Annual General Meeting Report-
Here is a report on the AGM from the only member of our investor group that could attend the AGM. I would like to thank Andre for his Herculean effort in preparing this report. It sound pretty good to me and I hope that Mr. Jacobs can fill in the holes either by issuing a press release as indicated or responding to this post if there are inaccuracies.
Pyng Annual Meeting
18 people were present. Of these 1 was the usual company AGM
lawyer and 5 were insiders.(2 directors, Dr. Johnson, Judy Findlay and
Michael Jacobs) The whole meeting lasted 2 hours. Mr. Jacobs talked for about 20 minutes detailing the year's accomplishments and the company's plans. Well over an hour was taken up with questions and answers and then there was a demonstration of FAST 1.
I went to the meeting with a list of 20 questions put together by Jack Rayfield from various members of a Pyng discussion group.(SI post # 3184) I also had my own questions as did several other shareholders. Obviously for one person to ask 20+ questions at any AGM is a bit much so when I felt I'd asked my fair share I proposed to Mr. Jacobs that he respond to the list in some manner on the internet and he agreed.
Cutting right to the chase....
Question: Has a production manager been hired?
Answer: They are interviewing.
Question: What is your production capacity for 1999, 2000, 2001?
Answer: As posed I don't know how this question can be answered in a meaningful way, but on the general subject of production I can saythat Pyng is persuing a two track policy. That is looking into
contracting out most or all of the manufacturing (and Mr.Jacobs had paid a deposit to a company called Innovative Tool and Design to that end) while simultaneously preparing for at least some in house production. 2 engineers have also just been hired. Dr. Johnson said that one of the production manager's mandates down the road might be to phase out their own job!
Question: Are you still seeking a TSE listing?
Answer: Forget it for now. The bar was recently raised very high. 12 million in cash and minimum share price of 4 dollars.
Question: Are you still contemplating sale of the CCP division?
Answer: I didn't ask this, but Mr. Jacobs did say that Pyng has 2 million plus in cash and saw no further to raise more. He also said that might change if a large order in the 50-100,000 range came in, but that they planned to go with debt possibly combined with some form ofadvanced payment in that case.
Question: Are you considering hiring an investor relations person?
Answer: Yes. Applications have been taken, but a firm decision to create such a position hasn't been made. I urge Pyng to do so or at
least provide us with very regular updates. Anything that contributes to shareholder knowledge is positive. Ignorance only breeds negativity.
Question: When does the company expect to launch full scale
marketing efforts, to commence volume production and to start processing commercial orders?
Answer: Mr. Jacobs said that Pyng had not solicited or encouraged orders.(Although 2 army units placed small orders anyway.) They have set themselves the goal of 150 uses and are at over 100 presently. The required amount of data from the field trials must be in and analysed before orders will be solicited. Mr. Jacobs said it would have been possible to be further down the production road, but that this would have resulted in recalls. The reason for this as explained by Judy Findlay is that approx. 12 different changes have been made to the FAST
1. These are all of a minor nature. ie. too much adhesive on the patch,not enough adhesive, problem with the line kinking, changing the angle of a tube and several packaging changes.(The version I saw came in a thick zip-loc bag, not in a metal case as pictured in Pyng literature.)Some of the changes came as a result of feedback from the current field trials. So you can see that setting a date for the start of large scale production is pointless because of the chance of other minor improvements having to be made. Mr. Jacobs said that there are plans for a marketing and PR campaign to coincide with the start of sales. He is looking into hiring a firm called Campbell and Associates to that end. I asked why not Raventures and guess what folks, it seems they have fallen from grace. The gist of the answer to the obvious question is non or underperformance. Which has me wondering, is Pyng just unlucky with PR firms or is this something endemic to the PR business? ie. promise alot, deliver a little. You'll recall that Frontline was dropped for the same reason.
Question: Has there been any contact with Laidlaw/AMR? If not why not as they are 4 times as large as Rural Metro?
Answer: Apparently not, but they are aware of them. Dr. Johnson
said that field trial sites were chosen on the basis of their
suitability as field trial sites. This was the only answer given at the meeting that I wasn't 100% satisfied with, but Dr. Johnson also pointed out the litigious nature of the U.S. medical scene and said that following the first successful lawsuit, outfits that hadn't expressed an interest soon would.
Question: Are there any derivative or complimentary devices or
components under development?
Answer: Yes, but Mr. Jacobs won't be talking about them until they are further along. I imagine that patents are a factor here, but you can see from items 3+5 in the annual report that Pyng is working on a medical valve.
Question: Has a decision been made on an internet certification
process for new commercial FAST 1 users? If it has been rejected has the hiring of a full time RN trainer been considered?
Answer: Rejected apparently. Pyng also won't be hiring any
additional training staff. What they are going to do is put together a
training package with printed materials and CD/DVD to be shipped with
each order.
Question: When will the new training CD/DVD be available?
Answer: As soon as possible.
Question: Do you expect the strict protocols which have delayed
the field testing from the projected 90-120 days to over 9 months as of today to ease over time?
Answer: According to Dr. Johnson not all the protocols have been
that strict. Some have, some haven't he said. His actual answer was long and complex and damnit I can't remember it all.
Question: Have any of the field site protocols been revised to
include a broader range of situations?
Answer: I didn't ask directly, but Dr. Johnson did mention that at some of the sites personnel had been given the green light to use FAST 1 whenever they fit and that some had told him it was their first choice.
Question: When will the results of the walter Reed military tests be released by Pyng? Were they in line with your expectations?
Answer: Soon. Mr. Jacobs said he'd been promised them in Nov. then Dec. and now is promised for Feb. Also he's been told that FAST 1 is their system of choice. Part 2 of the question can't be answered without the full report, but some things from the WR tests are known as Ilearned from an answer given by Dr. Johnson to another shareholders question. Personnel using the product had been given 1/2 hour training, then achieved a 74% avg. success rate. The second time around without any further training the same personnel achieved a 95% avg. success rate. I think it's a good sign as it implies a fast learning curve. Interestingly the 95% is the same avg. rate achieved in the civilian trials, though I'm wondering if we're not dealing with coincidence here, as one of the reasons given for the 5% civilian failure rate is extreme obesity and I can't see that being a factor in military trials. Dr. Johnson also spoke briefly about the competition in the WR tests, saying that the 2 needles(Cook and Jamshidi I think) aside from needing more time end skill to insert also required stabilization, further delaying transportation.
Question: Is an Army evaluation of the product underway/planned?
Answer: My impression is that the Walter Reed tests were the
Army's evaluation, but perhaps the questioner meant something more in
the way of extensive field trials. In any case Mr. Jacobs said that in
addition to Fort Bragg, demonstrations were planned for Forts benning
and Lewis.
The rest of the questions from the list that I didn't ask are
below. I think they are all good questions which deserve an answer and I invite Mr. Jacobs to come on this forum and have a go as well as
elaborate on any incomplete accounts of answers I have given or correct any errors. My use of the word "apparently" is indicitive of vague memory, not vague answers.
1. Are you planning longterm to sell the product through an
internal sales force or rely on outside distributors/resellers?
2. Is Pyng still talking to Johnson and Johnson?
3.Have you discussed international distribution with anyone other than Acute Care-Australia? If so who and for what countries?
4. Could you give us a status report on the Rural Metro testing,
specifically the number of active sites and projected timeframe for
making a decision on system wide rollout?
5. Is there any ongoing research on a pediatric version of FAST 1?
6. Do medical devices used in the military have to be FDA
approved? Will the Navy, Air Force and Marine medics be included in the training at Fort Bragg in February?
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I also asked about the price of FAST 1. It is $98.50 U.S.(firm),
but Pyng is open to reducing that in future for large orders. Dr.
Johnson said that yes some people had indicated they thought it was
pricey, while others said that they realized it was cheap compared to
the cost of a cutdown. In any case he said everyone would soon realize
it was very cheap compared to settling the cost of a successful lawsuit.
Mr. Jacobs acknowledged the teething problems with the website
video, saying they might not be over yet. The video that's on there now is over a year old and wasn't produced with the internet in mind. What's coming should be clearer.
I asked about the approval that will apparently need to be gained state by state. Dr. Johnson said that no they didn't initially realize that there would be so much red tape to cut, but didn't think it was a problem, just slow things down a bit.
Another interesting thing I learned was that 25% of the patients
in the civilian field trials have been concious.
After the questions a FAST 1 in its kit was passed around for
examination and Mr. Jacobs pretended to be an unconcious heart attack
victim while Judy Findlay demonstrated a fangless version of the
product. Then the real thing was used on a surface that consisted of a
quarter inch of gelatin simulating a flesh layer,backed by hard plastic which simulated bone. The needle came out the other side of this to what appeared the optimum depth. One thing I hadn't known is that the FAST 1 requires a remover. This(inside its package) is tucked into the patients pocket or clothing prior to transport. It consists of a metal shaft ending in a small knob. The shaft screws into the thread in the top of the hollow needle that's protuding from the sternum. Its function is to give "grip" when pulling out the needle which as you can imagine is firmly imbedded. The remover was also demonstrated.
Two things I forgot to mention: Mr. Jacobs said he wasn't entirely happy with VSE and since TSE is out of question for now will be travelling south soon to meet with American market makers. He mentioned New York, but in what context I'm not sure. He'll have to elaborate.
Also Pyng is moving as their lab facilities are wanted for prostate
research. Where and when I don't know.
I didn't cover the questions asked by other shareholders, although some of the info contained in the answers to their questions is in here.
None of the statements are exactly as made. The words are my own. It is impossible to do justice to typically long and complex answers and I'm sure there are inaccuracies and errors.
Finally I know that some are disappointed with the speed of Pyng's progress, but speaking only for myself, if as much progress is made between this AGM and the next AGM as was made between this one and the last, I'll take it.
Andre Bain
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