than before, and you expect the public to buy it.
Now, a little background on their new CEO, Gary Moskovitz:
1) From LUMM’s website:
Mr. Moskovitz, a very talented and seasoned corporate executive, has gained a wealth of experience from a uniquely deep and broad general and marketing management career in a global environment. He has consistently demonstrated excellence in managing numerous operating units, in both the public and private sectors, in many different stages of growth and that utilized a variety of technology bases and distribution channels.
Mr. Moskovitz was most recently President and Chief Executive Officer of Helisys, Inc., one of the technology pioneering companies in the Rapid Prototyping systems industry. Before joining Helisys, Gary was Executive Vice President and Chief Operating Officer for the Quintar Company- a leader in the electronic printing and networked image server industry. Gary was previously President and Chief Executive Officer of Personafile, Inc., a software and services company providing human resources solutions and President and Chief Executive Officer of Genesis Electronics, a voicemail/telecommunications systems OEM manufacturer.
Before Genesis Electronics, Gary was Executive Vice President and Chief Operating Officer of Westec Security and President of both the COM and the Business Data Products Divisions of Bell and Howell Company. Gary also headed Xerox’s Artificial Intelligence Systems Division as Vice President and General Manager and additionally, over the first segment of his career, held a variety of executive marketing and product management positions with Mattel Electronics and RCA Corporation.
Gary received a Bachelor of Science degree in Electrical Engineering from Carnegie Mellon University and a Master of Business Administration degree from the University of Pittsburgh.
Gary, his wife and family currently reside in southern California and will be relocating to the Montreal area in the near future.
2) Helisys’s history as outlined in SEC filings:
sec.gov
On October 31, 2000, Helisys, Inc., a Delaware corporation (the "Company"), laid off all of its employees and accepted resignations from each of its directors, with the exception of John Chan. Mr. Chan is the sole remaining director of the Company.
sec.gov
On February 15, 2000, Walter W. Cruttenden III ("Cruttenden"), repaid the obligations of Helisys, Inc., a Delaware corporation (the "Company"), under a Master Revolving Note between the Company and Comerica Bank - California (the "Bank Note") pursuant to a Guaranty dated November 14, 1997. On April 7, 2000, the Company entered into a Stock Issuance Agreement, effective as of February 15, 2000, between the Company and Cruttenden, whereby in consideration for Cruttenden paying off the balance due under the Bank Note, Cruttenden received the following: (i) 7,000,000 shares of the Company's common stock; (ii) the Company agreed to reprice the warrants to purchase 200,000 shares of the Company's common stock then held by Cruttenden from an exercise price of $1.75 per common share to $.05 per common share; (iii) the right to elect one director to the Company's Board of Directors; and (iv) an irrevocable proxy from Mike Feygin ("Feygin") with respect to shares of the Company's common stock owned by Feygin. In addition, the Company also executed a Secured Promissory Note in favor of Cruttenden in the amount of $236,634.22 and a Security Agreement for a first priority security interest in all of the assets of the Company. Cruttenden also agreed to execute a Subordination and Nondisturbance Agreement and approve the grant of 668,010 incentive stock options to employees of Helisys.
10-Q lists sales at $898K for the April ‘99Q and $5M for the previous 9 mos.
sec.gov
The Secondary Facility is collateralized by substantially all assets of the Company. Under the Facility the Company is subject to certain financial covenants. The major financial covenants include requirements for maintaining defined levels of tangible net worth and working capital, as well as various ratios, including the current ratio and the senior liabilities to tangible net worth ratio.
The Company did not comply with certain financial covenants at April 30, 1999, and accordingly, is subject to a forbearance agreement with its bank for periods up to and including July 15, 1999. . . .
Gross Profit. Cost of sales consists primarily of the costs of labor, raw materials and overhead used in the production of the Company's rapid prototyping systems. Gross profit for the three months ended April 30, 1999 was approximately $56,000, a decrease of approximately $488,000, or 90%, compared to gross profit of approximately $543,000 for the three months ended April 30,
1998. Gross profit as a percentage of net sales decreased to 6.2% for the three months ended April 30, 1999, compared to 26.2% for the three months ended April 30, 1998. The reduction in gross profit for the three months ended April 30, 1999, compared to the three months ended April 30, 1998, was the result of production inefficiencies caused by reduced LOM system demand, and unfavorable inventory adjustments to on-hand quantities resulting from cycle count procedures.
sec.gov
Notification of late filing, 10/29/99
The Annual Report on Form 10-KSB for the fiscal year ended July 31, 1999 could not be filed within the prescribed time period because of Registrant's current financial condition and its inability to obtain audited financial statements for the year ended July 31, 1999. The Registrant intends to file its Annual Report on Form 10KSB for the fiscal year ended July 31, 1999 as soon as possible.
Yahoo profile shows last financial report as April 1999, at which time it was trading at $0.02:
biz.yahoo.com
3) Positions prior to Helisys: I can’t find anything on Personafile but this mention in a 1997 article on VC activity:
sanfrancisco.bcentral.com
1993, White and Darrah left Personafile (which folded a few months later) and founded SkillSet. To get to market quickly, they developed an application based on Lotus Notes, the market leader in groupware, or multi-platform workflow technology.
I also can’t find anything on Genesis Electronics or Qintar. It appears they aren’t public companys.
Pat |
