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Microcap & Penny Stocks : Delsecur or Grandeur (GDER-OTCBB) DEL-ID for Ecommerce -- Ignore unavailable to you. Want to Upgrade?

To: Thassico who wrote (58)	12/3/1998 1:20:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 384

Management is in Jan Juan Puerto Rico on invitation from the Securities Technologies International organization to make a presentation and discussion on the delSecur system. Afterwards they have meetings scheduled with several leading companies. There will probably be some sort of press release that will come out about it next week. It is not clear what will come out of the meetings - any substantive agreements would likely take several days to develop. The company plans to license production for specific markets and is not certain if that will be a master license to broad market segments or if they will do better by licensing it for narrower markets, such as specific security product applications. If they do master licenses, they will likely be with companies such as Hitachi, Alcatel, Lucent or IBM. Then the master licensors would sublicense for specific segments or even to their competitors and delSecur would get a pass-through royalty. This is commonly done - I was involved with a technology development and master licensing agreement with Fluke Manufacturing several years ago that was handled this way. Enabling patent and technology royalties usually range from 3% to 10% of the cost of the item at the quantity wholesale price level. We had negotiated 5% with Fluke for technology that enabled Fluke's popular "Scope Meter" products - a figure that was gotten to after I produced a survey of what was "usual and customary" for similar situations. delSecur has some exciting and challenging negotiations ahead of it. They have gotten the favorable evaluation from CRIM and an endorsement from Dr. James at Michigan State University (considered an authority in biometrics security matters). Also, the field trials are said to be going very well and have demonstrated reliable and repeatable results under rugged conditions. Now the company is very active due to industry inquiries and must strategize how best to structure their negotiations and agreements. It is a game of poker at this point - you want the deals but don't want to cut deals that limit the overall attractiveness to key market players. You also want to cascade discussions with competing companies to gain favorable leverage. Some intelligent thinking and a lot of hectic seat of the pants activity can be expected. The royalty rates are my conjecture at this point based on what I know about the strength of the company's product and position. IMO they will be able to negotiate from a position of strength and will attract a significant royalty rate - my guess would be between 5% and 7%. The higher rates are usually not possible unless you are an IBM who can leverage your legal department as well as your technology. One clarification from a previous post: delSecur will only be involved with selling a minor portion of the security database server products needed in networked systems. They will license the "cassette" packet but that will not be likely to become a significant portion of their overall revenue. Mostly they will help their partners to implement the communications on their servers, not a troublesome task.