I also have talked to Donna Coward and her partner Herbert Jackson, also having been referred by Kyle Lussier.
Renaissance manages small mutual funds including a very small telecommunicatins equipment fund, and it sells research to investment firms. Because of this, I wasn't sure that they wanted their numbers posted. However, since they have been, let me add my impression.
These are diligent, sensible professionals, albeit small. They have talked to engineers at Nortel about NUKO products, and contacts at Broadband Technology and Harmonic Lightwaves about the marketplace. They also can "broker" private placements. They are convinced that the market is poised (though they won't commit to a timeframe) They believe that if the cash problems persist, the technology can be sold -- others are looking for an entry into the arena. According to the Nortel engineers at Supercomm, problems with Nortel product delivery are behind them.
They (and I in brief phone conversations) are impressed with Bob K, and were unimpressed with Gorman.
It is important to note that their research is ongoing and under review. My understanding is that they believe that Nuko either is considering or will change their business model to license their technology in some instances rather than manufacture end solutions. Because of this change, they are revising their numbers, and will have a better idea after the q2 conference call. (as we all will) This is consistent with the notion that expenses will come down.
I have talked to other sources, and the recurring themes seem to indicate the following:
* burn rate is coming down dramatically
* income improvement is more likely than revenue improvement for q2
* q2 revenues will be between $1M and $8M, depending on revenue recognition.
* almost certainly, some revenue from q1 and a decent amount from q2 will be recognized in q3; therefore, q2 revenues will probably fall in the area Peter Smith predicts: 3.5 to 4.5
* q2 will understate actual progress, but
* q3 will be expected to overstate progress if, as expected, revenue recognition problems dissipate in q3 allowing revenues from q1 and q2 to be recognized, without offsetting deferrals
* q3 will be the "breakout," with reported revenues as high as $12.5m
* q2 will include a small amount of Cisco revenue; the opportunity is real
* Oracle opportunities are in 1998 and 1999
* no mention of Sony
* ADC Telecommunications represents a potential opportunity as large as Nortel (no idea of probability or timeframe)
These impressions do not include another source a talked to briefly, T.J. Singh, who said that NUKO has good technology and partners, and ultimately that wins out. But when pressed for numbers, he said "maybe $2M per quarter for the rest of the year. I had the impression that he feels "singed," and doesn't really follow NUKO anymore.
If you invest in a company in which you can possibly lose 100% of your investment, it's nice to have one that can return 1000%. |
