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Microcap & Penny Stocks : TSIS: WHAT IS GOING ON? -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (2009)	5/12/1998 1:52:00 AM
From: Breeze1	Read Replies (1) \| Respond to of 6931

Lets review again and give input.... John S. Baker (652 ) From: John S. Baker Tuesday, Feb 10 1998 9:35AM ET Reply # of 2009 (Long message) Annual meeting notes. To make sense, this must be interpreted after reviewing the audited figures for the fiscal year ending 7-31-97 and the unaudited results for the quarter ending 10-31-97. If you don't already have this info, get it from the company. Meeting yesterday attended by perhaps 60-70 shareholders. This was the company's first real annual meeting and the first with audited results. My general impression (admittedly very subjective) is that Don Cameron (President) answered all questions in a frank, open and forthright manner, and showed some clear thought processes on the hard questions. Company is on the verge of becoming profitable, and he pointed out numerous times that a profitable company faces different challenges than a non-profitable one. First contentious issue was over ratification of auditors. Company recently changed its incorporation to Delaware, but used a Canadian auditing company and recommended retaining same Canadian auditors for the current year. Don Cameron explained his frustrations with the auditor's delays ... apparently the audit report slipped by several months from the original target ... and noted that it is very difficult for a small non-profitable publicly-held company to get auditors. The auditor might make $20,000 for the audit, but if sued by a disgruntled shareholder, their defense costs would be far higher than their fees. Shareholders present requested a counted-vote on the issue, which passed 14.7 to 3.5 (million). Don noted that there will be opportunities in the future to switch auditors, such as when applying for listing. There was a problem with people getting their annual reports and proxies. Company established date of annual meeting based on anticipated delivery of audit. When that slipped, it squeezed the notification time. Also, many shares held in street accounts require assistance of brokers to relay info, with additional delays. Question from the floor regarding expanding the Board. Board currently consists of Don Cameron, his brother Scott Cameron, and Robert Wilson, all three of whom were re-elected. Don explained that he used to have a larger Board, representing venture capitalists and others, but that over time, people resigned and lost interest. Noted that it is very difficult to get good Board members ... he doesn't want just a bunch of pretty names ... what he wants are people who can open doors ... and that Board Members generally like to get paid. Fear of litigation drives off many potential Board Members. He will expand the Board approximately concurrently with listing of the stock in the future. Number of shares outstanding? Net, about 23 million out, with some additional in the company's treasury, following buy back efforts. Don stated emphatically that NO stocks were available directly from the company, and that when asked the company would refer current shareholders to their market maker for best deal possible. Explained earlier buy back efforts ... goal was to grow the company with minimum dilution ... while attempting to maintain a steady ... and slowly growing ... price for the stock. Admits that they got hurt around the end of July and would not do it again, pointing out that once profitable, they probably would have less need to do it again. Apparently there are some very precise rules governing such stock buybacks ... especially the pricing and the number bought back (as a proportion of the trading volume), and the auditors reported that 7 or 8 of these buybacks were "not in compliance." His words were "not exactly (in compliance)". Any liability is in the form of fines, and he used the figure "$1,500" to suggest a range ... responding that the did not anticipate any lawsuits. I'll continue in another message ... time permitting

To: chaz who wrote (2009)	5/12/1998 2:00:00 AM
From: Breeze1	Respond to of 6931

here is the rest: To: +John S. Baker (652 ) From: +John S. Baker Tuesday, Feb 10 1998 10:05AM ET Reply # of 2010 Continuation of long message re annual meeting.... Don stated that their current monthly expenses are in the $85-90,000 range, noting that he could cut that some but was planning some staffing changes which would bring the "burn rate" right back up to that figure. Lots of big name clients, but only one is generating big dollars so far. AT&T is what took the company positive, and they would not be positive without AT&T. Discussion of "Kingswood" or "Kings Group"???? said they terminated the agreement in February of 96 ... Kingswood owns 340,000 shares which are "legended" (meaning I think that they cannot be sold????) ... company has sued Kingswood for $438,000, filed on a contingency basis (minimal upfront cost to the company) but he doesn't really expect ever to collect anything even if they win the suit. (This whole Kingswood thing pre-dates me, so I may have it somewhat garbled.) Noted that when we see large volume of shares traded, remember that it often is "double-counted" or even "triple-counted". Customer buys shares from market-maker, who goes short, but then buys shares from a seller. Each transaction is counted, hence doubling. If the MM buys the shares from another MM, then the count can triple. He estimates that the real number of shares transferred is about 40% of the total shown on any given day. Was asked about the loans shown in NOTE 6 of the financials (page 7). Responded that the $30,000 note has been paid off with minimal interest. The second note was planned as a 30-day note, which dragged on for two years. They did not actually pay 4% per month, as shown in the financials ... rather paid about 15% per annum over the two years. The third note has been repaid. Regarding warrants shown in NOTE 10 of the financials (page 10).... Warrants shown in Item i were issued to Kingswood, have now expired. Item ii (potential of 238,143 shares at 30 cents per share) were issued to an institution (he gave the name but I missed it) at the time that stock was at 19 cents. Item iii was a "private placement" which converted debt he had incurred on behalf of the company into warrants (potential of 407,401 shares at 40 cents per share). Item iv was a private placement when stock was at 19 cents (potential of 337,500 shares at 20 cents per share). Stated that no warrants have been exercised to date. Margins. For a small client (ie not AT&T), their gross margins are 80%. Subtract the G&A and a LOT flows directly to the bottom line. Don stated that they could double their revenues with only a 10% increase in expenses ... the implication being that getting added business form existing clients or adding additional clients would be very profitable. That's all the time I have for now ... maybe more later. (FWIW, I am long a modest position ... and will be looking for additional opportunities to buy.) JSB.

To: chaz who wrote (2009)	5/12/1998 2:29:00 AM
From: R. Gates	Respond to of 6931

I really like the tone this thread has taken over the past few days, and I think it's good that both Jim B. and Chaz can have their place here. Also, we've attracted some new voices to the thread who had only been lurkers before. That's a very good sign for the health of this thread! Those long on TSIS do sometimes need to balance that enthusiasm with healthy doses of deeper analysis of the facts. IMHO, TSIS has done a great job of telling all they can in their releases and trying to survive as a young company doing business with multi-billion dollar international companies. I like Jim B's cheerleading, and information. On the other hand, people such as Chaz bring a bit of balance to our discussion. If anything, he has forced me to do more DD, and I BELEIVE EVEN MORE IN TSIS based on what I've read and heard right from the company. Sure, more information about TSIS, and hard numbers with real named clients would be good, and I believe we'll see it this month. Maybe it will even be enough to satisfy folks like Chaz, but by that time, I'm willing to bet that TSIS's price has already risen to match the information. We who invest now are going to be rewarded with an extra premium for the apparent "risk" we assume by getting in before every piece of the picture is fully disclosed. Anyway, the bottom line is, AS LONG AS THE DISCUSSION STAYS ON TSIS, and DOESN'T GET PERSONAL, I think it's very healthy for this thread to have both sides of the equation. Keep it up everyone!