Impressions of SURG ;
Visted the company last week, they are on the south side of Saraosta off 41. Office building is small, and there were maybe 5 people around when I came there. They were all very friendly and seemed to believe in their business plan. They were all dressed causual and relaxed...i was humored by this as the CEO was in shorts and a golf shirt, just as i was in shorts and a tee-shirt...my kind of guy.
I got a tour of how Oasis worked and then sat down with the ceo to talk the talk. By the way, they do read this board.
points;
1) Being from a health care background i found the Oasis system interesting and could see the attraction of it by hospitals and insurance carriers. It certainly has potential to be a useful quality assurance and training tool and probably more importantly, a very good tracking device of accidents and follow up to those accidents. This would offer the hospital some liability protection and allow them to take a proactive approach to dealing with incidents. If the loop is not closed in an incident, the system will alert the proper staff of this..with the demands of OSHA this is a very valuable tool.
2) current shares issued is 10,000,000. vast majority are restricited , it may be 60% but i do not recall the number, just remeber that the float is about what it was a year ago. Shares authorized is 20,000,000.
3) They will probably soon do a share issuence of around 2,000,000 to meet cash needs through mid to later year 2000. These shares will be have restricitions and will have to be heald for a period of time. The one thing that i kept hearing over & over again was the ceo commitment to restrictions on shares.
4) everyone working for the company has a stake in the company with share restricitions. I got no hint that anyone would want to sell their shares and they fully appreciate the impression it would give if they ever did sell under curent conditions. These folks are not selling and do not appear to worried about their stake in the company.
5) The CEO fully understands the calamity of the stockstowatch episode, this happen before he came on board. Understand, that this was a company that was managed by medicial people, not business people so what happen happen. But the CEO believes very srtongly about the founders integrity and mision. They were navie and they know that.It will not happen again.
6)The CEO is well connected in the medicial field and has worked in alot of different areas. He is familiar with startups and has a sense of what the business plan must be to be sucessful.
7)They believe they will do over $1,000,00 in sales in 99. I sense that this is a conservative estimate on their part but they want to avoid the hype. They are looking for profitability in last half of year 2000 and sales of 5 to 6 million by then.
8) They are placing the Oasis system in several hospitals now. They are looking to eventually do mass orders with companies like columbia.
9) Company has ties to us surgicial which was bought ot by Tyco. I think this relationship should not be underestimated as US SURGICAL has the ability to get their foot in the door.
10) CEO is an operations man, not a press release man, he has a business plan and a time table that he feels is relistic. He views SURG as a challange. I asked him frankly at his age why would he want to take on a company like SURG instead of just retire and kick back. He told me he was not much good at golf, wanted the challange, did not want to sit around and get bored and after all his years in the health appliance business he found the Oasis concept had a lot of potential and he wants to take it from its infant stage to maturity.
11)They have reduced the cost of producing their surgicial needle holder about 70% by just finding the proper manufacture. I found this telling because medicial people tend not to think that deep about such things.This CEO looked at the process, saw he could get the cost way down and was probably amussed at how easy it was to do after making a few phone calls...he knew who to call, doctors dont.
12)They will be reporting quartley, i stresed to them that they should release those numbers as soon as possible and not wait 45 days after the Q ends . People draw wrong conclusions and start to get to antisy. Its not a big company, they should beable to realease and audited staement quickly.
Okay, as i said i was comfortable with what I heard. Did it make me want to go out and buy more shares ...no, nor did i walk out wanting to find an exit point. CEO did tell me that he would have liked to have bought shares when the price was lower but is sensitive to the appearence of that because he will get calls from people asking him what he knows, etc..he would just perfer not to go there and egt people hyped up.
Will SURG make it. I dont know, look there are 10,000 bulliten board companies and most of them do notmake it for a number of reasons. Is the company worth $10,000,000 at liqidation ..probably as the technology and setup is pocket change to someone like J&J. I will sit on my shares, watch with some interest, understanding that one probably will not get a clear picture of their possible sucess untill the 2nd half of the year.
I know these folks believe in their product, have a vested interest in its success, and seem sensitive to the shareholders concerns. I walked out of there rooting for them and wishing them well. People, its a crap shoot for now and patience needs to be displayed. If i did not own shares, i wouldbuy a few just to watch.
there you go, call them anytime ou want.
Mark |
