A New World for Small-cap Companies Things are starting to look better for small-caps. Money is beginning to flow again. Increasingly, there is more than just rhetoric on Wall Street concerning investing in smallcaps. But also, things have changed . The players are different. Deals are being constructed through private equity or hedge funds as often as the big IB firms. There is plenty of action but most of it is happening away from individual investors. That couldn't have been more evident than at our ValueRich Small-cap Financial Expo in Palm Beach this last March. There were 124 executive suites on the floor of the Palm Beach County Convention Center; as I made the rounds, I observed one intense conversation after another. One of our sponsors told me that he had so many quality leads it was going to be a challenge following up on them in a timely fashion. Another investment bank sponsor is developing five new clients as a result of our show. I spoke with a number of micro-cap CEOs who were flabbergasted at the amount of interest their companies were receiving. I even heard of one South Florida micro-cap president who waited too long to reserve an executive suite on the floor (we sold out) and decided to come to the show as a walk-in attendee. As he was leaving, he thanked one of my staff profusely for the Expo. He had made a three-million-dollar funding connection in a matter of hours. I have never felt happier than on the day after the Palm Beach Expo, because I knew that our event had helped so many companies. It was clear that my idea of an Expo fo rmat far and away outperforms the typical cloistered PowerPoint financial presentation
ValueRich President Joseph Visconti (left) and George W. Bush (John Morgan) agree, small-cap business is looking up at the ValueRich Expo in Palm Beach.
events. Starting and building ValueRich has been a very risky, intense and challenging process. But we are not letting up for one minute. Small-caps need the extra play in today's fractured market environment. They need to showcase their products and services to the financial community. That's why I was already prepared to announce at our Palm Beach event that we would bring the ValueRich Small-cap Financial Expo to the Javits Center in New York this September, 1,SOO miles closer to Wall Street. In New York, I expect results for the exhibiting companies to be even more dramatic. We have started a new facet oft he Expo called Bankers' Row, where investment banks specializing in small-caps will be conducting business. To help facilitate this, we are opening a new Investment Banking section on ValueRichonline.com, where companies can submit their business plans to the investment banks before each Expo. We also expect to draw a large number of financial professionals because of the close proximity to Wall Street. Early registration is bearing this out. ValueRich is helping small-cap public companies create bullish action. I hope to see you in New York. Don't wait too long to sign up.
Value Rich contributing editor Liza Grant Smith and editor David Willson make the rounds at the Expo.
Joseph C. Visconti President, ValueRich, Inc.
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Communique
VALUE RICH THI NK SMALL-CAP
Summer is the Time of Passion I think business is the finest of human end eavors. That might see m like an odd thing for a writer and art ist to say, but entrepreneurs are among the most passionately creative people I know. Their bus inesses inspire and engage many others with positive contributions- employees, partners, investors and, of course, their customers. Thei r contributions to society are immense. In this summer issue of ValueRich magazine, we offer the stories of visionary bu siness people who have expanded the realm of the possible with their devotion to achieving perfection. You w ill read of Wally Group's Luca Bassani, who began rethinking and building a whole new class of sailing yachts capable of racing speeds, but with family-safe deck designs. Now Wally is building power yachts, and they are like nothing ever seen before. I also think you will enjoy our story about Horacio Pagani, who created the Zonda F super car as a tribute to his friend and mentor, the great Fl champion Juan-Manuel Fang io. His dream was to build a car so superior that its drivers would feel the talent of Fangio flowing through their fingers. Ma ny agree that he succeeded. Journey with us on Sea Cloud, originally commissioned by E. F. Hutton in the 1930s as the world 's finest sail ing yacht and lovingly resurrected by a group of German businessmen to provide the ultimate cruising experience for exclusive groups of passengers. And please take the time to discover the nanotech, biotech and other small-cap company articles in our Company Connect section with unique products and patented processes. Passion is also an element of controversy- something that small-cap leaders are well aware of in these times. We offer some articles with this in mind. "What Small Business Should Know About Big Politics" is an interview with Pat Buchanan. Lately, he's been a controversial figure in the news but, when it comes to politics, he speaks from experience. I guarantee you will find his opin ions about the influence of party politics on government and government's influence on small business very thought-provoking. Also, "Market Economics and the Challenge fo r Small-cap Companies;' by 30-year securities industry veteran Roland Savage, explores the conspiratorial history of Wall Street's big players and the SEC's complicity from a small-cap perspective. Mr. Savage originally presented his article as a speech at the first ValueRich Smal l-cap Financial Expo in Palm Beach in March. The ValueRich business plan revolves around providing small-cap leaders and their support industry with the means to take market initiative rather than simply react to conditions. And yes, we are very creative and passionate about it. I encourage you to subscribe online and be a regularValueRich reader, contact us with your opinions and attend our exciting Expo-style events whenever possible. We offer more than just articles and financial presentations.
I
1
David A. Willson
lj Editor-in- chi ef dw ill so n@valu erichon lin e.com J.C. Spradley Art Director jcs@va lu erich online.co m New York Contributing Editor Thomas Werner Contributing Editors Rita Sa mols Liza Grant Smith Kayla Will so n Contributors Will Andrews Bill McGuffy Thomas J. Reynold s, Ph.D Lest er Rosenkra ntz Roland Savage Katherine Wald ron
Advertising & Convention Sales Gregg Lowenstein Vice-President of Sales gregg l@va luerich onli ne.co m Ashley Sosner Director of Co rpo rat e Development ashley@va luerichonline.com Dave Roeder Director of Busi ness Develop ment droeder@va luerich online.co m Kim J. Armstrong Adve rti sing Executive kja@va lueri cho nline.com
I•
i,
Brandyce H. Stephenson Business Development Coo rd inator brandy@valueri chonline.co m Dara Ryan Account Executive dryan@valuerichonl ine.co m Roxane E. West Director of Glo bal Affairs
1-2 14-244-6400,1-917-544-7009
il David A. Willson Editor, Va/ueRich magazine
!:
Joseph C. Visconti President & CEO joseph @vrexpo.net
Copyrig ht 2005 by ValueRich, Inc. All ri ghts reserved. Reproduction w ithout the permission of the publisher is prohibited. The publisher and editors are not responsible for unsolicit ed material. Return post age must accompany all manuscripts, photographs and drawings. Every effort has been made to assure that all information presented in thi s issue is accurat e, and neit her ValueRich magazine or any of it s st aff is responsible for omissions or information that has been misrepresented to the magazine. ValueRich Magazine Issue 5 Summer 2005 (15SN pending) is published quarterly by ValueRich, Inc., 1804 N. Dixie Highway, Suit e A, West Palm Beach, FL 33407. Periodi ca ls post age pending at We st Palm Beach, FL and ad ditional mailing offi ces. POSTMASTER: Send address changes to ValueRich, 1804 N. Dixie Highway, Suite A. West Palm Beach, FL 33407. 561-832-8878, Fax: 561 -841- 1524
www.vrexpo .net
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2005 VALUERICH MAGAZINE S
ENCHANTING IN THE TRANQUILITY OF ITS SEASIDE SETTING, THE HYATT REGENCY HUNTINGTON BEACH
stands sentry over Southern California's romantic Pacific coast. Beneath the gaze of a brilliant sun and the welcome of sea swept breezes, this is a place that both excites the senses and calms the soul. Every comfort is indulged ... richly appointed guestrooms with hypnotic vistas of tropical landscapes, lagoon pools and the endless horizon of the sea ... the soothing and tranquil Pacific Waters Spa , reminiscent of a romantic turn of the century Spanish estate ... culinary delights from eclectic surf fare to sophisticated California cuisine ... refined social and business gatherings amongst dramatic vaulted ceilings, elegant iron works and lush courtyards.
~\
H__......Y-A-T_J
- - R E G EN CY HUNTINGTON BEACH RESOR T
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SPA
DARE TO DREAM AT HYATT REGENCY HUNTINGTON BEACH RESORT & SPA.
21500 Pacific Coast Highway • Huntington Beach , CA 92648 • (714) 698-1234 www.huntingtonbeach.hyatt.com
o 2005 Hyatt Corp .
by Joseph Sidorowicz
l.Contents i.Want.l From the Harley-killer Hellcat bike, to the
12 ultimate organ1zer, . d on 't m1ss . t h'1s .1ssue's collection of unique stuff that will have you saying, "I want one:'
n.Motion Pagani Zonda - Drive As If Possessed By Will Andrews
18
Horacia Pagani created "Una Macchi.na con Anima;' (a car with a soul) as a tnb-
ute to the great five-time F1 champion JuanManuel Fangio- so anything less than perfection was unacceptable.
Wally Wonders
48 has been invo Ive d .1n nat1ona . I po I.1-
Luca Bassani invented a whole new class of sailboat. Then he turne d h'IS atten t '1on
to power yachts. The results defy description -
Interview with Pat Buchanan What Small Business Should Know About Big Politics Love him or hate him, Pat Buchanan
By Bill "Guppy" McGuffy
26
n.Politics
but we've got plenty of pictures.
tics for longer and in a wider variety of rolls than just about anyone. Read why Pat thinks small business should care about what's happening in D.C.
x.Peditions
n.Business
Sea Cloud Cruising - Heavenly Romance and Legend on the High Seas
Market Economics and the Challenge for Small-Cap Companies
By Kayla Willson
36
By Roland Savage
E F Hutton built the world's la rgest sail-
. .
.
.
ing yacht as a token of h1s love for h1s
wife. Today, the Sea Cloud offers the world 's most unique cruising experience.
Sensory Santa Fe Summer 40
The Inn of the Five Graces in Santa Fe, N. Mex. has created a delight for each of the
54
tice becomes legal. And, the arbiter of change is an oligopoly backed by a cooperative regulator. Is this healthy?
The Next 425 New Names in the S&P 500 By Jordan Kimmel
five senses.
60
pro.Motion
On Wall Street, what is expedient . an dwhat IS" pracbecomes practice
425 ofthecurrentS&P SOOcompanies were not there 25 years ago. Which
small-caps will make tomorrow's S&P?
MINI Ha Ha By David Willson
42
When BMW acquired Rover in 1994, 路 路cooper d... they kept the Mm1 IVISion an d
unloaded the rest. Now they're laughing all
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What Makes a Good Company Great? By Lester Rosenkrantz
62
Simply running a solid business operation is not enough to be heard
the way to the bank. But their success is due as
above the babble of 14,000 other public
much to the advertising as the car.
companies. www. valuerichonline .com
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Company>< Connect Once AMild-Mannered Financial Reporter, EDGAR Online is Now SuperEdgar! By Liza Grant Smith
72
EDGAR Online's I路Metrix software is leading a new global standard for financial reporting.
ASmall World After All By Liza Grant Smith
76
Lumera Corporation is taking the"good things come in small packages" concept to a new
level as an emerging leader in nanotechnology.
Frozen Assets
w.Street.Expo
By Liza Grant Smith
Expo Wows Attendees and Exhibitors
80
CryoPort's low cost, one-way, cryogenic shipper could revolutionize the way drugs are
delivered to market and clinical trials.
64
The ValueRich Small-cap Financial Expo in Palm Beach
Mastering the Art of Innovation
proved there 's a better way for
By Liza Grant Smith
small -cap companies to attract
84
Biophan Technologies is making implanted and interventional medical devices safe and
compatible with magnetic resonance imaging.
AngeiCiti Antes For Huge Online Gambling Pot By Katherine Waldron
88
attention and raise funds. Now Wall Street is about to see smallcap American in all its glory. Read about the multifaceted ValueRich approach for exciting the next small-cap bull market.
AngeiCiti is taking an internationally diversi-
fied approach to tapping into the growing multibillion-dollar online gambling phenomenon.
Informatics is Power By Liza Grant Smith
MarketPlace Where Money & Ideas Connect 07i If you missed the Palm Beach 1
Expo, all the exhibiting com-
92 Guardian Technologies' artificial intelligence
panies are listed here under their
software increases accuracy and reduces costs in the airline security and health care industries.
financial objectives of raising capi-
Interactive Games' Strategy Is No Gamble By Liza Grant Smith
94
tal, mergers and acquisitions, partnerships, new business development and finding market exposure.
The well-established slot machine developer is adding lucrative licensing deals and expand-
ing into mobile device gaming applications.
i.Deas Charting a Course to Ethical Decisions By Thomas J. Reynolds, Ph.D.
96
MBA students at Notre Dame University are enthusiastic about ethics, and they got that
way by teaching it to elementary school children. 10 VAlUERICH MAGAZINE
2005
www. valuericho nline .com
Fonseca "The Original" Our first and most classic cigar! We have been making this cigar since 199 2 with twice aged Connecticut Shade wrapper grown in Connecticut USA. This wrapper is chosen for its beautiful, golden brown color and mild, rich smoke. We then add an aged, Mexican Sumatra binder for a little spice and smokey flavor. A lso available in Maduro!
Fonseca Serie F
Fonseca Vintae-e All tobacco in this cigar is
aged a minimum of 5 years! We start with a beautiful Ecttador, Connecticut Seed, Shade Grown wrapper. The Tercio Aged Dominican filler and binder provide a rich , creamy flavor that give the cigar presence without being overpowering. A medium bodied smoke supported by a floral aroma of natural tobacco .
The "F is or fuene .. Spanish for full flavor. This blend starts with a well aged dark brown, oily Connecticut wrapper to attract the cigar connoisseur. The filler is Tercio Aged Ligero Cuban Seed. The smoke is robust ye t smooth and very, very tasty. This blend is designed to be savored slowly when you're in the mood for a full bodied, strong cigar.
Six different cigars. Six different flavors. Six different personalities. One proud name.
Vee-as de Fonseca This cigar is bold and daring! We use a Cameroon wrapper for irs unique taste and pair it with a sweet tasting Connecticut Broadleaf binder. The filler is bold with Nicaraguan Ligero and Dominican Tercio Aged tobaccos. This cigar startS off mellow and builds in flavor as the Nicaraguan Ligero hears up. The smoke is a medium bodied , rich flavor.
Fonseca Sun Grown Cedar As the name implies, this cigar has a Sun Grown wrapper that is matched with a Dominican Olor binder. In the filler we really go wild by combining Nicaraguan Ligero for strength, Peruvian tobacco for its floral character and Dominican Cuban Seed to round out the blend. The result is a medium to full bodied cigar with loads of flavor and taste!
Limiud Edition Fonseca Reserva Especial 2003 This full bodied cigar is wrapped in the finest Havana Criollo Honduran leaf and filled with 1996 Dominican and Nicaraguan Ligero. It comes packaged in an exquisite, mahogany chest, brass plate numbered with the box personally signed by Master Blender Manuel Quesada. Get yours before they are gone!
!Fonseca ~ami[y
There's l for you.
of Cigars
Distributed by SAG Imports, Inc., Miami, FL. â&#x20AC;˘ For the Tobacconist nearest you call 1-800-272-5396 â&#x20AC;˘ www.MATASA.com
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Sit AIBO,
House AIBO, Sony's K-9 robot has been around for a while, but recently received an upgrade, making it more playful, more lifelike and a potential guard dog. The old AIBO has learned new tricks, and is more playful than before. Its new software improves the robot pooch's reaction time for better response to voice commands, as well as better face tracking and faster, smoother movements so that it can anticipate obstacles at a greater distance or in a darker environment. A lBO will also play back your favorite WAV, MP3 and WMA digital music files or CDs from its speakers while it dances to the beat. AIBO owners can now control, program and navigate the
Sit!
robot rover from a PC using AIBO Entertainment Player (AEP) wireless functions. And A lBO will even remind you of your appointments with Microsoft Outlook compatible AIBO Scheduler. Digital camera functions also get a boost with the addition of video recording capabilities. The combination of AEP and AIBO MIND 2 (a software application on 32MB Memory Stick media) offers continuous, time lapsed, motion activated and sound activated modes of recording. In addition, AIBO can send e-mail with an attached photo, effectively making it a roving security camera, recording activities in the home while its owners are away. AIBO now comes in pearl black as well as its original pearl white and includes AEP and AIBO MIND 2 software for $1 ,900.
www.aibo.com
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Pagani Zonda F
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Horacio Pagani has declared that his Zonda supercar has finally reached perfection with its latest iteration, the Zonda F. The remarkable speed of the new Pagani Zonda F is achieved through the combination of a 7.3-liter, AMG-sourced V12 engine that generates 650 HP and 560 lb.-ft. of torque pushing a car that weighs a mere 2,706 pounds. The Zonda F is definitely one of the world's fastest cars. But speed is not what sets the Zonda apart from the other select few supercars of the world. Once you've dispensed with the prerequisite data, everything else about the Pagani Zonda is pure art and passion. Ferrari Enzo fans might be able to claim an equal passion factor. Otherwise, one is hard-pressed to find anything else that compares. The Pagani Zonda is called by its maker "Una Macchina con Anima," (a car with a soul.) Horacio Pagani created the Zonda as a tribute to five-time F1 champion and fellow Argentinean, Juan-Manuel Fangio (19111995).
Known by many simply as "Maestro," Fangio is considered the greatest F1 driver of all time. From 1950 to 1958, Fangio's sheer talent dominated F1 racing regardless ofthe technical qualities of his rides. Stories abound of how he overcame insurmountable physical and mechanical difficulties to win races and championships. In 1954 he made a midseason switch from Maserati to Mercedes, which enabled him to win his second world title. Fangio went on to win the world title again for three years straight- capturing 20 VALUERICH MAGAZINE
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every pole position and winning six of eight championship races. Though Fangio drove for many other teams, he will be forever associated with driving the famous "Silver Arrow" cars of Mercedes manager Alfred Neubauer. Pagani got the idea for building the Zonda as a tribute to Fangio after he joined a group of close friends for dinner at the great driver's home in 1988. His motivations were pure respect and adulation. As Pagani puts it: "I remember well his incredible presence, his feelings and the concepts he used to express.
He is still an example to us all:' When he later showed working drawings of the car to Fangio, he received the great man's approval, with the encouraging words, "Any project starts to be interesting as soon as it becomes reality:' Fangio also told him: "I am thankful to all of those that allowed me to race and to win. My biggest thanks go to Mercedes-Benz.! am a Mercedes man. If you will make it, the car must have their engine:' Pagani originally wanted to name the car after Fangio, but after Fangio's death, he
Beginning with the soft leather flat-bottomed steering wheel, Zonda interiors are unique. www.valuerichonline.co m
The Pagani Zonda was created as a tribute to five-time Fl champion Juan-Manuel Fangio.
changed the name to Zonda- a wind that blows in the Andes- out of respect. Pagani was under contract to Lamborghini when he made his first sketches of the car. But in 1991, he founded his own company, Modena Design, to meet a growing demand for specialized design services, engineering, model construction, and prototypes using composite materials. The small yet very technically advanced company has clients in the commercial, sports and competition sector with great companies like Dallara, Ferrari,
Aprilia, Berman, Lange and Renault. The Pagani Zonda team's passion and rigorous work ethics are reminiscent of Renaissance artists- only working with futuristic technology. Fangio's favorite team, the factory-sponsored Mercedes-Benz team, retired from international competition in 1955 after a tire failure caused one of their cars to launch into the crowd, killing 80 spectators. But the Silver Arrows were reprised in 1989 by Peter Sauber's Swiss racing team. The Sauber-
The Zonda's elegant dash and instrumentation are a work of art. www. vrexpo .net
Mercedes C9, with a Mercedes engine and the company's full sponsorship, won the World Sportscar Championship in its f irst season of racing. Pagani has very obviously referenced the Sauber Silver Arrow in his design of the Zonda . It is the closest thing to an F1 racer in a Grand Tourismo car today. The Pagani Zonda has gone through rapid development, from the C12 through the more powerful S7.3 and its subsequent Roadster version, and finally the Zonda F. Ferrari and Porsche would be loathe to admit it, but since the Zonda C12 was introduced in 1999, the lead position for making the world's fastest, most technologically advanced and sexiest supercar has changed hands faster than a heart-stopping F1 photo finish. The development of the Enzo and the Porsche Carrera GT was spurred by the introduction of Pagani 's C12, and now the Zonda F with the AMG 650 HP V12 clubsport package has been judged by many to have taken the lead again in sheer performance, technology and the driving experience. U.S. adaptations ofthe Pagani S 7.3 and its roadster version are in the works for a price that's slightly over $500,000 at the current exchange rate. There is no word as to whether an American Zonda F will ever be available. However, Pagani has plans to introduce an entirely new car in 2007 that will be built in a new factory. Approximately 70 of these 2005 VALUERICH MAGAZINE 21
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Horacio Pagani presented this prototype Pagani Zonda Fat the Geneva Auto Show, March 1, 2005.
should be a'llailab\e worldwide per year. Unfortunately, this later car will have to comply with the new European regulations concerning pedestrian impact front end and bumper specifications, meaning that the beautiful sloping needle-nosed design of today's Pagan is will more than likely be lost -the property of only a very few fortunate owners. Most fortunate will be the owners of the Zonda F. Every new Pagani Zonda F is custom-built by just five craftsmen, out of carbon fiber, aluminum alloys, titanium, avional, chrome-molybdenum alloy and selected leathers. The level of detail and precision at Pagani is virtually unique. It's with the driver's experience that the Pagani team's attention to detail really begins to pay off. The driving position is low but upright, placed well forward and covered in a unique canopy windscreen -evoking the feeling of being in a fighter jet. The interior is sumptuous in soft leather, even on the flat-bottomed steering wheel. Through the evolution of the various versions, Pagani has fine-tuned the gearshift into a precision instrument. The monstrously powerful AMG-sourced V12 in the Zonda F is 24 VALUERICH MAGAZINE
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Zonda's trademark four exhaust terminals.
a super-light modern marvel that is so finely wrought that it looks like a piece of high-tech sculpture. Also new with the F is a cutting-edge carbon-ceramic braking system . But the car's braking performance is as much a function of shock-absorber geometry, the low center of gravity and reduced weight, keeping the
car as flat and close to the ground as possible to counter any pitching effect. With its race-bred design, the Zonda F slices through the air with hardly any effort, yet very strong ground effects and the perfectly strung suspension ensure a transfer of all the car's power and torque to its tires, regardless of whether it is accelerating, braking or cornering. It is this fine-tuned integration of power, balance and practical physics that is most striking for the driver. Everyone who has driven a Pagani Zonda says essentially the same thing: The steering is fingertip light, the throttle response is immediate. The car handles like a living being; it is so responsive that it seems to anticipate your every move and improve on your best intentions. Perhaps Horacio Pagani is a modern-day alchemist. It is almost as if he has managed to infuse his"Una Macchina con Anima" with the spirit of Juan-Manuel Fangio, so that the owners of these marvelous cars will be able to drive outside themselves and experience a taste of greatness. V R Information: www.paganiautomobili.it www. va I uerichonl ine .com
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They say the sea is cold, but the sea contains the hottest blood of all, and the wildest, the most urgent. -
D. H. Lawrence
Hooked up and running, with flush surfaces and a seamless angular glass superstructure, the 118 WallyPower resembles a stealth aircraft more than a yacht. Its computer designed and simulator tank-tested hull knifes through ocean swells as triple gas turbine powered waterjets smoothly push it to speeds approaching 60 knots. At anchor or dock, this sci-fi watercraft goes through a total change in personality. It transforms itself into a series of teak terraces, airy pavilions and studio loft-like lounges from bow to stern- a postmodern paradise. Oddly, this spaceship of a power yacht was born from a line of sailboats, under the leadership of Wally Group's Luca Bassani . Bassani was an avid sailing yacht racer who also loved to sail with his family. In the 1980s, there were no comfortable, fast, and safe sailing yachts of large dimensions suitable for high-level races as well as everyday use. There were just the complex and dangerous Ma xi lOR boats, with large winches on deck and ropes like whipping snakes. Bassani wanted to be able to sail a family-friendly craft with little crew, where he could safely have his children on board , without sacrificing his pleasure in speed . So he started developing unique designs to meet his needs. Bassani launched the first new boat incorporating his ideas, the Wallygator, in 1991 . 1t utilized advanced composite materials, new innovations for easily handling and flush decks for safety. Very enthusiastic reactions and encouragement prompted Bassani to found the company Wally in 1993 to build more boats. Wally rapidly began producing a number of hull configurations with more innovations for easy handling like hydraulic sail trimming, computerized control systems and the Wally anchor system , as well as a series of 80-foot sloops that could be sailed by one person. Bassani believes that sailing yacht design veered off in a wrong direction during the latter half of the 20th century. To him, volwww.vrexpo .net
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45 Wallytender combines speed, utility and sophisticated style.
aggressive hull, clean lines, navigation pod ume ratios seemed totally illogical. Racing occupied by its large mechanism.The saloon amidships, minimalist open interiors and terwas moved aft. This facilitated the idea for yachts had a tendency toward more freeraced stern caught the eye of an avid motor what Wally calls the "Terrace on the Sea;' an board volume and wider sterns than cruise yachtsman who approached Bassani with the open stern which steps down to water level yachts, not for comfort but mainly to comply idea of a motor yacht based on Tiketitan . in teak terraces from a saloon entrance at with arcane racing regulations. On the other As critical as Bassani was of past sailing hand, cruising yachts tended to concentrate the rear of the boat. Consequently, Tiketitan designs, he was even less enamored of powmost of their volume in the bilge rather than looked unlike any other sa iling craft. Its sleek erboats, thinking them ugly, inel as comfortable live-aboard space . egant, unstable and prone to rolling Using the strength of advanced at sea . In other words, just the kind composite materials, Wally designs of challenge he was ready to take cruising yachts built along the lines on . Wally designers began work on of racing yachts. power yacht designs with their typiAs Wally grew, Bassani employed cal "take nothing for granted " menone of the largest staffs of structural tality, using expert knowledge of engineering specialists in the yachtthe sea derived from sailing experiing industry and spent more than ence and working through the R& most companies in applied R&DD, computer modeling and testing, all in a quest to constantly improve firmly focused on their familiar goals the quality of sailing. It was in 1999 that events preof beauty, speed, safety and ease of cipitated Bassani taking his highly use. evolved engineering and manu Several different concepts emerged from their research . The facturing operation into the realm 1 18-foot WallyPower, and the 45-foot of motor yachts. The new 88-foot WallyTender were the first to be built. sloop Tiketitan introduced Wally's First launched in September 2001, most radical ideas yet . Tiketitan 's revolutionary hydraulic canting keel the 45 WallyTender was an immedirequired that the huff space usually ate hit . Though initially appearing devoted to a saloon amidships be Wally's 88-foot sloopTiketit an revolutionized deck design. to be traditional in design, on closer 28 VALUERI CH MAGAZI NE
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inspection, the WallyTender leaves similar craft in its wake. Incorporating many themes from the sailing side of Wally, the 45 WallyTender is constructed of advanced composites to keep noise and vibration levels at a minimum. The hull is designed and tested fo r balance between load carrying, stability, handling and ride. The vertical bow provides a finer ent ry angle with le ss pitching . The hull quickly spreads back in a wide flare for a dry ride at lower speeds, and a pronounced fender keeps it dry at the WallyTender 's top speed of 50 knots (40 knots with diesel power plants). The hull shape also allows for a Tiketitaninspired open stern offering great sunbath ing while providing easy access to the water and for boarding . The aft cushions conceal the engine locker and are hydraulically lifted for easy access to the engines and systems. The WallyTender's navigation controls are designed for single-handed operation. Its console is placed in the center of the boat to simplify maneuvering and to enhance safe-
classy, and yet sporty, tender that satisfies the most sophisticated sense of style and maritime beauty.
Wallytender console with fridge and seats.
ty. A built-in refrigerator, large enough for drinks and daily supplies is located between the two guest seats. The forward area of the central console hosts a head with shower and sink down below. In an overnight version, the below-deck space extends forward to provide a cabin with double bunks. With distinctive lines, beautifully finished composite construction and hand-laid teak decks, the 480,000 Euro WallyTender is a
The 118 WallyPower, however, ta kes Bassani 's power boating ideas to a strato sph eric level. Once launched in 200 3, it quickly captured the imagination of the entire design community. It was selected by the San Francisco Museum to be featured in a major architecture and design exhibition, and received the 2004 Millennium Yacht Design Award first prize, followed in second place by its sister sailing yacht Wally B. The 118 Wallypower super yacht is an engineering marvel. The shape of the bow provides a 50 percent reduction of vertical acceleration as it knifes through seas. The efficiency and sleek lines of the hull are the result of extensive R&D that included tank testing at the SSPA facility in Goteborg, Sweden, and smoke testing in the Fer rari Wind Tunnel Facility in Maranello, Italy. Its multi-level composite structure saves weight and provides rigidity without transmitting shockwaves. The bottom of the hull
With its beautiful fit and finish, the 45 Wallytender is equally at home at the loading dock, over a diving reef or pulling up to a black-tie affair. www. vrexpo .net
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At rest, the 118 WallyPower's deck and superstructure transforms into a series of terraced lounges, dining area and conversation pits.
is built of solid fiberglass. Hybrid fiberglass/ carbon composite with balsa core is used above the waterline and Nomex/full carbon composite is used for t he deck. The stealthlike superstructure is made of laminated glass with internal carbon frames that are not visible from the exterior. Interior bulkheads and cabin walls carry no structural loads and are constructed entirely of thin wood and laminate veneer skins. The 118 WallyPower is powered by a combined diesel or gas (CODOG) propulsion system com mon on small warships but rare on yachts. Three gas turbines generating 16,800 HP drive KaMeWa water jets, capable of powering the boat to speeds just under 60 knots. The two outboard units are steerable and the centerline unit is stationary. At maneuvering speeds, the steerable water jets are powered by two 370 HP diesel engines. At anchor, decks retract and bulwarks drop to transform the yacht into a series of breezy elegant social areas. Beginning at the bow and moving toward the stern, the
terraced deck offers easy access to a tender garage, the bow social cockpit, the glass superstructure, and the aft cockpit. Large open areas are designed for six passengers and a six-member crew to move comfortably and safely around the deck when at anchor. Sections of the bulwarks alongside the superstructure drop down hydraulically to increase the view from the
saloon, and when opened, serve as diving platforms. Cleats, mooring winches, radar antenna, TV dome and the anchor system are neatly concealed without sacrificing functionality. The deck, cockpit, navigation, dining and saloon areas have been conceived as one continuous element. The modern loft style interior is divided into three areas, the saloon, the dining/ seating area, and the navigation cockpit. When dining, guests enjoy a 360-degree view through the transparent superstructure. Underneath the table, a long central skylight allows light into the lower corridor. The saloon features teak planes covered in cushions to serve as sofas. Integrated spaces contain additional seating, tables, storage and technology. At approximately $25 million, there are only a very few who would be in the market for a 118 WallyPower. However, Wally is currently in production on smaller craft that combine the sensibilities of the 118 WallyPower and the Wally Tender.
A skylight under the dinner table illuminates the cabins below. 32 VAlUERICH MAGAZINE
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118 WallyPower interiors are contemporary, functional and glow with natural overhead lighting.
The 67 WallyPower has the open-air living characteristics of the WallyTender, with the hull lines of the 118 WallyPower sharing its same characteristics of speed, comfort, style, and seaworthiness with three continuous social areas on deck. Under the glass superstructure, which has sunscreen filters to reduce heat and glare,
the saloon acts as an inside-outside living area. The well-protected and sheltered forward cockpit offers privacy at anchor and at dock and comfortably seats 10 with a table. Protected by a high bulwark, this area can be enjoyed by guests and children with complete piece of mind. The aft cockpit provides another stylish seating and dining area.
Other convenient features include a wraparound fender, a wide boarding/ swimming ladder concealed in the transom and a t ender garage for storage and Jet Skis. Two 3,000 HP MTU diesel engines drive KaMeWa water-jets which power the 67 WallyPower to a max speed of 45 knots. The 67 WallyPower is also available in a sporty "Open" version developed for short cruises and daily use. The Open version's glass superstructure can be opened on the sides and top for airy seating and dining areas. An aft cockpit replaces the tender garage with a vast flush deck that can be arranged in different loft-like social pods. Both versions of the 67 WallyPower offer three accommodation configurations below deck; a "suite" layout with a larger owner's
188 WallyPower's unique forward deck design, with hydraulic sunscreen (inset), makes the bow the focus for informal gathering, day and night. www. vrexpo .net
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67 WALLYPOWER
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suite, a "lunch boat" configuration with a forward owner's stateroom and a larger galley amidships; and a three cabin layout. For those who like the 45 WallyTender but would rather have a cruiser. Wally has created the 47 WallyPower, a two - cabin cruiser developed on the hull lines of the WallyTender, featuring a large yet sheltered deck area with the navigation console and the cockpit seating eight people. The forward area features a sun pad . Optionally, the cockpit can be outfitted with a rigid awning. The aft area offers comfortable seating and dining for up to 10 individuals. Down below, the 47 WallyPower provides accommodation for three guests in two sepawww.vrexpo .net
rate cabins. The service area includes the head, shower and a galley. Two 880 HP gasoline engines drive KaMeWa water jets. With a fuel storage capacity of 528 U.S. gallons, the 47 WallyPower has a range of 500 miles. The 47 WallyPower is currently expected to have a 770,000 Euro pricetag and the 67 WallyPower, 3,000,000 Euros. The know-how and sty le in yacht design that Wally had developed over the years are key to the success of the company. In 2004, Wally established a new division named WallyDesign to offer these skills for the development of new sailing yachts over 164 feet and motor yachts over 135 feet. These mega-yachts will be based on the same concepts that have made Wally products a reference point in the industry: comfort, design, style, technology, safety, and enjoyment of
the onboard living. WallyDesign acts as the design authority assisting the client throughout the development and construction of the yacht. At the same time, Wally can be the supervisor and owner representative. Any construction type is contemplated to suit the project characteristics. Wally 's service includes the design and styling, while the construction is contracted to a yard selected by the client that specializes in the yacht size and the chosen building technology. Interestingly, some of the concepts developed by Wa llyPower for motor yachts, such as a central deckhouse skylight, are begin ning to find their way back into WallyYacht's sailing yacht designs as a skylight that extends from the companionway forward to the mast foot. There seems to be no end to w hat Wally will come up with next, making them a company to watch as technology offers new opportunities to revise our relationship with the sea.V R SUM
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Whether sailing on the majestic Sea Cloud, queen of the seas, or her modern sister, Sea Cloud II, you will luxuriate in their unique legacy of elegance and romance. By Kayla Willson In summer, you may find the Sea Cloud gliding over the waters of the Aegean Sea in the Western Mediterranean, Costa Brava or the Cote d'Azur. Or you might see the billowing sails of Sea Cloud II glistening off of the verdant slopes and white cliffs of the Balearic or Canary Islands. But before I tell you about the ultimate in personalized cruising on these sp lendid ships, let's go back to the illustrious past of the Sea Cloud and get some j uicy bits of history.
Hutton and his wife spent at least nine months of the year sailing for exotic destinations such as the Galapagos Islands, Hawaii, and the Mediterranean . Unfortunately, this seemingly blissful romance on the seas was short-lived, ending in a broken marriage by 1935. Still, Hutton knew that Post loved t he ship more than anything, so after the divorce he signed it over to her. Post immediately took comfort in an old friend, Joseph E. Davies, a successful attorney who had been an economic adviser to President Wilson during the peace negot iations in Versailles after World War I. Post and Davies were married within the year. In 1937, Davies took over the office of American Ambassador in Moscow and the Sea Cloud went to Leningrad as a floating diplomatic palace. It was not uncommon for guests aboard to include royalty, including Queen Elisabeth of Belgium.
Romantic Beginnings The Sea Cloud was launched in Kiel, Germany, in 1931 . The ship was commissioned by Sir Edward Francis (E. F.) Hutton, one of Wall Street's wealth iest businessmen, as a gift for his wife, Lady Marjorie Merriweather Post, who was, herself, the heiress to a huge fortune and a successful businesswoman. As the largest sailing yacht ever built, the fourmasted barque was the epitome of yachting luxury and privilege for anyone fortunate enough to experience it. Marjorie Post personally designed the furnishings of the ship using Carrara marble, preciou s woods, solid brass, golden bath fi xtures and exquisite antiques. Sea Cloud 's 32,000 square feet of white sails created a dreamlike vessel on the seas, with no comparison . www. vrexpo .net
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But World War II was on the horizon and,
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as the number of warships in eastern waters ~ rapidly grew and danger increased, the Sea ~ Cloud left the U.S.S.R. and sailed to Istanbul. ~ " Post tried to sell the ship before the U.S. 8 ~ went to war, but the market for luxury goods .§ had collapsed. The military needed private :;;: yachts to strengthen its fleets, and the Sea Sea Cloud's expert crew climbs the rigging. Cloud was heroically sacrificed to the Coast Q)
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Sea Cloud II
The staterooms of Sea Cloud II blend classic opulence with modern comfort.
Guard. Sadly, the masts were removed, the ship was painted gray, and she was outfitted with guns and anti-submarine weapons. The Sea Cloud was one of the few yachts to su rvive the war and continued to have a colorful history, including being sold to the brutal head of the Dominican Republic, Rafael Leonidas Trujillo Montinas, in 1955, who renamed it Angelita. Unfortunately for Montinas, he was assassinated on May 30, 1961 . His last cruise carried his body home.
was equipped with the most advanced navigational system, which was very important when the 29,687 square feet of sails were deployed. The newer ship matches its pre-
decessor in sophistication and charm while it adds modern amenities. The beauty and comfort of Sea Cloud Ill eaves no doubt that the original vision has been realized.
Resurrected Glory
In 1978, the ship was acquired by a group of Hamburg shipowners and business executives, whose dream was to restore her to her original splendor and share her with others. The original owners' staterooms and dining facilities were restored, and additional cabins and state-of-the-a rt navigation, communications and safety systems were installed. The Sea Cloud was brought back to what it once was -a splendor on the seas. In February 2001, Sea Cloud gained a modern sister ship- the Sea Cloud II. The vision for Sea Cloud II was to build a sail ing vessel for the 21st century that would capture the romance and luxury of the original Sea Cloud and combine it with present-day comfort. It 38 VALU ERICH MAGAZI NE
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Guests can experience the elegance of Lady Marjorie's cabin, finished in gold and marble.
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The Ultimate Maritime Experience Marjorie Merriweather Post spared no expense for her resplendent home away from home. The decor and furnishings of Sea Cloud exemplified her desire for a palace at sea. The 64-passenger, five-star sailing yacht continues to attract royalty, celebrities, and business leaders. Si x original cabins on the main deck, along with the two Owner's Cabins, have been restored to all of their former opulence. New cabins, all of which have ocean views, were added on the Captain's and Promenade decks and were refurbished in the mid-1990s. Spacious (41 0 square feet) Owner's Cabin No. 1, Lady Marjorie's cabin , conta ins an elegant French bed with gold-leaf embellishment, a 97-square-foot bath with white Carrara marble and gold-plated swan-neck fi xtures, mahogany chests, Louis-Philippe chairs, and marble fireplace. Owner's Cabin No. 2 (366 square feet), the former wood-paneled sleeping quarters of E. F. Hutton, contains antique furnishings, marble fireplace, and a 97-square-foot bath equipped with pink Carrara marble and gold fi xtures. Guests experience diverse and delectable fare from the fine dining restaurant established in the original saloon. Corridors, library, bar and deck are all true to the dream envisioned more than 70 years ago. There is no doubt that cruising on this museumquality heirloom captures the gracious lifestyle of its historical past. The three-masted , 360-foot sister ship, the Sea Cloud II, has spacious cabins, each with its individual charm. The Owner's Suites on Lido Deck have decorative fireplaces, nostalgic marble baths with gold fi xtures, and natural woodwork. The Lounge, the central meeting place for guests, provides comfortable seating arrangements in rich mahogany surroundings. Your days onboard will be spent relishing timeless traditions of the high seas as the expert crew climbs the riggings overhead. You will slip easily into ancient sailing rhythms between exotic ports of call . Treat yourself to a unique cruising experience in full luxury and jump aboard a Sea Cloud ship. It will no doubt be an unforgettable memory in your travel log of life. R www.seacloud.com www. vrexpo.net
The Sea Cloud sails the Caribbean in on a Black Sea voyage to historic ports. The winter, from December to March, and in autumn cruise in the Western Mediterranean April sets sail for the Western and Eastern will explore "Italian Masterpieces." The proMediterranean, where it remains until the gram includes exclusive visits to the Sistine end of October. Sea Cloud ll's destinations Chapel and Vatican Museums at times when include Southern and Northern Europe, the they are closed to the public, and stopping at British Isles, Scandinavia, and the Caribbean Islands. Peruse the Sea Cloud Web site at www.seacloud .com and you will find a variety of fascinating destinations to choose from . Spending your time aboard the Sea Cloud vessels is an experience in itself, but just as unique are some of the specialty cruises organized specifically for the Sea Cloud ships. The Sea Cloud II sails only under charter arrangements. One of the main organizations to charter the ships for European and Caribbean Uncommon friendships grow on an uncommon ship. cruises is Academic Arrangements Abroad, a 28-year-old Manhattan company picturesque Portofino, the classic inspiration that custom-designs itineraries in collabofor generations of artists and writers. ration with museums, universities and cul Kalos Golf, a North Carolina-based comtural organizations such as the Metropolitan pany, also specializes in golf cru ises on the Museum of Art, the Archives of American Sea Cloud vessels. Popular itineraries incl ude Art and the National Trust for Historic the British Isles, France, Spain and Italy. The Preservation. The programs have a personal Riviera Golf Cruise, scheduled five times a year touch as passengers hear recitals and lecaboard Sea Cloud or Sea Cloud II, offers a rich tures and take excursions ashore to view blend of scenic and challenging golf cou rses, private art collections or visit historic sites or including Monte Carlo Country Club, Co rsica places of natural beauty. and Sardegna. Kalos Golf cruises are high"Byzantium: Faith and Power;' an exhibiend and are particularly good for couples in tion at the Metropolitan Museum of Art, which one is a non-golfer, as a full program of inspired this year's summer cruise aboard Sea tours is also provided. Cloud II to the northern shore of the Black www.arrangementsabroad .com Sea. The ship sets sail from Istanbul, Turkey, www.kalosgolf.com 2005 VALUERICH MAGAZINE 39
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The desert of the American Southwest is a feast for the senses, awash with super-saturated color, alive with music, and heady with ancient flavors. The Inn ofthe Five Graces, a rambling adobe and river rock compound in the heart of historic Santa Fe, will indulge each of your five senses one at a time. Working closely with experts in various fields, the Inn offers a series of packages to focus a particular sense -Sight, Taste and Smell, Sound, and Touch. A private photography lesson will focus your vision on this dramatic region. Spend a half-day with an instructor at the renowned Santa Fe Workshops, working in either digital or film formats. You will emerge with a far greater understanding of camera craft and a stunning set of photographs. Santa Fe is a center of culinary excellence and distinctive regional cuisine. The Inn of the Five Graces will arrange a private cooking class with noted chef John Vollertsen of Las Cosas Cooking School. Taking place in the charming home kitchen of a renowned artist, the class concludes with dinner with the chef and host. Enhance your sense of sound with a private concert at The Awakening Museum. The Inn of the Five Graces will arrange a program by an acclaimed musical soloist or vocalist performing with The Santa Fe Opera. If you like, provide a "wish list" for your custom concert program, or, let the musician perform as inspired. Awaken your sense of touch in the downtown Santa Fe studio of Heidi Loewen . This accomplished porcelain sculptor will provide a private half-day workshop, walking you through the creation of your own object, which will be glazed, fired, and delivered upon your return home. Fees vary for each of the packages. R www.fivegraces.com
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300' OF OCEANFRONT AND LAKEFRONT Gorgeous British Colonial estate in excellent condition. Amenities include tennis court, movie theatre, fitness center, huge swimming pool with pavilion and lakefront guest house consisting of two suites.
Call Linda Gary Cell: 561-346-5880 BROKER Linda A. Gary Real Estate, Inc. 420 So. County Road Palm Beach, FL 33480 www.lindaagaryrealestate.com Email: lgary88@aol.com Office: 561-655-6881 Fax: 561-881-5231
LINDA A. GARY REAL ESTATE, INC. Licensed Real Estate Broker
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By David Willson
'Let's Be Small With Huge Imaginations' That's the slogan emblazoned in simple white letters on a black screen as you begin creating a custom paint job for your new MINI Cooper- the one you're building on the MINI USA Web site to be delivered at a dealer near you. The Web site is full of similar little slogans: "Let's use our horsepower for good:' "Let's join the fight against gas guzzling:' "More super. Less size:' "Let's protect each other from Meter Maids:' This one appears just before you are invited to assemble an online robot using the options and colors available for your MINI Cooper. Once completed, the robot image can be downloaded to become your computer desktop. In fact, you can even buy a MINI robot collectible toy in the MINI Motoring Gear online store. MINI makes it clear with a somewhat irreverent approach to their advertising campaigns, their customer relations and their owners' manuals - all of which are the work of some very humorous and talented writers and designers- that the brand is all about two things: driving and fun. In doing so, they've captured the admiration and attention of the young and the young at heart. In short, MINI has done more than build a hip car. They've built a culture, and it's beginning to look like the newest British invasion of America . But before we thoroughly enjoy ourselves reviewing MINI Cooper's quirky attitude, let's review what makes the whole thing possible - a great little car. The original Mini earned legendary status in the 1960s
"Every red light is a chance for a new beginning:' When BMW acquired Rover in 1994, they also got the Mini. Two years later, BMW announced that the Mini would be redesigned and reintroduced as MINI.
The all-new MINI appeared at the 2000 Mondial DeL Automobile show in Paris just as the last Classic Mini was rolling off the line. A year earlier, a panel of 130 international journalists had recognized the Classic Mini as "European Car of the Century:' With the same cheeky excitement that made the original Mini a legend, the new MINI Cooper burst upon the American scene at the 2001 New York International Auto Show with a dazzling demonstration of high-speed parallel parking and two-wheel driving stunts highlighting the MINI Cooper's exceptional handling and maneuverability. The first American Model year was 2002. The diminutive 11-foot 10inch MINI Cooper is cute and frisky in its basic model iteration . On the outside, it appears to have much in common with its classic predecessor. BMW The last classic Mini rolled off the line at the MG Rover plant in 2000. designer Frank Stephenson and
as a favorite of British celebrities from the Beatles and David Bowie to Peter Sellers and the Queen of England. The spunky little car also inspired fashion designer Mary Quant to create her famed Mini skirt. The Cooper name became forever entwined with Mini in1961 when racing legend John Cooper developed the Mini Cooper. Cooper recognized Mini 's inherent motorsport potential and his team produced cars that took numerous race titles. The Mini Cooper S became the stuff of legend with three Monte Carlo Rally wins between 1964 and 1967. The Mini's builder, BMC, went through some restructuring in the tough '70s and became British Leyland. The Mini reemerged in the '80s as the Austin Mini, regaining its cult status due to several www. vrexpo .net
improvements. Troubled British Leyland once again went through restructuring in 1988, becoming Rover. While the Mini remained popular, the financially challenged Rover was eventually sold to BMW.
his team were adamant that the new car would pay faithful homage to the original's styling cues. However, that is where the similarities end. The new car is quite a bit larger, and comes with more creature comforts than the original. Statuesque actress Charlize Theron , who did most of her own stunts driving both the classic Mini and a modern MINI Cooper for the movie The Italian Job, made the comment that she felt like her knees were up under her chin driving the classic, but the interior was quite roomy and comfortable in the new car. She was surprised that she had to move the seat up for her feet to reach the pedals. If you saw The Italian Job, you've already got an inkling of what makes the MINI Cooper so special. It is one hot little car. The MINis 2005 VALUERICH MAGAZINE 43
used in the movie were specially modified so they could be driven over Hollywood's Walk of Fame, down flights of stairs, over embankments and through the LA Metro Rail and sewer system. But even without movie stunt upgrades, the MINI Cooper and most certainly the MINI Cooper S are spry enough to impress just about any sports car enthusiast. Built on a rigid frame with a wide bulldog stance and MacPherson strut front suspensions, the car handles like it's on rails. The MINI CooperS, with its Supercharged, intercooled 1.6-liter overhead cam, 16-valve inline 4-cylinder engine and
MINI Coopers take the stairs down to the LA Metro in The Italian Job.
17" alloy wheels is practically ready for racing right out of the box. MINis are commonly found on the track in a variety of sport touring car divisions. The cars are raced in factory condition with limited required and allowable modifications for safety purposes. To race a Cooper, the modification costs are less than $5,000 and the Cooper S less than $8,000, exclusive of wheels. Though under-horsepowered in some divisions, the MINis are well known on the track for their handling in the corners and excel on road courses.
"Smallzilla" BMW has artfully taken the uniquely British sport driving enthusiast's experience to the next level incorporating quality and finesse into a body and interior that feels solid and airtight. The fit and finish of these cars are recognizably German, and yet MINis still retain a kind of quirky British user interface, featuring dash mounted window toggles and a giant centered clock speedometer. Some of the MINI's quirkiness is unwanted, however. Its rigid frame and sports suspension transmits every bump in the road -especially with the runflat tires of the CooperS. After a while, you'll find yourself doing the downtown slalom to avoid raised pavement and potholes. Still, most driving enthusiasts will trade an occasional jolt for the amount of fun this car provides. BMW is obviously courting the youth market with the MINI. As a result they've given us this snappy little car at a reasonably affordable price. A basic 2005 MINI Cooper lists at $17,500 and the MINI Cooper S starts at $20,950. The new MINI convertible, with its unique roof, that can be used partially rolled back like a sunroof under 50 miles an hour, starts at $22,000 and $25,450 for the CooperS version . 44 VALUERICH MAGAZINE
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Magazine MINI brand ad from the"Let's Motor" campaign.
At these prices, buying a MINI is almost an impulse decision. Once the impulse strikes you, half the fun of buying the car is individualizing it with the myriad options that are offered a Ia carte. Go ahead, load on the premium interior and the sports package, the amplified eight speaker Harman Kardon CD audio system with digital sound processing and aux input for your iPod and two tone leather seats. Options are reasonably priced too. It's hard to drive the price of a MINI up over $30,000, unless you order the John Cooper performance package, which increases the already ample 168 horsepower of the MINI Cooper S to 210 horsepower. The John Cooper kit costs $5,500 plus dealer installation charges (which can be substantial). MINI Cooper's quirky styling, a fun driving and reasonable pricing have made it one of the most popular cars in the world, and cer-
tainly one of the most popular imports to hit the U.S. in a long time. For three years running, the MINI Cooper has received the highest rating for a compact car in J.D. Power and Associates' Automotive Performance, Execution and Layout (APEAL) Study that measures owners' delight with the design, content, layout and performance of their new vehicles. The MINI Cooper and Cooper S were also rated a Consumer's Digest Best Buy as well as capturing Autobyte/'s Consumer Choice
Award . They also have garnered top awards and mention from Automobile Magazine, The Car Book and Automotive.com . And Edmunds.com cited the MINI CooperS in their Top 10 Sound Systems in Cars Under $30,000.
Even the government is a member of the MINI fan club, rating
The hot selling MINI Cooper convertible was introduced for 2005. www.vrexpo .net
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The already zippy MINI CooperS received a standard boost in horsepower and revamped gearing for 2005.
MINI Coopers at the top of the EPA's fuel efficiency list in the "minicompact" class for t hree yea rs straight years. MINI broke onto the scene in the U.S. with the potent t agline"Let's Motor" and a unique campaign that made creative use of display mediums such as magazines and outdoor advertising while forgoing TV commercials all together. This was a very different approach to marketing in America, where television is considered absolutely necessary when launching a new automobile. Custom-paint your car or learn performance driving techniques on MINI's game-like Web site. MINI's publicity stunts, print ads and billboards are edgy, but always about MIN I esprit d' corps. The message is that MINI is about more than just driving a fun car, it's about making playfulness an ethic you can live by- live and let live: "Let's be big enough to let ot her cars in:' "Put a little un in your orthodox:'
Perhaps the biggest success in reaching the youth market is MINI 's potent use of the Web. You can literally spend hours touring t heir highly animated Web sites, continually stumbling on new animated game-like pages that invite you to do anything from build and order a new MINI to take performance-driving lessons. Here is where MINI marketing edginess becomes positively razor sharp. Take for instance the launch of the MINI convertible. To establish 46 VALU ERICH MAGAZINE
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the pop-top's fun factor, visitors to the homepage were greeted with an online video clip that had them taking a running leap into a convertible MINI from behind. Just in case they thought that it might be some advertising fantasy, MINI invited th e m to visit toughlandings. com where they could select from a series of ten attempts by a stunt man to jump into a MINI Cooper convertible from behind. Needless to say, nine of the attempts are unlucky and appear to be quite painful. The result is like watching a segment from Fear Factor or Jackass television shows- only, on the Web site, you can hit rewind button over and over again. The slogan preceding this nuttiness captures the essence of taking it to the edge in a MINI, "Ahhh, the joys of jumping into a MINI convertible. The joy. The freedom. The faceplants:' V R www.miniusa.com www. valuerichonline.com
While Pat Buchanan's views are often considered controversial, he is generally acknowledged as one of America's most experienced political observers. He has been a senior adviser to three American presidents, Richard Nixon, Gerald Ford and Ronald Reagan . In December 7997, Buchanan challenged President George H. W Bush for the 7992 Republican presidential nomination, receiving 3 million Republican primary votes. And in 7996, he was an early strong challenger to Bob Dole for the nomination. In contrast, his 2000 Reform Party campaign is mainly remembered for its role in the infamous Palm Beach County "Butterfly Ballot," where the position of his name allegedly confused voters. Buchanan is the author of six books and articles which have appeared in publications ranging from Human Events and National
Review to the Nation and Rolling Stone. He has been a nationally syndicated newspaper columnist and a cable TV personality on CNN as a co-host of Crossfire and, most recently as guest host on MSNBC's
Scarborough Country. We recently interviewed Buchanan on the subjects of national election politics and its effects on small business.
What Small Business Should Know About
Big Politics An interview with Pat Buchanan
Interview RICH : I can't remember a political convention in the last 20 or 30 years in which there was any question about whom the nominee would be. What changed to cause this? Buchanan: It's because you've done away with the two-thirds rule for nominees, and when the requirement is just 50 percent to be nominated, you would have to have two strong candidates, such as Taft and Eisenhower in 1952. What killed that possibility is the current primary system. When I was with Nixon in 1968, there were about six really good contested primaries. We won all six. Now you have dozens of them, so what happens is that the early caucuses and the early primaries sort out 48 VALUERICH MAGAZINE
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the field. One candidate does well in Iowa and New Hampshire and accumulates $50 million in free media from all the networks, cable TV and the newspapers worldwide. He bui lds a head of steam that eventually, and very early on, eliminates all rivals, except for one who generally trails for a couple of weeks and then disappears. That's the way the primary system is structured. And frankly, I have no objection with it because the alternative is to have something like a nationwide primary, which would simply validate the Gallop poll at that time. And therefore the winning candidate would be the best known, and the most popular when the snapshot was taken. Even though I was far behind Senator
Dole in 1996, starting off behind Senator Phil Graham in some states, we picked out an early caucus in Iowa and defeated the field with a few thousand votes; then went one-on-one and defeated Senator Graham in Louisiana and came into Iowa with tremendous momentum and lost by just three points to Senator Dole in Iowa; then carried New Hampshire, and lost by a couple of points in Arizona. Had I won either Arizona or Iowa, as an outsider I could, and would, have won the nomination. But if you'd had a national primary, I don't think I would have gotten into the race. VALUE RICH: What do you mean by "as an outsider?" Buchanan: I didn't have a single endorsewww. valuerichonline.com
ment of a congressman, senator or governor. I was challenging for the nomination of the Republican Party basically from a position outside of politics. VALUE RICH: Do you think, the way the primaries have evolved, that they are used as a tool by the parties to essentially front their chosen agenda? Buchanan: Exactly. I knew the whole game w as over early in 1999 around February or early March when Bush's exploratory team announced that they had $36 million in the bank. That was the end of the outsider challenge right there. VALUE RICH: You are in favor of the primary system the way it is. But doesn't this rob a lot of Americans from having their input into who the candidates will be? Buchanan: Su re it does. The parties decide on their candidates. We have a twoparty duopoly now. It is something of a consumer fraud in some sense to say that America is a democracy, because the two parties have managed to eliminate third party candidates from the national debates, which are decisive in the election. And they have established their own primaries the way t hey wish. Their two candidates now have, because of past loyalty and voting patterns, pretty much an iron lock on 35 or 40 percent of the nation. No matter how weak a candidate of a major party is, he's going to get 35 or 40 percent. When you add the votes from both parties together, there is not enough left for a third party candidate to win . There is no doubt about it. The American people are kept out of the primary process to a great degree because the early primaries are decisive. New Hampshire and Iowa for example are more important than California and New York, because the winner of Iowa and New Hampshire becomes the favorite in Californ ia and New York. But I do think the American people pa rticipated energetically in our campaign . We had 160,000 small contributors in 1992 challenging a president and in 1996 challenging the Republican Pa rty. We came from the outside and defeat ed major Republican fig ures like Phil Gra ham, the chairman of the finance committee, and the chairman of the foreign relations committee Senator Lugar, Governor Pete Wilson of California, and si x www. vrexpo .net
Republican presidential candidates (left to right) Alan Keyes, Morry Taylor, Steve Forbes, Robert Dornan, Sen. Robert Dole, Sen. Richard Lugar, Lamar Alexander and, the outsider, Pat Buchanan before the New Hampshire presidential debate in February 1996.
or seven other national Republicans, and almost defeated the senate majority leader Bob Dole. You're right that the decision to defeat Dole would have been taken by a tiny minority of Americans in Iowa, New Hampshire, Arizona and South Carolina. Let's assume if we had won all four of those, we would have won the nomination. But at least an outsider could have won, and outsiders participated in those early primaries with contributions.
"We have a two-party duopoly now.lt is something of a consumer fraud in some sense to say that America is a democracy ..:' If you talk about active voting, a voter in let's say Oregon has virtually zero participation in the choosing of a nominee- unless they do so by contribution or volunteering . VALUE RICH: Most recently, we saw two big money players waging a war for the White House. How did Clinton, who essentially didn't have the bank account or the net worth, build up the steam financially to be able to take on that national challenge? Buchanan: I was in the race with Clinton. We were both in New Hampshire together. Clinton started off with a political base in Arkansas, and a small base of major contributors out of Arkansas and Democrats who were looking at him nationally as the most
likely to defeat George H. W. Bush in 1992. Clinton went up and lost to Tsongas in New Hampshire, but he ran stronger than anyone else. Then he went south, and Tsongas had no base in the South. Clinton swept through the entire South. Within three weeks of New Hampshire, it was clear that Clinton was going to be the nominee, even though Jerry Brown chased him through the Midwest in the later primaries. It got down to that oneon-one situation I was talking about. By winning the nomination, Clinton automatically inherits, as I mentioned, about 40 percent of the country. You are 40 percent of the way home for the presidency of the United States if you win the primaries and the nomination, and enormous amounts of money will accrue to you if you are a creditable candidate. What helped Clinton beat Bush, was the fact that Ross Perot had $3 billion and, after I did well against Bush in New Hampshire, he decided to challenge on a lot of the populist issues that I had run on, and some of his own -the deficit. He got in, and he pulled away populist conservative votes that would have otherwise gone to George H. W. Bush . So Clinton wins the White House in a three-way race against a president who has lost popularity. I think current President Bush blames Ross Perot and me for his father 's problems in '92. Of course the economy w as in poor condition and the president did not run an outstanding campaign. Once Clinton slipped through in a three2005 VALUERICH MAGAZI NE 49
polls, for the reason that Mayor Giuliani 's positions on social and cultural issues like gay rights, illegal immigration and right to life are not only beyond the mainstream of the Republican Party, they are pretty much outside the Republican Party. I think he would have a hellish time in the Iowa caucuses and the South Carolina primary getting beyond those positions- that
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are really scrutinized. Candidates spend a year in Iowa. The mayor might feel that his national recognition can enable him to go into Iowa late, but he'd have to run through the same inquisition. And I'm not sure the mayor would survive it. VALUE RICH : Let's talk a little bit about the 527s. As I understand it, the FEC ruled that they were not subject to the McCainFeingold finance law and it became a loop-
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'5: Independent candidate Ross Perot helped Bill Clinton win the presidency by securing a position in the debates and pulling conservative votes away from the Republicans.
way race and won the presidency - he could take a vacuum cleaner around the country and pick up checks. A UERICH : Let's close out this whole primary issue. So it's your contention that the primaries don't need any reforming. Buchanan: Look, when you say reform, who will reform them ?The parties will reform them . And what will they do? They will reform them so no outsiders can be nominated. So I think when you say reform, you will reinstall the foxes back in the chicken house. The parties are essentially machines designed to maintain monopoly of power. There was an opening in the old days, I think, for a movement candidate and an outsider. I would put the old days in '92 and '96. McCain almost made it in 2000, but of course he was a United States senator, had his own 5() l/ll.l\lÂŁR\CI\ t<III.Gt.Z\tlÂŁ
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basis of support and had enormous national media - more favorable media than any primary candidate I have ever seen. VALUE RICH : So essentially, to buck the parties, it will take a candidate who is enormously charismatic, well-known and with a huge bank account? Buchanan: A huge bank account now, and that's the best combination. If I'd had Ross Perot's $3 billion, I would have spent $2.9 billion in my primary run, and then if I lost, I'd see if I could live on the final $100 million (laughs). VALUE RICH : Do you think John McCain might have a chance if he were to decide to run again at some point? Buchanan: I think John McCain would be the front runner for the Republican nomination even though Rudi Giuliani leads in the
erwise FEC would have not ruled thus. The truth is that I found the 527 ads, especially the Swift Boat Veterans for Truth, the most effective of the presidential campaigns. I don't have a problem with outside groups making their case to the American people why one candidate should be defeated and the other elected. And secondly, I don't think you can devise a system that will keep people of passion or people with money from participating where they feel the outcome of that election is so critical to what they believe in or what they're concerned about. I think it is utopian to believe, for example, that big business, with all its wealth and all its lobbyists, is going to be denied entrance into the political process considering that the federal government controls one-fifth of the entire national economy and can virtually regulate every decision that big business makes. They're going to find a way www.valuerichonline.com
around the law, th rough the law or inside the law to influence the outcome of an election . We are dreaming if we think a force so powerful, with so critical an interest, is not going to intervene. V LUE RICH : Do you really think big business is one entity? Buchanan : I think the giant business corporations are certainly an entity. Let me give you an example. The vast majority of the Americans opposed NAFTA. At the time of the vote, even the majority of the Republicans opposed NAFTA. The president almost lost Ohio because of these trade deals and the jobs issue and the outsourcing of jobs to China. Nevertheless, both the Republican and Democratic Party will remain free trade parties because they are bought and paid for by giant corporations
and transnational corporations who feel they have a vital interest in moving their production outside of the United States to low wage countries like China. The parties are beholding to transnational corporations even though the voters are against them. Now this leaves a great opening for a third party candidate. If you had run in 2004 on the issues of keep the jobs home, defend 11
1think the strength in the small businesses is, quite frankly, in numbers:' the boarders and bring the troops home -funded to the same extent as the national parties, $500 million or so- you could have clearly gotten as large a share of the vote as Perot got in the year 2000. I don't think
you could have won because of th e innate loyalty problem, but you could have gotten 20 percent of the vote. I think the only way to crack big businesses' grip on policy and on government, is to reach a situation where, quite simply, the party rebels against its masters - as I think the Republicans are about to do on the illegal immigration issue. VALUE RICH: I think I hear you saying that election reform is basically a bogus issue. Buchanan: It's a sandbox where they put policy wonks in to try to reform a system that they know cannot be reformed . VALUE RICH : ValueRich is very involved with the situation of the small-caps today. They've lost their forum within Wall Street because of market changes, the consolida-
Republican presidential hopeful John McCain and his wife among supporters a day after his defeat to George W. Bush in the February 2000 South Carolina primary. McCain injected new acrimony into the race with a bitter speech after the South Carolina loss. www.vrexpo.net
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t ion of brokerage houses, the economy, new regulations ... Buchanan: Well as you know, big business can easily devise ways and means to meet regulations that are far more onerous, painful and costly to smaller businesses. I'm very much a small businessman myself. Believing in that should be the bulwark of a conservative movement in the Republican Party. I think the strength in the small businesses is, quite frankly, in numbers. It is cert ainly not in wealth . You cannot accumulate the kind of wealth that these big companies can, and some of the very large ones are behemoth.
RICH: There has been a great divide that has occurred on Wall Street between the larger public companies and companies with market caps under $500 million, partly as a result of the SarbanesOxley Act (SOX), new corporate governance and research laws. There are incredible changes taking place with NASDAQ and the bulletin boards. We met with a CEO of a public company the other day, HearUSA (EAR), which has a network of 156 outlets and sells hearing aids. It trades on the American Stock Exchange and has revenues of just under $100 million. This company, which is only now becoming profitable after 17 years, now has additional SOX overhead of $1 million in legal and accounting expenses- the same cost to a company that is doing $900 mi llion in revenue. They threw the baby out with the bathwater, didn't they? Buchanan: Well sure. That point demonstrates very graphically and dramatically that between very big business and big government, there is a marriage of convenience, which tends路to squeeze out smaller companies. LUERICH: But the smaller companies are the driving economic force of our nation. The small companies employ something like 75 percent of the people in this country. Buchanan: The giant corporations are down to, what, 10 percent or less? What I'm saying is, it's the real world. It's not as it ought to be, but it is as it is. Back in the civil rights days, if you imposed some kind of affi rmative action or quota on a big company it simply would create a new department for compliance and staff it and move on. You 52 VALUERICH MAGAZINE
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do that with a smaller company, where its profits are marginal, and you've wiped out all of its profits. We've created a Darwinian world where government, de facto, is on the side of the big battalions. ERICH : When they had the opportunity to create this sweeping change through SOX, do you think there was some ulterior motive? Buchanan: No I don't think so. The political system is very shortsighted. The Congress of the United States is not a deep institution. It is a very responsive and reflexive institution. For example, during the Enron scandals and all the rest, you had Sarbanes-Oxley and
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Democratic candidate John Kerry nearly won Ohio and the presidency on the issue of job losses.
things like this so that congressmen can go home and say look what we did. We cleaned it up and responded to the crisis. It's a crisis-oriented institution. The media seizes upon an alleged abuse and they turn to the Congress and say, "What are you going to do?" And the president and the Congress say we will defend the people's interests, and here is what we are going to do. Then they act. And they signed a bill and a law, and imposed a burden on all business, and they moved on . Their job is done, and others have to live with what they've created. What they've created is onerous. The weight does not fall equally. Quite obvi-
ously, if the weight falls identically on small business and big business, then the weight on small business is far greater. That's the world in which we live - the world in which some of us have been trying to do battle against big government, unsuccessfully, because as I write in my book Where the Right Went Wrong, we have two parties of big government now. The Republicans and the Democrats are two wings of the same bird of prey. The Republicans have come to realize that the way to win a majority vote is to do what the public demands. And that means that if the public is happy with big government, then they become a big government party. And their philosophy and principles are cast aside in the pursuit of power. And, it's hard to argue with their success from their standpoint. V LUE RICH: You said one thing interesting earlier, and that is ... Buchanan: I hope I've said more than one (laughing). VALUE RICH: That's true. You've said quite a few interesting things. But, what perked my ears up earlier was when you said that small businesses' strength is in numbers ... Buchanan: It is. It used to be the National Federation of Independent Business (NFIB) and small business groups like that were very much listened to when I was back in the White House, because they represented so many businesses. We knew there were an awful lot of people out there that they represented, and they were hurting. That was the backbone of the Republican Party and the conservative movement to which I belonged. VALUE RICH: Are those organizations still heard in Washington? Buchanan: They are still there but one hears less and less from them and more from the business roundtable and the big mules. And so I think that's very, very difficult. We've seen an awful lot of these small companies go under. I just saw in Business Week that Summitville Tile in Ohio, which is owned by a wonderful fellow and friend of minehe's supported me and given small fundraisers for me - went into Chapter 11 because of China. And, the government seems not to care. www. valuerichon Iine .com
Why is the government addicted to globalization? And in who's primary interest is globalization? Who are the major driving forces for it? They are the transnational companies that deal across borders and would like a borderless world. There is a callous indifference to dropping small American businesses into a sea where the businesses all over the world are paying their workers a tiny fraction of what Americans need for a living wage. VALUE RICH : It's kind of scary, because what's really keeping our economy above water right now is small business, and yet it's being decimated. Buchanan: It is being decimated, and especially the manufacturing sector. Again, the only response, I think, is politically from the people. Mr. Bush almost lost Ohio because of the lost manufacturing jobs there. VALUE RICH : Isn't it interesting that jobs were a key issue, and yet I don't recall hearing the point hit hard during the debates or in campaign advertising that small business is responsible for most of the jobs in America, and that there are issues with small business, where it needs to be supported better by government? Buchanan: I think you're right. Most of the advertising in campaigns - because the campaigns are so close and the parties are so even- are attack ads to convince the undecided that the alternative is just hellish or unacceptable. But you're exactly right. The job losses in Ohio almost brought the president down. If you look at the exit polls of those Americans who considered jobs and the economy the number one issue, Kerry won three to one. If they considered taxes
Buchanan: There is no doubt about it. What Republicans are doing is cynically using the Voting Rights Act of 1965. As it has been interpreted, the Voting Rights Act said you cannot dilute the power of the minorities in Congress, and it designates Hispanics and African-Americans as minorities. What Republicans do is say, "Fine, let's take all the African-Americans and all the Hispanics and move them into heavily Hispanic and African-American districts and virtually guarantee that they will vote Hispanic and African-American, and thereby increase representation or maintain it in the House. By so doing, of course, they are moving Democrats into districts where they are 70, 80, 90 percent Democrat and they leave the other districts 60 percent Republican to 40 percent Democrat and increase their margins. They did it very successfully, Tom Delay did it - I think he must have picked up a net of four or five seats in the House in Texas alone and made these permanent Democrat and permanent Republican seats. VALUE RICH : Isn't this the same as rig ging elections? Buchanan: Well that's exactly what both parties do. The whole idea is to rig the elections so that the outcome is that your party is in power. That's what gerrymandering is all about. VALUE RICH : Why shouldn't we be alarmed about this? Buchanan: (laughs) You can be as alarmed as you like. But it's rather irrelevant whether you're alarmed or not. VALUE RICH : What can be done about it? Buchanan: Why is it a problem? You've
the number one issue, I think Bush won four to one. So, when you got to the issue of jobs it was a real vulnerability for Republicans, but the president survived it. And he is an ideological free trader and his big business friends very much have a vested interest in globalization. But I think the backlash is coming there, as it is coming on illegal immigration. We saw resistance to the president explode in the House of Representatives, to the point where he almost lost his intelligence Czar. VALUE RICH : I have one last election question about district gerrymandering in the House ...
got a Democrat or a Republican Party. It might be well, I guess, if all districts were 50150. I don't think you could do that, but if you got them so that you had, say, 350 districts that were really very, very close, I think you would have a House of Representatives that would reflect national trends - but again, you have two political parties that control gerrymandering. Each of those parties has a vested interest in power. And each of them is going to do its level best, frankly, to butt the other out of existence to the degree that it can - or to so dominate the state, that they leave the other party getting fewer congressional seats than its total
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vote would have justified. Both parties are doing it. With due respect, it's like a football game where we are simply the spectators. We are not deciding the outcome. We can boo or cheer for whomever we wish, but it is the players on the field that decide it. They are "Rs" or they are "Ds" - and they will use the tactics they can within what the court decides, the court being the referees, to win the game- and not only win it but run up the score because that's what is all important. That is the real world . VALUE RICH : Is it possible to get back to, or to develop, a representative form of government then?
Buchanan: Well, I think we have a twoparty system that is enshrined, and it is almost impossible for me. See, my view is that a third party- which represents the ideas that I mentioned, which are frankly enormously popular today: economic patriotism, putting American workers and American business first, controlling America's borders, and giving up this foreign policy of imperialism and adopting an America first foreign policy - is what you want, or what you need, and what I believe we ought to have. I think those are ideas whose time has come. But I do not believe that without billions of dollars that you could overcome the other two parties, or even get yourself into a presidential debate to articulate these issues. And I do believe that the only way to defeat these parties is, in a way, from the top down. Basically, to get say a 20 percent vote in one election and then sort of force one of the parties in your direction if it wants to survive -probably the losing party in the election. So in other words, what you would want to do is, for example as in the Perot-Bush situation from '92, have the Republican Party move in the Perot direction, to reshape itself as a populist conservative party, but that did not happen. VALUE RICH: I have to say, Mr. Buchanan, that it is wonderful to listen to you when you seem much more relaxed and when you do not have to fight for talk time. Buchanan: Thank you very much. I've been fighting with MSNBC for a show where we have a little more time to talk rather than playing Clyde Beatty the Lion Tamer. VR 2005 VALUERICH MAGAZINE 53
By Roland Savage
Technological advances and the changing face of regulation have each had a dramatic effect on the structure of today's securities industry and continue to affect the markets of tomorrow.
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In most industries, open competition (overseen by strict anti-trust guidelines) fosters improvements in efficiency fueled by ever-improving technological solutions. The securities industry however, has not evolved like any other industry. This is due to the interaction of three major factors: 1. The securities industry is an oligopoly. 2. Technology is considered a threat, not a benefit. 3. A governmental agency (the SEC) sets rules that exempt the industry from traditional business constraints. These factors have permitted behavior that would be impossible in any other business sector and have enabled the industry to operate in a fashion that contradicts basic economic premises of competition and evolution . In the securities industry, what is expedient becomes practice and what is practice becomes legal, and, to top it off, the arbiter of change is an oligopoly supported by a cooperative regulator. Historically, limiting access to the markets ensured extraordinary profits for a chosen few. Consequently, advances in technology and the education of private and public companies as well as the public investor were not major objectives of the industry. In a strange dynamic, the two biggest assets of the securities industry were ignorance and inefficiency, ensuring that private investors and public companies paid the freight for a system designed to maximize returns. The simplest and most dramatic example
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ar â&#x20AC;˘ conom1cs and the Challenge for Small-Cap Companies were a financial boon for securities firms that supported a status quo of attractive margins, gentlemanly cooperation and, in a strange way, ethical behavior. Profits were assured and entry into the club was limited. Had the government not eliminated fixed commissions, the business might have evolved, with firms competing to differentiate themselves by adding value through providing better execution of customer orders, better research to discover truly worthy companies, and more beneficial investment advice tailored to the needs of specific personal or corporate customers. Subject to the basic economic principal of competitive pricing, they would have had to succeed by raising the quality of their products and services to attract and keep customers. Unfortunately, with an industry so used to cooperative behavior, it was inevitable that the firms would attempt to create another model that ensured their risk-free profits rather than be subject to normal economic forces of competition . www.vrexpo. net
Fixed commissions were an enormous cash flow to the firms for executing trades. So, when they were eliminated, firms looked to the only area with enough transaction volume to make up for the loss. How do you
In the securities industry, what is expedient becomes practice and what is practice becomes legal, and, to top it off, the arbiter of change is an oligopoly supported by a cooperative regulator. make up for a lower level of commission rates? You create an environment where you control the price of the product. Once you control the price of the product, the level of commissions becomes unimportant. We should have expected no less. The pre-
Editor's note: This article is edited from a speech that Roland Savage presented at the ValueRich Small-Cap Financial Expo in Palm Beach, Florida, on March 70,2005 .
disposition of the firms to act in a cooperative fashion was obvious from past behavior. The model that they created was NASDAQ. In NASDAQ, the firms had a perfect environment to exceed the profits of the fixed-commission era . However, to accomplish that, three t hings were necessary: 1. Competing market makers must cooperate to maintain wide spreads based not on price, risk, volume or liquidity, but what the market would bear. 2. Competing market makers must trade among themselves, with the objective of no stock positions at the end of the day and no exposure to risk. 3. Public orders could have no standing and could not enter the market to narrow the spread or show true interest. Now, this is where economics and regulation blended to enable the securities industry to act in ways other industries cannot. The valid attempt on the part of government to increase competition by eliminating fixed commissions was almost immediately undone by an SEC that appears preoccupied with ensuring the health and profitability of the major member firms- the oligopoly. The NASDAQ model is completely dependent on the cooperation of market makers to ensure profits and the exclusion of the public to maintain its edge. In allowing the NASDAQ model, the SEC changed the basic economics of the business, allowing practices that would be illegal in any other industry. If it's legal, economics tells you to do whatever results in the greater return. The industry regulator allowed public stockholders to be disenfranchised. The NYSE and Amex were forced to stand by silently because they were, in effect, owned by the same people who created NASDAQ. The growth of NASDAQ was assured, and the quality of the market was doomed to be secondary to the collusion of traders. NASDAQ grew and became the darling of academics and the SEC for its "open" electronic market. Public companies and inves2005 VALUERICH MAGAZIN E SS
tors were overwhelmed with slick advertising and phony research, paid for by the exorbitant profits generated by the world's greatest fixed deck. The flawed NASDAQ economic model aborted any move toward greater efficiency and rewarded firms that operated contrary to the public interest. End of the NASDAQ Era
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In the early nineties, when the Justice Department was finally called in (by the Small Order Execution System bandits, no less), it took investigators only a matter of months to uncover the corruption of the system and fine the firms a billion dollars- which they paid happily, considering the multi-billions they had made with the big fi x. The SEC was finally put in a position of doing something. It changed the order-handling rules so as to give public orders standing and, in doing so, chang ed the economics of the business again. With public orders having access, the market maker cooperation element was gone and NASDAQ was no longer an attractive model. But there was one more dance left on the card- the Internet bubble that allowed $10 trillion in market value to appear and disappear and an estimated $60 billion of capital to be misdirected through laddered IPOs. It was a last fling where the market makers had no positions and volatility attracted the players, who wound up owning all that paper. NASDAQ went from 1,500 to 5,000, but now is hovering around 2,000. It is more than the type of company you trade, it is the nature of your trading model that allows such swings. It is interesting that, in the downswing, NASDAQ lost 75 percent of its value while the auction markets, the NYSE and Am ex, lost from 25 to 30 percent. This might be a good place to reinforce that change in the securities industry typically evolves not toward a more efficient system but toward a more profitable one. The rise of NASDAQ is the perfect example. Before NASDAQ was established, companies moved from the pink sheets to the Amex to the NYSE. They would first move from an inefficient dealer system to an auction model on the Ame x, where there was as little interference from dealer intervention as possible and everyone had direct access to the market. Then they would move to a www. valuerichonline .com
more prestigious auction market where the big companies traded- the NYSE. The creation of NASDAQ enabled the firms to keep companies in an inefficient and enormously profitable market for as long as possible and, through smoke and mirrors, make them feel that they were on a hightech electronic exchange. The height of this absurdity is that each morning select companies press a NASDAQ button to nowhere on CNBC. If your company is really special, you get your face plastered on its Times Square electronic bulletin board. The only reason NASDAQ still functions is because it was temporarily saved by the volatility orgy of the bubble. Master packagers still attempt to portray a robust trading platform, but today NASDAQ market makers do less than 17 percent of the trades in NASDAQ stocks. In fact, the NASDAQ recently acquired lnstinet's electronic communications network (ECN), effectively throwing in the towel. With the change in order-handling rules, decimalization and a stagnant market, NASDAQ is a market whose time has gone. In recent years, ECNs have taken the trading volume from NASDAQ. A number of previous NASDAQ market-making firms have started their own ECNs. Archipelago has created very attractive execution insurance by routing trades through its system instantly to the best markets if it can't match them with orders on its book, thereby creating the ultimate matching system. Technology is entering the markets because the cooperation model is finally broken. Nevertheless, the SEC is still contributing to market inefficiency by allowing payment for order flow and soft dollars. Through its inaction on these issues, the concept of best execution is still economically disadvantageous. Since payment for order flow and soft dollars is legal, rational purveyors will do all they can to increase the level of payment for order flow and effectively change a protected customer asset into a commodity to be sold to the highest bidder. This creates an environment that will support the most inefficient of markets in order to gain the greatest amount of payment. It may be unethical to take advantage of the customer, but, since it is legal, economics points the large firms in the direction of higher returns. Another example of the SEC favoring the www.vrexpo .net
interests of the large firms over the public is the elevation of transaction speed over quality of execution. The more transactions you make, the more money you can make. In spite of the obvious advantage this offers to large firms, the SEC is supporting an electronic environment where speed overwhelms price improvement and the prospect of easier transaction regulation overwhelms the benefit of an efficient pricing mechanism. The Danger otWell-meaning Government Economics is the driving force behind any rational business action . Therefore, the ability of a well-meaning SEC to unintentionally change the economics of the industry is the most dangerous variable in the evolution of a truly efficient securities industry. As we learned from the NASDAQ era, combining the interest of the large players in an industry with a well-meaning but misguided
-'We have seen decades where â&#x20AC;˘â&#x20AC;˘â&#x20AC;˘ you could make more money from trading the stock of a company than building the company itself. ' regulator can create significant unintended consequences and have a major adverse economic impact. In addition, the abuses in the market and the unacceptable actions of corporate leadership during the NASDAQ era gave rise to even more governmental incursions, with further well-meaning but flawed legislation. Sarbanes-Oxley (SOX) will go down in history as a monumental miscalculation on the part of the Congress, with enormous implications for small-cap companies. As a result, smallcap companies must seriously reconsider the implications of a decision to go public or remain public in what is becoming an increasingly hostile environment. Now, let's pull together what I have covered and put it into the context of small-cap companies. We have seen decades where trading profits have overwhelmed other interests and created a culture where you could make more money from trading the stock of a
company than building th e company itself. The NASDAQ model of widening spreads, trading to go home flat and excluding public orders was a perfect environment to trade anything. A large number of companie s were brought public because firms made good money on the transaction and then even more money on the trading. Whether or not it made good economic sense to go public, the allure of trading profits in a ri sk-free model made some firms a little overzealous. Today we have a very different story. The economics of the industry encourage big deals and fast trading. The infrastructure of large firms makes it cost-prohibitive to do small deals, and, with a lack of easy trading profits, speed of execution is of great importance. As the industry concentrates more on the big deal and the SEC continues to act as if anything small is risky and bad, the small-cap segment must seriously consider its options. While many acknowledge the importance of small business to the economy and job creation, nothing positive seems to emanate from talking heads. As mentioned before, the historical evolution of the markets appears to be predicated on the needs of the oligopoly and the perception of acceptability with the SEC. Recent history has shown that the Justice Department and the offices of various attorneys general, in addition to the SEC, have contributed to industry regulatory changes. Three Major Threats to Small-Caps In my opinion, a major threat to the health of the small-cap market is the "one size fits all " obsession on the part of regulators and the economics of being public. Another serious threat is the misunderstanding of what it means to be a public company. The third is the lack of appreciation and availability of a supportive and efficient marketplace. Let's take them one at a time. 1. One size fits all The proclivity of the SEC and Congress to impose regulation without understanding the nature of small business is a national disgrace. When Arthur Levitt and Paul Volker write an op-ed piece in The Wall Street Journal singing the praises of SOX, using GE as an example of the cost benefit of the regulations, it borders on the bizarre. There is such an intellectual disconn ect in the 2005 VALUERICH MAGAZINE 57
economic thinking of regulators that it has reached crisis proportions. No one is more respectful and supportive of effective regulation than I, but there is a
point where the cost of well-meaning but largely ineffective regulation overwhelms the capital process. Steve Boyco advances the concept of risk
President George W. Bush signed corporate fraud legislation on July 30, 2002, with (left to right) co-authors Sen. Mike Oxley (R-MD), Sen. Paul Sarbanes (0-MD), Sen. Trent Lott (R-MS) and Tom Daschle (S-SD) looking on. 58 VALUERICH MAGAZINE
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vs . uncertainty. Large companies that have revenues, earnings and size can assess the probabilities of success vs. risk, but smaller, developing companies face uncertainty rather than risk because so much is beyond their control. Regulating both types of companies the same way leads to a situation where the cost of regulation is far greater than the benefit and the result is economic stagnation. Regulators must gain a better understanding of the nature of business and the severe unintended consequences that often follow ill-advised actions. Small companies are not little big companies. They have different challenges, they have different needs and they are most in need of the efficient transfer of capital from investor to enterprise. The one-size-fits-all mindset is a cancer eating at the basic promise of capitalism in this country and if not addressed will have significant implications on our ability to compete in an ever-expanding world economy. 2. What it means to be a public company The promise of cashing in by going public at high price multiples can be a great temptation, but the reality of being a public company can be far different. In theory, public companies attain admittance to a market that will reflect their achievements and monetize their accomplishments. However, nowhere is there a greater difference between theory and reality than in the securities industry. While the largest companies have millions of shares, thousands of shareholders and consistently heavy trading volume, small-cap companies may not. While the largest companies receive robust analysis and wide interest, small-cap companies may not. The essence of efficient market theory is the immediate discounting of information, and small-cap companies operate on a level where that may not be the case. While being small is not bad, it is more difficult in a world designed for the largest companies. The expenses of being public are increasing at a rapid pace, and the markets are moving in a direction that might not be designed for the interests of small-cap companies. Small-cap companies more resemble private companies that deserve access to public capital. They must understand the workings of the market and rationally address their special challenges to maximize their opportunities. They must maintain www.valuerichonline.com
business common sense. The economics of being public must be examined. With costs increasing, the size at which a company can rationally go public is growing and the nature of public companies may be changing. The issue of staying private for a longer period of growth or returning to private status is being forced on companies by the increasing cost of regulation and the evolving structure of the marketplace. 3. Availability of suitable marketplaces While the largest companies have a high level of natural liquidity and can effectively be traded in electronic marketplaces, smallcap companies must have access to a more supportive and efficient market model. There is a need for capital commitment to stabilize the ma rket in stocks with smaller floats. The difference in the economic interests of market makers has a direct influence on their pattern of trading . I previously described the reasons for the rise and fall of NASDAQ, but the basic economics of a dealer market is important to understand when choosing a marketplace. Dealers make money on capturing the spread on the stocks they trade, and they limit their risks by attempting to end the day flat, with no capital commitment. Theoretically, the perfect NASDAQ stock would be a dollar stock with a dollar spread. Not much good for a company, but great for a dealer. Specialists in auction markets operate from a long-term perspective. They commit capital to smooth out the trading in a company's stock and create an environment of less volatility, so the stock has the best possibility of trading at the company's intrinsic value. Once that occurs, the company will issue more shares and become more attractive as a trading product. The interests of a specialist and the company are economically identical. The fact that the SEC allows companies to go public without access to supportive markets is a disgrace, and its benign neglect of the Bulletin Board and the Pink Sheets is a scandal. With the Amex regaining its independence from the NASD, I have great hopes that we will establish a second tier to allow smaller companies to have access to the supportive markets they deserve. The issue of private equity, however, is becoming far more important. Private comwww. vrexpo .net
panies need better options for raising the funds to grow to a size where going public is possible. And individual accredited investors, as well as venture funds, should have a more efficient platform in which to interact with real companies. A friend of mine, Lou Meade, is starting the Private Company Marketplace Exchange, where private companies and accredited investors can interact to provide capital , or where public companies that 1
The fact that the SEC allows companies to go public without access to supportive markets is a disgrace, and its benign neglect of the Bulletin Board and the Pink Sheets is a scandal.' return to private status can still have an effective source of capital. They even provide means for accredited investors to trade their positions in private companies with other accredited investors, giving them a level of liquidity they never had before. Technological advances and the Internet have enabled this concept. Participating companies will be required to have audited financials and report very much like a public company, but without the unnecessarily high costs of requirements placed on public companies by various
agencies. There will be an exchange mediation panel. The ultimate regulator will be the Justice Department and the various state attorneys general, who will be involved if there is any attempt at fraudulent activity. The Voice of Reason
To sum up, we are faced with a rapidly changing securities industry that evolves in ways that sometimes favor one segment of the market over another because there has been a serious lack of vision on the part of both the regulators and the major member firms that make up the oligopoly. Nevertheless, change can also provide for a more efficient and fair market if we understand that economics and integrity are the foundation of a successful marketplace. We must realize that our issues are fundamental to the economic health of this nation and that our voices are the instrument necessary for our success to occur. VR Roland Savage is a thirty-year veteran of the securities industry, most recently as a partner in an American Stock Exchange specialist unit. He previously was a Vice President at Fidelity Capital Markets and prior to that spent fifteen years on the staff of the Am ex. He began his securities career as an investment analyst in the Corporate Finance Department of The Prudential Insurance Company. He received his MBA from the University of Chicago Graduate School of Business and his BA at Fordham University, and served as an officer in the U.S. Navy from 1968 through 7917.
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2005 VALUERICH MAGAZINE 59
The Next 425 NeÂĽ~ Names in the S&P 500 Remarkably, 425 companies in the S&P 500 were not there 25 years ago. As the world economy continues to grow and change, new industries are created and new opportunities develop. While so much is made of long-term investing, even looking at the companies that have remained in the S&P, only a handful have outperformed the index. While I am a tremendous advocate of equity investing, I am only interested in t hose companies that have certa in characteristics - healthy ones that show current growth. I am focused on identifying the next 425 names that will be entering the S&P over time. Interestingly, many of these growth companies are funding their expansion in a new way- through PIPES (Private Investments in Public Companies). In recent years, the cost and timeframe for smaller companies to float secondary stock offerings made raising new capital difficult. In addition, larger brokerage firms were not interested in doing the capital raises of only $5 to $15 million that smaller companies needed to get to the next level. This is how t he opening for PIPEs arose. Smaller broker/ dealers and hedge funds have the funds, or access to the funds, to do t hese kinds of transactions quickly. While often a savior to smaller companies, the PIPE transaction can be tricky. In some cases, the "funders" do not have a suitable timeframe and do not hold the shares long enough. In t hese cases, the company may see their share price under pressure as these new shares are sold into the market. New capital is required by smaller companies to grow and PIPEs can offer this capital. But smaller companies should be careful of who is helping them raise the money- investors or flippers. It is critical for small companies to remember that they do not need to run with the la rgest crowd to be profitable. In fact most large mutual funds buy the same largest publicly traded companies. It is for this reason I believe the smaller funds, hedge funds, and the individual investor have a significant advantage over larger institutions today. An 60 VALUERICH MAGAZINE
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By Jordan Kimmel
investor in the best small companies, with a 3-5 year time horizon, can have the most superior investment results of all. Once an under-followed and undervalued company is identified, investors must have patience to let the investment work out. But it is also important to monitor the progress or deterioration in the company 's financials. Holdings can and should be evaluated through unbiased measurements - not by management's updates about "how the story is going:' Smaller companies, that wish to be in the S&P 500 someday, need to focus on keeping quality investors and on presenting them with results rather than "the story." When companies show continued revenue and margin growth, it is usually only a matter of time until the institutions take notice. In order to be patient and feel comfortable holding smaller companies, I believe the selection process must be based on substance rather than sizzle. In every market there are many "story stocks" that attract capital only to frustrate investors over time. It is the disciplined process of identifying future "magnets," staying patient and monitoring the progress of each company for continued growth that enables investors to generate true wealth over time, and companies to
grow into leaders. I have developed what I call the "Magnet Stock Selection Process" to help identify future market leaders. The process combines the best aspects of value, growth, and momentum investing . By screening for top line revenue growth coupled with margin acceleration, we are able to identify companies with new products and without current competition. We look for companies with little institutional holdings that dominate a new market niche. We look for strong cash flow, low debt, in addition to evaluating companies with a host of Magnet's proprietary financial ratios. This process allows us to uncover the best of the smaller, new companies that we believe will continue to appreciate in each market cycle. Smaller company leadership might be well served by measuring their companies to the Magnet Process as a way to improve their attractiveness to knowledgeable investors. Think about it, 15 years ago, who would have ever dreamed of Internet security companies? During President Hamilton's administration, there was a filibuster in Congress to close the U.S. Patent office. The argument was, "Now that everything has already been invented, why are we wasting ta xpayers' money?"With the advancement of communication and technologies, new discoveries are actually accelerating. Ironically, these breakthroughs usually do not come from the larger companies- they are too set in their ways. Investors truly looking for growth need to be involved with the innovative companies making these breakthroughs. And smaller companies need to concentrate on attracting astute investors. Jordan Kimmel is the Market Strategist at Brookstreet Securities Corporation, a national brokerage firm headquartered in Irvine, Calif., with more than 500 independent brokers and a member of NASD/ SIPC. Jordan manages a Brookstreet branch office in Randolph, N.J. Jordan is also the President and Portfolio Manager of the MagnetÂŽInvestment Group, LLC, managing private equity funds . www.magnetinvesting.com. www.valuerichonline.com
Bon Vivant, a luxurious and comfortab private villa, is nestled in a two-andhalf acre tropical garden in the renownt Sandy Lane Estates. Recognized by T. London Times as "one of the most gracio1 get-aways for the well-heeled", Bon Viva; is appointed for leisure and sports and staffed to serve your every need. Our chefs have been trained at the fme restaurants in America. Among them, l Bernardin, San Domenico, and WD-: in New York City, Tru in Chicago ar Lafitte's Landing at Bittersweet Plantatic in Louisiana.
To see more of this magnificent villa visit us on-line at www.bonvivantvilla.com or call 1-301-656-9400 today.
What makes a good company
••• GREAT?
By Lester Rosenkrantz
COMPANY A
COMPANYB
General Beverage Inc. (NASDAQ: "GBII") has been in the soft drink business for eight years. The company has a strong regional presence, asolid distribution base and a strong management team. Although GBII has historically grown organically, the company has hit a plateau despite being the first to market in the previously untapped and potentially lucrative niche of children's fortified soft drink.
Just down the block, Emerging Soft Drink Company (NASDAQ: "ESCX") is thriving. The company is a direct competitor of General Beverage; in fact, the two organizations are strikingly similar in the size and scope of their operations. In May, ESDX announced through a press release and information on its Web site that it had entered the children's fortified soft drink space and began almost immediately fielding calls from Wall Street industry analysts, institutional investors and the business press. Its common stock is now trading higher, continuing a steady 12-month advance since it retained its investor relations firm.
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There are many companies with good ideas, solid operations and strong revenue models. Unfortunately, a company that functions as a good business has no guarantees that its long-term growth will be of significant interest to investors. In the competi t ive and crowded public markets, simply running a solid business operation is not enough to be heard above the babble of 14,000 other public companies. A company's overall business strategy must include an active and forward -thinking quality investor relations program to attract sell-side research coverage and growing institutional ownership. Investor relations (IR) involves promoting the management and operations of a company to current shareholders, future investors and other financial constituencies. IR programs strive to communicate a company's vision and business opportunities, provide operational transparency, and convey management's co nfidence in a way that is understood by Wall Street. To deliver the company's messages, these programs include the use of tools such as user-friendly company Web sites, well-written press releases, intelligently scripted conference calls and clearly executed financial presentations. Small companies have a lot riding on their investor relations programs. Unlike their larger counterparts, small public companies cannot rely on huge advertising budgets, elaborate marketing campaigns or substantial financial news coverage to pique investor interest. To ma ximize public awareness and ownership, small entities rely heavily on financial communications to secure a market position for the company. Chemistry Is Critical A company 's investor communications program has a huge impact on its short- and long-term success, so it is important to get it right. Certainly, there are organizations that perform their entire investor relations function in-house; however, companies with limited capital and human resources will find that maintaining an IR department is a very expensive and unnecessary proposition. The better alternative for companies with www.vrexpo .net
If You Build It, There Is No Guarantee They Will Come! limited bandwidth is to have an internaiiR manager- perhaps the CFO- work closely with an outside firm that specializes in investor relations within its market sector. With the right IR firm in place, a company can navigate the demands of its current and future investor audience successfully. Conversely, a slap-dash IR effort has costly ramifications for the organization. Almost anyone can hang up a shingle and claim to have an investor relations shop. There are many firms out there, each with its unique method on how to approach the financial community. It is highly recom mended that you research several IR firms before making a decision. Ask for referrals from your board, current investors, lawyers and accountants- these individuals often come into contact with a variety of IR firms and should be able to make qualified recommendations. As is the case with most significant business decisions, the search for the "right" IR firm is a very personal one. Done correctly, the IR team becomes an extension of the company; therefore, the chemistry between the team and the company's senior management is paramount. After all, management has a responsibility to lead its company's investor relations program and ensure its success. The executive team that pursues a partnership with its IR team will ultimately be more successful in its financial communications than one that is satisfied with just a client-vendor relationship.
Although an IR firm handles some of the communication on behalf of the company, there is no substitute for direct contact between the leaders of a company and the investment community. In talking to the street, the chief executive officer and the chief financial officer- in fact, the entire senior management team- must take care to exude confidence (not arrogance) and articulate the goals and achievements of the business clearly. While the CEO will speak to the vi sion of the company, the CFO will need to be able to explain, and address questions about the company's financials. To the investor audience, a company's results are as important as its vision, leadership and integrity.
Is It Worth It? With Sarbanes-Oxley, Reg FD and othe r regulatory changes in place, the cost of being a public company today can add a minimum of $1 million a year to a company's overhead . Fees for exchange-listings and SEC filings, as well as for the production and distribution of interim and annual reports, press releases and other news to the financial community, auditors and legal counsel can add up quickly. A company that is investor-friendly and forthright in its dialogue with the financ ial community will be rewarded with respect from the Street. For a modest budget, a company can have an active stock marketing program that will not only raise its corporate profile among investors over time, but also potentially contribute significantly to improved market valuation. These relationships become incredibly important when it comes time to raise additional capital, as is the case with most growth companies. VR
Lester Rosenkrantz is the president of Cameron Associates, Inc. (www. cameronassoc.com), an investor relations firm focused on the micro cap marketplace. A Wall Street investment banker for many years, Lester has over 35 years of experience helping emerging growth companies reach out to public and private investor audiences. He can be reached at 2 72/ 245-8800 or lester@cameronassoc.com.
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2005 VALU ERICH MAGA ZINE 63
ValueRich Small-ca~ Financial Ex~o in Palm Beach, March 9-12, 2005
---~--
Expo
ows Attendees
Fr om the minute they walked onto the floor of the Palm Beach County Convention Center main hall, ValueRich Small-cap Financial Expo participants were surrounded by the excitement and d iversity of America's small-cap public companies.
Over 100 small-cap public companies and nearly 2,000 attendees gathered in Palm Beach from the farthest reaches of North America to showcase their products and join in a networking event that created incredible energy and generated outstanding results. Qualified investors, investment bankers and financial professionals flew in from Wall Street and around the globe to attend. By the end of the first full day, exhibitors were abuzz at the happy hour co-sponsored by Zap! and Bombay Sapphire- many of them clearly impressed by the number of quality connections they had made on the Expo floor. Chairman and CEO of Xtreme Beverage Network, Inc. (XSBV.OB) Ted Farnsworth commented: "Small-cap companies like ourselves have no exposure. This is one way that you get exposure, by being here with fellow peers and some other groups - everyone from investor relations people to attorneys to investment bankers. It was great-quality people that we found . We thought it was excellent:'
The unique ValueRich Expo format allowed small-cap companies to showcase their products with unrestricted access between company leaders and financial professionals.
This was the first time anyone had thrown a small-cap financial event expo style and it was also the first small-cap conference to combine business networking with financial presentations. Perhaps even more unusual, the ValueRich Expo was not hosted by an investment banking firm . ValueRich, Inc., a publishing and events company, is an industry-wide advocate for small-cap and micro-
cap companies. This flexible format attracted a broad mix of micro- and small-cap public companies and attendees. Many companies were able to bring their products into the hall and showcase them. The exhibits included everything from samples of energy drinks to a semi tractor-trailer housing virtual NASCAR racing simulators.
Energy was high on the Expo floor, featuring financial leaders like Archipelago, and small-caps like Abazias Diamonds and NuVim (left to right). 64 VA l UERI CH MAGAZI NE
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1
Our Inaugural Eventl
and Exhibitors
Photos provided by Maryanne Russell Photography, Inc., Kim Fontaine and ValueRich.
Michael McCrory, !-Bankers; Michael Rabinowitz, Maxim Group; Barry Ritholtz, Maxim Group; and Ed Dulles, !-Bankers give the Expo a thumbs-up. ZAP! (ZAPZ.OB) -the company's name is an acronym standing for Zero Air Pollution - brought an impressive display of electric scooters and cars, as well as the first Americanized Smart Cars . Throughout the conference exhibitors and attendees alike were zipping about the floor on Zappy3 electric scooters. Start-up micro-cap Magic Media
Networks, Inc. (MGCN .OB) brought its motor home-sized mobile studio to the floor and displayed its Destination Television products, including HoteiTV, GymTV and BarTV, to great advantage. Many other exhibiting public companies utilized their wood-paneled executive suites to demonstrate software and showcase working models of high-tech digital signs,
refrigeration technology and other unique products. Syndicated business broadcasters were on hand with plenty of visual material to film and over 100 public company CEOs to interview.
A Media Event The nationally syndicated business investment radio show, Steve Crowley's "American Scene;' was broadcast live from the Expo's main hall floor. Crowley interviewed exhibiting company CEOs during regular programming hours and banked a slew of interviews for future broadcasts. The expo format is clearly the best way for micro- and small-cap companies to attract investor, market and media attention. "It proved very, very successful for us;' said Gerald Bloch, consultant for Consolidated Energy, Inc. (CEIW.OB) "In fact, I don't know if we can 100 percent credit it to the convention, but our stock jumped the week after the convention from $3 .80 to $5.30. There were a lot of people at the convention that got very excited about our possibilities and our ventures into this marketplace. We think that the convention really helped expose us to a lot of market makers as well as investment people:' In fact, the main hall exposition was such a success that it caused one of the few disappointments ofthethree-day event: Relatively small numbers of attendees chose to leave the main hall activities to attend some of the financial presentations in the breakout conference rooms. Some presenting companies had sparse audiences. However, presenting companies which
StockWire.com had a steady stream of visitors. John Lane (middle) and other attendees had lots of hands-on time with company exhibits. www. vrexpo .net
SUMMER 2005 VALUERICH MAGAZINE 65
took ample opportunity on the exposition floor to invite attendees and promote their time slots, had excellent attendance at their presentations. Companies that came prepared with display materials and products to showcase and staffed their executive suite areas with outgoing personnel, had the greatest success in generating positive attention. By and large, small-cap public company and financial exhibitors were ecstatic with the connections they were making on the main floor. As Wing Yu, Chief Executive Officer of FinanciaiContent (FCON .OB), put it: "The ValueRich Expo represented an excellent opportunity for us to present products and se rvices to a very targeted and qualified audience. It also was the ideal venue to open dialogue with the investment banking community. Our efforts generated numerous leads, which will both help our top-line revenues as well as improve our corporate positioning on Wall Street:' The investment bank Ma xim Group, a platinum sponsor oft he event, was also quite happy, having generated a large number of quality leads. Maxim Group's director of sales and marketing, John Garrity, commented to ValueRich President Joseph Visconti: "I'm sure everyone is playing the Monday-morning quarterback and telling you how things could have been done better- you'll hear none of that from me. The attention to detail, the courteousness of the Value Rich staff, and the overall positive atmosphere of your conference made it a most enjoyable experience
for the Maxim Group team :' ValueRich magazine, the extensive ValueRichonline.com Web site and a direct marketing program that involved partnersh ips with industry heavyweights such as EDGAR Online, Bigdough and Business Wire proved very effective in bringing 124 public companies from as far away as Vancouver to the Palm Beach Expo.
determined. With proven concept firmly in hand, the Value Rich Small-cap Financial Expo will now be held at the center of the financial world September 14-1 S, 2005, at The Jacob K. Javits Center in New York City. Visconti and ValueRich will apply their well-developed marketing machine to bring this new event to Wall Street. Visconti has redesigned the breakout pre-
William R. Donaldson, CEO of Interactive Motorsports is interviewed on American Scene radio. On to Wall Street
Visconti was planning the next event, and going over measures to improve it, even as the Palm Beach show was coming to a close. The date and location had already been
sentation part of the Expo for the New York event, by bringing it inside the main hall, close to central entertainment and networking areas on two adjacent stages. Special attention will be paid to helping exhibiting public companies promote their presenta-
Edgar Online (left) demonstrated iâ&#x20AC;˘Metrix software. Paul Brown, M.D., Chairman of HearUSA gives a video interview (center). Advanced Spinal Technologies President Jeffery Perelman confers with Maxim Group's Michael Rabinowitz and Ross Mandell of Sky Capital (right). 66 VALUERIC H MAGAZI NE
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Energy Breeds Success George W. Bush impersonator John Morgan (below) had attendees laughing. Many connections were made during daily sponsored happy hour parties at the Bombay Sapphire Lounge (right and center). The Zap! girls pronounce the Expo a success as they prepare to open their display (bottom).
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The next ValueRich Small-cap Financial Expo will be held at the Javits Center, a few blocks from Wall Street in New York City.
t ions and make the most of the unfamiliar expo format. One of the pleasant surprises of the Palm Beach expo was the Expo Guide, in which each exhibiting public company was given a full-page profile. The pocket-sized publication emerged as an impressive reference book and was quickly in short supply, due to demand. The New York Expo Guide will be expand-
ed to include more show-related information on company profile pages and will add opportunities for companies to purchase "Company Connect" articles and full -color branding ads to tie in the themes oftheir displays. Of course, in order to accomplish this in a full-color print publication, firm editorial and advertising closing dates have been established, and companies are encouraged to register for the Expo as early as possible.
New York Expo Sponsorships Filling Fast
Platinum Sponsors:
All in all, the ValueRich Small-cap Financial Expo at the Javits Center in New York prom-
Edgar Online Onstream Media Cameron & Associates
68 VALUERICH MAGAZINE
• H.C. Wainwright & Co., Inc. • Intelligent Capital Solutions, LLC
• Emerging Growth Equities, LTD
MER 2005
company needs. ValueRich is initiating a Web-enabled process for public companies to submit their business plans detailing their financial needs. ValueRich will then source the information to associated banks that specialize in each type of requested financial service. Thus company officers and investment bankers will have the advantage of meeting face to face at the ValueRich Expo, with introductions and much of the due diligence process completed.
Gold Sponsors:
• Keating Investments, LLC
investment banking needs to investment banks that specialize in small-cap public
Early interest in the ValueRich Smallcap Financial Expo in New York has been strong. Available sponsorships and Bankers' Row slots are filling fast. At press-
Maxim Group, Inc.
• !-Bankers Securities, Inc.
Perhaps the most exciting addition to the ValueRich Expo in New York will be Bankers' Row- a single location where small-cap public company officers can shop their
Silver Sponsors: American Stock Exchange Vintage Filings Stockwire
ises to be even bigger and better than the last one. The expo-style event will showcase all of the excitement and energy of America's small-cap public companies and provide a unique business development and financial networking opportunity for all attending. For further information about products and services ValueRich provides for smallcap public companies, or the ValueRich Small-cap Financial Expo at the Javits Center in New York, September 14-15, 2005, visit www.vrexpo.net or call (561) 832-8878. R www. va luerich online .com
w NEW YORK TIMES SQUARE
Feel the energy as you make your way to theW New York Times Square, an oasis of calm in the midst of the flurry of a revitalized Times Square. From the moment you step inside, you will be transported to a Zenlike environment. Quiet colors, calming textures and a dramatic glass-encased waterfall that soothes the senses. Water runs overhead, streaming down on open sides, enabling you to literally "walk on water" as you enter the elevator that whisks you to Reception . It's easy to understand why Conde Nast Traveler put WTimes Square on its "Hot List of Hotels:'
VR Rate: Wonderful King $349 1567 Broadway at 47th Street, New York, New York 10036 Phone: 212.930.7400, Fa x: 212 .930.7500
swissotel THE
Hip and dysfunctional are out. Style and function are in . Le Parker Meridien 's 730 ergonomically inspired rooms and suites with far- reaching views of Central Park and the Manhattan Skyline, give you that "at ease" feeling as you step out in the big town. NORMA'S over-the-top breakfast was voted " Simp ly the best breakfast in New York" by the Zagat Survey 2001 . Seppi's neighborhood bistro is a little Soho in Midtown. High atop the hotel, the savvy Estrela Penthouse affords magnificent Central Park and Manhattan skyline views. Le Parker Meridien. Uptown. Not Uptight.
VR Rate: Superior $ 395 118 West 57th ST, New York NY 10019-3318 Tel : 212.245.5000, Fax: 212.307.1776 Toll Free: 800.543.4300
DRAKE
lHf ~HORfHRM
Swissotel The Drake, New York places you at one of Manhattan's most prestigious addresses : on Park Avenue at 56th Street. Ideally located, the 1927 landmark building is just a short walk to the City's
Stylish, Sleek & Sophisticated, Experience the Shoreham . In
NEW YORK
most fashionable shopping areas as well as the Midtown business district. Swissotel The Drake, New York provides all the necessities and luxuries to make the Hotel your home in Manhattan. Well appointed guest rooms include spacious suites, several with full terraces overlooking the Manhattan skyline. A great hotel, Q56 restaurant & cocktails and Paris' most upscale gourmet shop, Fauchon, await your arrival.
the heart of Midtown, on 55th between 5th and 6th. The Shoreham offers a truly customized ex perience with endless possibilities. Experience a complimentary drink upon arrival, 24-hour tea, coffee, cappuccino ' or espresso in the lobby, concierge services, high-speed wireless everywhere, down comforters and pillows with Belgian linens.
VR Rate: Queen Rooms $269 (normally $429) Suites $319 (normally $589) 33 West 55th Street, New York, NY 10019 Phone: 212-247-6700, Fax 212-765-9741 www.shorehamhotel.com
VR Rate: Superior King $339.00 440 Park Avenue, New York, NY 10022, USA Tel: 212.421.0900, Fax: 212.371.4190, 1.888.73.SWISS
For up-to-date information on the ValueRich Small-cap Financial Expo â&#x20AC;˘ New York, visit www.valuerlchonline.com. Contact hotels directly for reservations. Please remember to ask for the ValueRich Expo Rate. Rooms at the conference rate are limited, early reservations are recommended.
www.vrexpo. net
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VALUERICH MAGAZINE 69
Once
Mild· nne red
Financial eporter••• •IS now By Liza Grant Smith
With the launch of I·Metrix, EDGAR Online is the first to step up and actually embrace XBRL, a new global standard for financial reporting, providing greater transparency and a rich environment to efficiently access every line item t hat a company is likely to include in its financial statements. Have you ever had that dream where you show up to work naked? Ever since Sarbanes-Oxley made "transparency"the hot buzzword around Wall Street water coolers, Corporate America has been preparing to live the experience. Whether the thought of open enterprises inspires fear, frustration or freedom, the reality is that there is a chasm between where we are now and where we need to go. In pursuit of that end, many 72 VAlU ER ICH MAGAZIN E
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companies are looking for assistance from an old friend who's offering new benefits. EDGAR Online, Inc. (NASDAQ: EDGR), a leading provider of value-added business and financial information, has always positioned itself on the cutting edge of new technologies. This has never been more evident than with the release of its newest brainch ild, I·Metrix. The suite of products, launched in late April, enables users to access financial
data at an unprecedented level of transparency and marks a revolutionary advance in speed, accuracy, cost and convenience . Ready or not, the transparency revolution is here and EDGAR Online is equipped and eager to take its users along for the ride. They say behind every great initiative is a great acronym. In the shift towards transparency, the most critical is XBRL, or eXtensible Business Reporting Language, a newly www. valuerichonline.com
developed software code tailored for busi ness reporting . Despite XBRL's noble goals of allowing financial information to be more widely distributed and easily understood, some finance profess ionals are intimidated by the new crossroads of high tech and finance it represents . However, those will ing to look past its scary fac;:ade will find that XBRL is not unlike the elementary concept of bar code s. Just as bar codes can track a jar of pickles from the manufacturing plant to point of sale, XBRL tags financial data and tracks it from vendor interaction all the way to consolidated financial reports. Anyone involved in financial analysis understands and likely dreads the time consuming and error-prone act of re-keying financial data to move it from program to program . By affixing a tag to each piece of data, XBRL can compile data from a variety of sources and formats and enables developers to create programs capable of analyzing and manipulating financial data in new ways, without re-keying. The investment community stands firmly behind the initiative. In February 2005, the Secur ities & Exchange Commission announced it was ready to start accepting corporate financial reports using XBRL. Increasing support for the XBRL standard 's adoption is driven by growing demand for analytics, continuous auditing and real -time reporting by the investment community. The standard is ultimately expected to serve as the foundation for a new generation of financial web services with a positive impact on everyone from regulators to executives and analysts. For financial data providers, the development of XBRL has thrown down a gauntlet of sorts to gauge which companies are up to the challenge of meeting the business world 's evolving needs. With the launch of I·Metrix, EDGAR Online has established itself as the first competitor to resolutely step up and actually embrace the XBRL challenge. "XBRL has set a new, truly global standard for financial reporting by providing a structure and conte xt for every line item that a company is likely to include in its financial statements," says Deb Doane, VP of Marketing for EDGAR Online, Inc. "We have distinguished ourselves by being the first to adopt (XBRL) intern ally and map all of our www.vrexpo .net
. . CONNECT
·
Online® EDGR:NASDAQ EDGAR Online, Inc.
CONNECT
50 Washington Street, 9th Floor Norwalk, CT 06854 800-41 6-6651 www.edgaronline.com
Greg Adam s COO&CFO 203-852-5645 gadams@edgar-online.com
data to this global standard:' She is quick to point out the staggering impact ofXBRL. "The standard itself provides tremendous granularity in information;' says Doane. "The average vendor today probably
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provides somewhere in the vicinity of 100200 data points. By virtue of XBRL, users will have access to potentially more than 1,000 data points, a tenfold increase in data available, enabling people to see more minute trends:' By leveraging the power of XBRL, the Company's I·Metrix product solves the challenges oft he currently time-consuming, and error-prone process of information gathering by delivering a wealth of data directly into Microsoft Excel right after its submission to the SEC. Users are able to download data for multiple companies into one spreadsheet without leaving Excel. While it took days for
data to become available with traditional data providers, I·Metri x boasts data availability in the fastest turnaround time in the industry. Coverage is comprehensive, with data for over 12,000 companies including pink sheets, private companie s and ADR's. This blows by the traditional data provider's coverage which averages 8,000. Those concerned that the product 's breadth and speed come at a cost, either monetary or in accuracy, can rest easy. I·Metrix's price point is 20-25 % lower than competitive data providers and the product offers unparalleled accuracy by eliminating all cutting and pasting errors. Questions of line item accuracy are easily answered by clicking on the cell and being taken instantly back to the corresponding SEC source document. Knowing the varying needs of its target markets, I·Metrix Professional is available in three editions: Analyst, Corporate and Audit. Along with the latest tools, fundamental data and models, users can customize the product by building their own models and templates to accommodate any specific needs they may have. The launch of I·Metri x marks the cu lmination of a long and focused process for EDGAR Online. The Company was knee-deep in XBRL when it was still a rumbling and has been actively involved in the development of the standard as a charter member of XBRL.org, an international not-for-profit consortium of approximately 250 companies and agencies striving to build the XBRL language and promote and support its adoption. EDGAR Online worked hand-in-hand with the big 2005 VALUERICH MAGA ZINE 73
accounting firms to test the established t axonomies, which proved to be a laborious process due to the varying nomenclature of line items. For XBRL to be successful, it was necessary to create a "dictionary" of tags that
were the same for each company so comparisons could be made consistently from one financial statement to another. Simultaneous to the establishment of XBRL, the Company began to develop ways to leverage the revolutionary technology to meet the needs of the business community. Hence, the concept of I·Metrix was born and has since become the most significant product launch in the Company's history. The product has been the primary development focus of the staff for the past year and has required a significant capital investment. Management notes that it has taken considerable time and talent to create a parsing engine and the proprietary data mapping p rotocol necessary to return high - quality XBRL. However, they could not be more pleased with the ultimate product and the market seems to agree. Previewing of the data and software has generated a tremendous response and the Company expects the product line to result in significant reve nue growth and the attainment of company profitability in 2005. For industry veterans, EDGAR Online's position at the forefront of technological advancement is not surprising. The Company 74 Vl\lUERICH MI\GI\ZINE
2005
has historically established itself as a pioneer in effective methods of distributing intellectual information over the Internet and a leader in the movement to modernized financial info. Its flagship product, EDGAR Online Pro,
you really can develop products, services and tools to address those pains;' Doane says. "We have always been technologically savvy at EDGAR Online, being the first to recognize the power of the Internet as a delivery method . While other companies were requiring people to subscribe to proprietary services, we put information out there on the Internet. That was an indication of the Company's technological savvy and adaptability:' Also, it doesn't hurt to have an established name brand in a sometime tumultuous industry. "The EDGAR Online brand is certainly a valuable commodity because it is open ing doors for us;' boasts Doane. "We are not a newbie. We're an established company, celebrating our ten year anniversary in 2005. We were born in the dot-com era, have weathered all the storms and come out the other side stronger and more focused:' Not one to ever stand still, EDGAR Online continues to look forward . After the I·Metrix roll -out is complete, the Company plans to upgrade the Pro solution and currently has other classified products and initiatives under development. One thing is clear though,
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was a significant milestone in data access during the Internet explosion. Management attributes the Company's position as a successful innovator to watching industry trends and listening to its clients. "Once you create a relationship with your client base which enables you to feel their pain,
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I·Metrix marks a new dawn for the future of financial data and competitively threatens the business models of existing information providers. However, Management at EDGAR Online does not feel obligated to toot its own horn. As Doane says confidently, "I think I·Metrix will speak for itself '~ VR www.valuerichonline.com
Established 1965 Life, Disability & Long Term 4 Offices Care Products 38,000 Clients Full In-House Underwriting 60 Full-Time Professionals
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Bothell, Washingtonbased company, is taking the "good things come in small packages" concept to a whole new level as an emerging leader in the nanotechnology industry.
While the Company deals with the incredibly small, its innovative polymer materials and products and t heir potential applications have paradoxically proved immense and far-reaching. Tiny Technology
Understanding nanotechnology requires individuals to conside r far beyond the significant limitations of human sight. The term refers to the development of products and production processes at a scale smaller than 100 nanometers, with a nanometer equal to one-billionth of a meter. Bob Petcavich, Lumera's ChiefTechnology Officer, illuminates the concept more simply. "If you were to take a human hair and slice that hair along its diameter a thousand times;' he explains, "one piece of that would be a nano piece of hair." However, the key issue is not that scientists are working at this scale, it is that they are performing manipulations at the atomic level to create new forms of matter. At Lumera, these ultimately become the polymers used to develop products that can be used in a wide range of applications including electro-optical communications networks and biochemical analysis. The development of these proprietary products - using its polymer materials as tools or enablers to improve their design, performance and functionality - is one of the Company's key differentiating factors and strengths. Management suggests that offering product so lutions gives Lumera a firmer foothold in the market and may ultimately enable the Company to be more successful than competitors who essentially produce nanotech research samples. The CGQYPany 's t hree primary product sectors illustrate the variety of applications for its proprietary materials. Biotechnology Disposables
Current methods of protein analysis focus on how the amount and nature of proteins change over time, disease and treatment. This expression profiling, as it is called, while important, has significant limitations and does nothing to answer the critical questions of what is binding, how much is binding, how fast and to what it is binding. The genome, t h e genetic code that www.vrexpo .net
. . CONNECT
lumera LMRA:NASDAQ Lumera Corporation 19910 N.Creek Parkway Bothell, WA 98011 www.lumera.com
defines so many aspects of a given organism is now sequenced. Though much is left to be understood about the genetic basis of disease, many genes, the functional blocks within the genome, have been identified and characterized . But, the products of genes, proteins, collectively called the proteome, are not at all well understood. While methods exist to study individual proteins, their role in disease and the compounds or
CONNECT Tom Mino, CEO 425-398-6540 TMino@lumera.com
segments that seek and value the kind of information that Proteomic Processing provides are quite large with great diversity of interests, location, funding and motivations. They include basic life science research, such as that which is done at government institutes, universities and private foundations. Also very much involved in this type of work are clinical research groups located in hospitals, institutes and government facilities . Perhaps the most motivated by financial leverage are the companies and contractors that make up the drug discovery industry. Each day a new drug requires to come to market is estimated to cost $1,000,000. Anything that reduces that time is easily and highly valued . Electro-Optical Devices
Lumera electro-optic modulator chip
drugs that may be used to modulate their actions, there are very few ways to study all or any significant portion of the proteins of any given organism. The technology that Lumera brings to the market called Proteome ProcessingTM can do this. Lumera's NanocaptureTM Arrays are disposable biochips, fabricated with a hydrophobic polymer coating, that provide biologists with a cost-effective alternative for isolating DNA and protein samples for testing. The market
The Company's electro-optic devices convert data from electric signals into optical signals for use in communications system and optical interconnects for highspeed data transfer. Lumera's polymer-based modulators offer higher bandwidth, lower driving voltages, are lighter weight, and have lower fabrication costs than traditional switching technology based on inorganic material. Copper interconnects are currently being used to enable the communication of different logic units, for example, the chips found on the circuit boards of a computer. Optical interconnects offer the promise of decreasing interconnect delays and providing higher bandwidth to keep pace with transistor speed improvements, while potentially lowering power consumption and resistance to 2005 VALUERICH MAGAZINE 77
electro-magnetic interference. For example, the ability to use lower power consumption could mean eliminating the problem of overheating in laptop computers while simultaneously offering faster computing speeds. Lumera currently has 26 patents and patent applications related to electro-optic chromophores and polymers, devices, and fabrication processes. This intellectual property is augmented by a variety of critical trade secrets that form a formidable barrier to entry for competitors. Wireless Antennas & Systems In November of 2004, Lumera re-defined its wireless antenna sector strategy to focus entirely on smart antennas for customer specific applications. The absence of moving parts in Lumera's smart antennas improves its accuracy and durability compared to traditional antennas that have historically utilized mechanical beam steering. To Market, To Market In some circles, nanotechnology is con sidered the biggest of all the next big things and Lumera had a positive experience with their market debut. Born a subsidiary of Microvision who remains a significant shareholder, Lumera became a separate company
BREAKING NEWS At press time, Lumera announced that it received an order from defense contractor Raytheon Co. for high performance electro-optic modulators. Financial details of the order were not disclosed, but Lumera said that the modulators ordered from Raytheon operate in the 10 to 100 gigahertz range. Lumera announced a new patent that will help the company mass produce its electro-optical devices with enhanced waveguide performance to reduce optical loss.
in conjunction with their 2004 IPO. The IPO raised $41.7 million for the Company. This capital built on previously raised funds of $24 million, including $8 million from Cisco Systems. Impressively, total funding to-date has reached $68 million. Now the Company is facing an all-new market entrance with even greater implications for its future. After years of research and development work, Lumera has successfully transitioned from a development company to a product company. While the shift is daunting, Lumera's CEO Tom Mino feels it illustrates the competitive strength of the Company. "There are a lot of great nanotechnology companies working on great things, but they're not going to get results for two or three years;' he says. "We've been working on this for two or three years already with
Lumera electro-optic modulator
78 VALUERICH MAGAZINE
2005
a focus on the marketplace and I think that helps us have an advantage over other nanotechnology companies:' Mino and his Lumera team welcome the opportunities afforded by, not to mention the revenue generated by, the move to commercial markets. Analysts may cite predicted market growth in the Company's product segments, their strategic research agreement with the University of Washington or Lumera's proprietary product portfolio as key indicators of future success, but Mino believes it is more basic. "I have a group of people that not only have great minds, they have great hearts;' he says. "And, in addition to that, they're all very competitive and strive to be successful in everything they do. That's why I have so much confidence:' Mino knows that the Company's fledgling year of commercial sales is the first in several steps towards profitability, however he doesn't let that cloud his overall vision of Company success. "We're going to measure success, number one, by establishing a revenue stream this year," Mino says. "Number two is profitability. But, probably most importantly, number three is becoming a company that has high values and is widely respected by its customers, its investors and its employees. If we have all that, we will be successful:' Whatever the reason, Lumera Corporation seems poised for breakout achievements and performance. And maybe that's not surprising for a Company who has always had, literally, the world at its fingertips. VR www.valuerichonline .com
What do 78o/oof Fortune 100 CEOs and CFOs have in common?
They all use Onstream Meclia•s Executive Webcasting Services Onstream Media Corporation [NASDAQ: ONSM] is a digital media service provider that specializes in video and rich media communication , webcasting and digital asset management services. Onstream Media provides companies such as the NFL, PBS, Citibank, Thomson/CCBN and PR Newswire with the ability to easily manage their rich media content and broadcast information globally over the internet. "Thomson Financial has been working with Onstream Media in the areas of webcasting and live event production for over three years and we continue to find their operational expertise and customer service to be industry leading .... the outstanding service they provide enables us to bring our services to market more quickly and efficiently." Dan Vene - Senior Vice President, Thomson Financial
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80 VALUERICH MAGAZINE
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Anyone who has ever received a package that looks as if it was used in an impromptu soccer demonstration knows that successful shipping isn't just about getting things there on time, it's also about their condition upon delivery. It's true for a batch of Grandma's oatmeal ra isin cookies, but when the package contains biological materials, the concept of"handle with care" needs to be taken to a whole different level. Temperature-sensitive biological materials require specific conditions to maintain their viability during shipping. Currently, the pharmaceutical and biotech markets primarily utilize dry ice packaging equipment to serve these needs. The results achieved when using dry ice as a shipping and preserving medium are far from groundbreaking, but despite being both inadequate and inefficient, this type of packaging remains the ubiquitous standard. So, what do you do when the standard is faulty? If you are cryogenic innovator CryoPort, Inc. (Ticker: CYRX), you set out to redefine the standard. Scheduled to officially debut later this year, the Company's new one-way low-temperature cryogenic shipper, which can be thought of as a cryogenic Fed Ex box of sorts, is poised to revolution ize the pharmaceutical packing industry and vault CryoPort past both its dry ice and cryogenic competitors. The effectiveness of a product is often determined by how it answers several key questions. In the case of shipping containers for temperature-sensitive biological materials, these questions center around how reliably a shipper can maintain the appropriate temperature and for what period of time. When is cold not cold enough?
Despite an unbelievably low tempera ture of -78°C, dry ice is still not cold enough to reach cryogenic temperature standards of less than -150°C. Therefore, shipping or preserving specimens in dry ice limits their viability to 40-60 percent under ideal conditions. This loss of viability ultimately costs the pharmaceutical and biotech markets hundreds of millions of dollars per year as a result of a delayed time to market for drugs in clinical trials and an increase in the num-
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. . CONNECT
•
CYRX:NASDAQ
COMPANY
CONNECT
CryoPort, Inc. 451 Atla s Street Brea, CA 92821 Ph: 714-256-6100 www.cryoport.com
Dante Panella, Investor Relation s Ph: 407-656-9600 x 107 dpanella@firstcapitalinvestors.com First Capital Investors, Inc. www.firstcapitalinvestors.com
ber of patients per trial. Even in situations where a cryogenic temperature is not required, the use of dry ice can be ineffective due to the nature of the substance. Manufactured in blocks, dry ice is heavy and, more detrimentally, sublimes back to a gas in about 48 hours. Therefore,
CryoPort is finalizing its development of a one-way low-temperature cryogenic shipper - an innovative concept in the industry. there is a limited time to ship before having to re-ice, which is why many companies utilizing dry ice will ship only on Monday, Tuesday or Wednesday. In addition, void spaces in the dry ice immediately upon shipment mean that the specimen is not really holding dry ice temperatures and thus has a greater chance of deterioration. Cryogen liquid nitrogen shippers provide an attractive alternative to dry ice. In addition to achieving cryogenic temperatures, the shippers offer reliable temperature maintenance over a period of 10-15 days. The use and benefits of cryogenic temperatures for biological material storage and shipping have been well established and commercialized over the past 50 years. What is new, however, is the current focus of Brea, California-based CryoPort, Inc.
Saving Cold Hard Cash Cryogenic shippers on the market today are intended for multiple uses over a period of years and are therefore manufactured from substantial and expensive materials such as stainless steel or aluminum. CryoPort is finalizing its development of a one-way low-temperature cryogenic shipper- an innovative concept in the industry. The product could revolutionize the way industries deliver drugs to the market and handle specimens in clinical trials as a result of its highly efficient design, proprietary technology, ease of use and significant user cost savings. In the words of President and CEO Peter Berry, CryoPort is "simply bringing the technology of cryogenics to low-cost effective packaging :' While the concept may be simple, the execution of the idea is far more complex. The development of its one-way shipper required CryoPort to do considerable work on unconventional materials of construction, such as molded metals and plastic polymers, not typically used in the cryogenic world. Manufacturing also presented a challenge. Cryogenic manufacturers of the reusable products typically build 40,000to 50,000 units a year, in batches. CryoPort's one-way shippers require mass manufacturing more along the lines of 50,000 units a month. This shift to a mass manufacturing process, coupled with the intense anticipated demand, led CryoPort management to make a strategic decision. "We fully understand that we cannot keep
SUM
2005 VALUERICH MAGAZINE 81
up with the demand as this market develops as a single company;' says Berry. "We believe the way to dominate the space and set the new standard in the industry is by selecting manufacturing license partners:' By licensing manufacturing, CryoPort can expand rapidly. The company has already chosen two partners for production later this year and early next year. The first, one of the largest dry ice manufacturing compahies in t he industry, was drawn to CryoPort due to t he inevitability of cryogenic shippers invading the dry ice space. By partnering with
CryoPort, the company can offer a complete product array in the segment of temperature-sensitive material shipping. The second partner is a cryogenic company in Europe. With its ability to manufacture other cryo-
The estimated potential market opportunity for CryoPort's one-way shipper totals $3.3 billion.
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genic equipment and deliver liquid nitrogen worldwide, this company brings to the table additional value related to other customer needs. Using only the pharmaceutical and biotech industries as a benchmark, the estimated potential market opportunity for CryoPort's one-way shipper totals $3.3 billion. Currently, 99.5 percent of these markets are served by inefficient and expensive dry ice products. CryoPort has initially chosen to target biotech companies, specifically those in life stage clinical trials with materials that need to be cryopreserved . Berry calls it a sea-level approach. "Instead of selling to the endusers, the millions and millions and people in laboratories around the world, we want a very targeted, specific approach;' he says. "It isn't just about the customer shipper, but about all the other costs the industry tolerates today. We feel [the product] is a very well -packaged economic sale. That's why we're focusing on the top of these companies:' With no competitors currently targeting the one-way shipping niche, CryoPort sits in an enviable position. Established cryogenic equipment manufacturers remain focused on the traditional reproduction and cryobiology markets, while dry ice equipment manufacturers lack cryogenic manufacturing capacity. Both competitors, in turn, lack mass manufacturing experience and current practice. Because of their work in ultimate material selection and mass manufacturing capabilities achieved through select partners, management believes that CryoPort will be able to secure an early leadership position and has a jump of a year or two on any potential market segment entrants. With a minimum of20 million frozen shipments made per year worldwide - an average of 76,900 per business day- CryoPort's new one-way shipper promises to be not only a revenue boon for the Company but also an opportunity for many of the major pharmaceutical and biotech companies to secure a more competitive market position through reduced costs . With such an attractive package, it isn't likely that many of CryoPort's potential customers will have cold feet. V R www.valuerichonline.com
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By Liza Grant Smith For many biomed industry players, bringing a medical device to market signifies the end of a long process that entailed tremendous R&D hours and dollars. Their initial "eureka " moment ultimately led to this final juncture, where the device is introduced to the industry it was intended to revolutionize. However, as these companies pack up their microscopes and move on to the next big th ing, another company's innovation is just beginning. Biophan Technologies, Inc. (OTC: BIPH) has become a world and industry 84 VALUERICH MAGAZIN E
2005
leader, not in making medical devices, but in making them better. The Company develops and markets cutting-edge technologies designed to make biomedical devices both safe and compatible with magnetic resonance imagining (MRI) . With a total of 108 patents issued or pending, an extraordinary management and scientific team, and development contracts with NASA and Boston Scientific, Biophan is proving that medical device developers aren't the only innovators able to garner
headlines. The Importance of Compatibility
Compatibility issues seem inherent in all technological advancements, but perhaps no incompatibility problem is as critical or detrimental as those associated with medical devices, where human life is involved . Of primary interest to Biophan is the statistic that over $12 billion worth of medical devices shipped annually are not safe for use with MRI and/ or are not imageable. Due to www. valuerichonline.com
safety concerns including heating of devices . . CONNECT and metal wire leads which can cause tissue damage, most MRI imaging centers currently refuse patients with pacemakers and other implanted medical devices, meaning they \~ are denied access to one of the most important diagnostic tools in medicine. Rather than accepting this as an unavoidBIPH :OTCBB able limitation of the technology, Biophan set out to solve the problem. The Company Biophan Technologies, Inc. CONNECT ultimately developed shielding solutions 150 Lucius Gordon Drive, Ste 215 Michael L . Weiner, CEO that can be used to minimize the problems West Henrietta, NY 14586 585-214-2441 caused when MRI electromagnetic fields www.biophan.com interact with interventional and implanted medical devices. Along with pacemakers, this includes Biophan's new capability to lion and growing. allow MRI-guided surgical devices in which comes to maintaining the impressive value One of the biggest achievements for the the Company uses its "anti-antenna" design of its intellectual assets. The Company 's Company in the past year was the establishsolutions to create medical device leads, portfolio includes a total of 108 U.S. patents catheters and guide wires that can be safely ment of its new Nanolution division, intendissued, owned or licensed, which marks a ed to focus on the $40 billion drug-elution used in MRI-guided surgery. near doubling from a mere year ago, plus and drug-delivery market. By leveraging The expansion of Biophan's product and many pending international patents. 33 U.S. Biophan's expertise in nanoengineering and technology initiatives past this original dispatents have already issued. covery is a result of a seren"These patent issuances dipitous ripple effect. While continue Biophan's growth the shielding solution for and business strategy to implants was non-nanotech, develop a base of protected the Company discovered intellectual property in key that its tunable magnetic medical areas," said Michael Weiner, CEO of Biophan. "The nanoparticles, developed by partner Nanoset LLC, made broad coverage that Biophan has been diligent in obtainimplants easier to see in an MRI. This additional bening also makes it attractive to efit opened an even bigger c our customers to consider an world of possibilities for the {exclusive license for certain Company. Management esti~ fields of strategic interest to ~them, because they realize mates that while the revenue of devices that can benefit ~ that our broad patent position will allow them to defend from making implants safe ~their exclusive position in for MRI machines may be ___......._......,__,.' - - - - ' ..S"' market segments important a $4-5 billion opportunity, Vena Cava Filters without (left) and with (right) Biophan technology, which to them :' the market for making other allows a simulated thrombotic specimen to be visible under MRI conditions. Not content to rely only on devices, such as stents, as in-house development, Biophan is wil ling to its proprietary Nanoset nanomagnetic parwell as surgical instruments, visible with the ticle technology, the division is developing acquire patents and intellectual property for nanoparticle coating could total close to $8 solutions that facilitate the creation of active technology that complement and strengthbillion . en its portfolio. One example of this is the drug-delivery products. Attaching nanoThe applications for Biophan's nanomagmagnetic particles to drugs, the Company Company 's nano-technology enabled bionetic particle technology do not stop there. can cause them to be non-active until a spethermal batteries. In 2004, Biophan acquired Again with partner Nanoset, the Company cific electromagnetic field is applied thus a majority interest in TE-Bio, patent holder is adapting the technology to form advanactivating the drug or, in other applications, for batteries that use body heat to generate taged contrast agents for MRI which are releasing it so it can elute into the bloodelectricity for implanted medical devices. brighter and longer lasting. With contrast Whether through development or acquisistream. agents used in approximately one in four Biophan has an aggressive stance when it tion, the end result is a formidable gathering MRI procedures, the market is over $800 mil-
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2005 VALUERICH MAGAZINE 85
of intellectual property and a suite of unique and proprietary nano-tech products. Name Dropping
For those skeptical or merely confused about the far-reaching implications of nanomagnetic particles, Biophan offers a stellar line-up of scientists and management that can lend credibility to the strength of the Company's developments. Led by CEO Michael Weiner, the makeup and credentials of the Board of Directors and Advisory Board is staggering. The boards' members include a Nobel Prize winner, a recipient of the National Medal of Technology from President Clinton, a board member of the Federal Reserve Bank of New York, a dean of a university's engineering and applied science school, a chairman of a university's medical center, and professors of surgery and radiology from renowned medical centers among others. The interest and dedication of these accomplished individuals speaks volumes about the worth and value of Biophan's intellectual assets under development. Biophan's impressive relationships extend to its strategic partnerships. In 2004, the Company announced that its TE-Bio thermo-
86 VALUERICH MAGAZINE
2005
of life and lower healthcare costs. The NASA partnership came less than a year after the Company announced its joint development agreement with Boston Scientific Corporation to make medical devices more compatible with MRI tech nology. That relationship has expanded to involve other products. Leveraging cooperative development relationships remains pivotal to Biophan's business strategy and assists the Company in c sales channels, technology and by generat.[ ing higher visibility the market and investor ~ communities. Management anticipates that ~the continued success and achievement will ~ only improve upcoming discussions with potential strategic partners. ~ Medical device developers have histori.f cally been considered heroes of the bioBiophan coated wires 1 and 2 are visible under medical revolution, heralded for the prodMRI while uncoated wire 3 is nearly invisible. ucts they create . However, equal fanfare electric battery subsidiary had entered into a pact with the National Aeronautic and Space Administration (NASA) for characterization and joint development of high-density,
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nanoengineered thermoelectric materials for use with implantable medical devices. By combining Biophan's innovative power solution with NASA's thermoelectric materials expertise and leading nanotechnol ogy development, the partnership has the potential to greatly improve patient quality
has begun to greet companies like Biophan Technologies, who realize that the revolution is far from over when the products hit the market. Given the extraordinary brain trust and intellectual property the Company has in its corner, it can be argued that the new hero worship is well-deserved. VR
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ONLINE POKER
Online gambling, particularly poker, has been around since the late 1990s but did not really take off until a couple of years ago when amateur on line poker player Chris Moneymaker won the nationally televised World Series of Poker and walked away with $2.5 million in winnings. At that point, many amateur players went online to see if they, too, might be the next big winner. And thus an industry was born. Today, estimates put the number of online poker players at close to two million- a figure that seems to be growing faster every day with no signs of slowing down, particularly when one notes that there are an estimated 100 million poker players worldwide. Tapping into this new industry are more than 200 major online gambling companies that have sprung up to pursue a share of this multibillion-dollar phenomenon. Seeing Gold Online One company is AngeiCiti Entertainment Inc. (AGCI.OB), an online casino software licensor that has been publicly traded on the bulletin boards since January 2002. AngeiCiti is a Nevada corporation and holding company for Worldwide Management, a corporation that operates under Costa Rican license in that country as well as on the Kahnawake Indian Reservation near Montreal. AngeiCiti 's current market capitalization is approximately $6.5 million, based on its recent stock price of one dollar for each of 6.5 million outstanding and issued shares. Shares being held as collateral, worth $26.5 million, were retired in May. Company Founder Larry Hartm an heads AngeiCiti , along with George Guti errez, President, and Dean Ward, CFO. All have shareholder stakes in the company. With
AGCI :OTC.OB AngeiCiti Entertainment, Inc. 1109 North Federal Highway Fort Lauderdale, FL 33304 www.angelciti.com
AngeiCiti E n t e r t a i nrnent
CONNECT George Gutierrez President 800-908-957 4
backgrounds in international law and finance, they have created what they believe is a high-growth, high-profit company in a market that many people expect to double within the next two to three years. AngeiCiti's goals are aggressive. Near-term, according to Hartman, they would like to be listed on the big boards. And not too much farther out, he says, "We would like to have created a synergistic company with online and landbased casinos, making ourselves attractive as a merger opportunity:' The recent announcement that they have entered into a LetteroflntenttoacquireCarib Gaming, the largest land-based casino company on the Turks and Caicos Islands, is key to this strategy. While this is the company's first foray into the bricks and mortar side of gambling, Hartman says:"Carib presented us with an opportunity to buy at less than three times earnings. They are mostly a 'Mom and Pop' type of company with a cash flow net of $1.4 million, and they want liquidity:' Carib's revenues are projected to be in excess of $3
million in 2005. The merger is expected to close by mid-summer. Aiming for the Big Exchanges "Moving to a major national exchange is the next logical step for our company," says AngeiCiti 's president, Gutierrez. Announcing the Carib Gaming deal, he said, "As we meet the shareholders' equity and market valuation requirements set by the NASDAQ and AMEX, this move will fuel the future growth of the company, enhance shareholder value and increase our liquidity and visibility:' Moving to the bigger exchanges is a path that other online companies are also taking . For example, PartyGaming, the parent company of PartyPoker.com, an indu stry leader with claims to more than 50 percent of the market, is exploring the possibility of going public at a valuation reported to be close to $5 billion. Many online operators remain privately held, partly because the industry is so new, but also because many of the laws, particularly in the U.S., prohibit online gambling.
U.S. Legal Issues Remain Murky for Online Gambling Companies such as AngeiCiti face a perplexing issue in the U.S:s 1961 Wire Act, which makes it illegal to use telephone lines to place a bet or wager. While the Justice Department claims the Act includes Internet gambling, it has yet to strictly enforce the law. The Bush administration asserts that Internet gambling is illegal. A few current legal proceedings clarify the scope of the Wire Act, but so far rulings have been inconclusive. Legislation to enforce Internet gambling laws has been stuck in Congress for years. It is also highly unlikely that the Act will be modified to formally permit online gambling. Consequently, most online gambling
www.vrexpo .net
companies have offshore operations in the 85 locales that permit it. AngeiCiti's operations are based in Costa Rica, along with Paradise Poker, PokerStars and others. PartyPoker is based in India. The climate abroad is more favorable. The UK has passed laws making it a regulated business. Other European countries are courting online gambling and looking at doing the same thing . The WTO recently ruled in a case filed by Antigua that the U.S. is within its rights to restrict remote gambling, but has applied restrictions inconsistently because rules vary from state to state. The ruling's impact on online gambling remains inconclusive.
SUM
2005 VALUERICH MAGAZINE 89
That is why most of these companies have their operations offshore. Double Revenue Growth
AngeiCiti generates revenue by operating online casinos from its base in Costa Rica . The company currently has negative cash flow, due mostly to aggressively pursuing investment opportunities and "burning through a lot of capital;' says Hartman, to get it s online poker up and operating . "It's the old adage that you have to spend money to make money;' explains Hartman. Hartman predicts that revenue for AngeiCiti, with the addition of Carib Gaming, will grow from $3 million in 2005, with a profit of $1.25 million, to $6.5 million and a profit of $2.2 mill ion in 2006. Going forward, the landbased Carib Gaming operation is expected to generate steady cash flow. From there, they can pursue other strategic investment opportunities. AngeiCiti 's Casinos work just like any land-based casino in Las Vegas or Atlantic City. They offer standard games including blackjack, roulette, craps, slot machines, and Caribbean and various poker games, among many others. They advertise the same odds that would be expected in a live casino. Players simply sign up on the Web site, deposit money into an account and begin playing. AngeiCiti operates the online gambling Web sites using software technology provided by Real Time Gaming. An operator, such i3S AngeiCiti, typically receives a 2 percent to 5 percent take of the winnings along with an entry fee for each participant, which generally ranges from three to five dollars. In a large tournament there is a higher entry fee and a larger take (close to 10 percent), potentially amounting to more than $500,000. From its inception in May 2002 through September 30, 2004, AngeiCiti claims more than 156,000 downloads of its software and more than 58,000 registered players. While most of their business has been online, they see a blend of online and landbased gambling as being very compatible. 90 VALUERICH MAGAZINE
2005
For example, says Hartman, they would like to be able to offer incentives to their landbased customers to use their online operations and vice versa. Online Poker Operations Spun Off
In July 2004, AngeiCiti spun off its online poker operations to Midas Entertainment, Inc. with an approximate 15 percent stake in the company. "We did this so that we could focus on our core operations;' says Hartman. Midas' wholly owned subsidiary, Creative Millennium Ventures, provides gaming software to online poker sites, including CityPoker.com, KingMidasPoker.com, DesertPoker.com and SharkPoker.com.
Stratospheric Growth
Real numbers on the growth of online gambling are hard to come by. The industry is still run mostly by privately held companies, and new players and companies are jumping on board at a dizzyingly fast pace, but the growth in the industry appears to be staggering. According to Hartman, the increase in online poker grew by more than 1,000 percent in the past 12 to 18 months. He says the online casino market grew at a more steady, but still impressive, 20 percent rate per annum. Estimates of worldwide revenues for the online gambling industry in the next two to three years range from $5 billion to $10 billion. According to a recent Barron's article, more than 200 online poker sites collectively are generating about $2 billion a year in revenues, equal to 40 percent of last year's gam~ bling revenues from all of the ~ Las Vegas "Strip." Meanwhile, fg, an estimated 1.7 million poker l'l :c players are active online and ~ c about 150,000 people play on "'E ~ an average day, according to c5 industry-tracking PokerPulse. ~c com, and 70 percent to 80 per~ cent of all online players are
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In its first six months of operation, Midas announced that it had taken in more than $3.5 million in deposits, processed in excess of $45.2 million in bets and earned more than $937,000 in rake (operator's percentage take). The company also has more than $1.5 million in cash as it plans for further nearterm expansion. AngeiCiti owns 3.6 million shares in Midas (MDAS.PK) valued at nearly $30 million based on recent trading. But that figure is discounted, according to Hartman, since the shares are restricted stock and harder to sell in blocks. This, says Hartman, makes AngeiCiti's market capitalization of $6.5 mi llion "ridiculously undervalued" and is why they are aiming to get onto the big boards, where their value will be better appreciated.
Grooming Themselves fora Merger
For now Hartman is taking advantage of this growth and is focusing on maximizing his company's value by concentrating on its core business, gaining shareholder value, and making AngeiCiti an attractive merger target a few years down the road. As for what type of company might be interested in AngeiCiti, Hartman says "a few years ago, I would only have imagined a buyout by a bricks and mortar candidate. However, with the influx of numerous publicly traded online gaming companies, I would say that such a buyout could go either way at this juncture:' In the meantime, online gambling shows no signs of slowing its march into the mainstream, and AngeiCiti is focusing on getting its share of that business. VR www.valuericho nline .com
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By Liza Grant Smith
It can be said that one of man's greatest assets is his ability to adapt to a changing environment. There is no greater tool in that adaptation than evolving technology. Today's society is awash with innovations that address our growing desire to minimize effort and eliminate wasted time. We conduct business on our Blackberries while riding the subway. We shop at home in our pajamas over the Internet. Even the task of sucking on a mint has been replaced by a st rip that instantly dissolves on our tongues. Americans take pride in how proactively we identify and develop solutions to today's problems . This is why the events of 9/ 11 were so devastating: We failed to recognize the problems related to what should be our primary concern - safety. We simply were not equipped to face the new reality of terrorism . Developing technology to help us adapt to this change in environment is not a luxury, but a critical imperative. Guardian Technologies International Co. (OTCBB : GDTI), a developer of advanced ima ge analysis technologies for both the ho meland security and health-care radiology markets, has taken on this challenge. Guardian's unparalleled PinPoint threat identi fi cation and detection alert system stands not only to restore efficiency to air travel but, more importantly, to re-establish the guarantee of safety and our sense of security. Currently, baggage-scanning equipment ut ilizes 25-year-old X-ray technology with minimal image analysis capacity. Screeners are expected to associate certain colors in an image with specific types of threat items. Unfortunately, the X-ray images produced often do not offer enough differentiation between threat and non-threat items to capt ure an operator 's attention . The potential for human error in this system leads to a significant number of needless "false positive" physical searches and, more detrimentally, the possibility that a threat item could pass through the security point undetected. Guardian Technologies' recently introduced PinPoint system , which combines software and artificial intelligence, acts as a "second set of eyes" to dramatically enhance 92 VALUERICH MAGAZINE
2005
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PinPoint scans for characteristics of threat items and places a red box around the image.
the ability of existing baggage and package scanning equipment to identify explosives, guns and other threat items. Using computer analysis and sophisticated algorithms, PinPoint scans images for characteristics of items on a threat list. When a threat is detected, Pinpoint immediately places a red box around the image of the suspected threat item and sends a message to the operator stating the type of threat item found . According to Robert Dishaw, president and chief operating officer of Guardian, "PinPoint is to images what night vision goggles are to the military for night battles:' Explosives and other threat items have specific densities and characteristics similar to those of non-threat items. The parallel analytics of PinPoint can distinguish minute variations in X-ray images that are impossible for the human eye to differentiate. The result is an accuracy rate of up to 90 percent, more than twice the rate of existing scanning systems. PinPoint also boasts an unrivaled minimal "false positive" rate of less than 10 percent, compared with 30 percent to 60 percent for traditional scanning. "What differentiates PinPoint from other technologies," says Dishaw, "is the 'out of the
box' approach management deployed in developing our 'intelligent imaging informatics' (3i) engine that applies across numerous image spectrums and formats. PinPoint is the first technology that has provided a high degree of accuracy for detecting explosives with a low 'false positive' rate:' By significantly reducing the potential for human error, PinPoint effectively improves overall air travel safety. Additionally, the innovative technology promises to have beneficial impacts on security overhead costs and passenger/ baggage throughput. Slashing Costs with Accuracy and Speed
Approximately 1 billion bags are screened at U.S. airports annually. With "false positive" rates in excess of 30 percent due to the limitations of current technology, hundreds of thousands of bags must be hand-searched each day. This increases flight and passenger delays and has resulted in an average wait time per passenger of 10 minutes. Current TSA rules require human screeners to view each bag 's X-ray image for a minimum of five seconds, even when they are certain no threat item is present. Use of the highly accurate, sub-second threat www. valuerichonline .com
identification of PinPoint could enable the TSA to reduce the viewing time required for each image to as little as 1.5 seconds. Subsequently, the airline industry's baggage throughput rate could effectively triple. By leveraging the PinPoint system, highvolume airports, which typically service 65,000 airline passengers on an average day, could potentially save 55 man-hours of luggage screening time daily. This is the equivalent of seven eight-hour shifts per day and would mean a significant reduction in overhead costs. With 56,000 baggage screeners employed in the U.S., the potential for savings in the airline industry is astounding. Due to its compatibility with all existing baggage scanners currently in use, PinPoint offers an attractive option for airports seeking to minimize the capital expenditures necessary to meet increased safety standards. "The PinPoint technology can be mounted in the existing baggage scanners;' says Dishaw. "Thus, it leverages the existing investment that airports and the TSA have made in equipment:' To secure its competitive position, Guardian is in the process of filing two utility patents with over 100 total claims and a third provisional patent with eleven utility patents and potentially in excess of 200 claims. There are currently more than 6,000 carryon and baggage check scanner machines at the 440 commercial airports in the U.S. The potential international airport opportunity is roughly four times this number. These facts, coupled with the lack of effective threat item detection solutions, means the market for PinPoint is immense. Guardian is also adapting PinPoint for additional applications such as cargo scanning, body scanning, money laundering detection, illegal drug detection and, on the health-care side, for diagnostic/ analysis processes associated with radiology images.
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~Guardian ~ TECHNOLOGIES
GDTI:OTCBB
Guardian Technologies International, Inc. 516 Herndon Parkway Herndon, VA 20170 703-464-5495 www.guardiantechintl.com
grated Web-based solution that improves patient flow, [allows] optimization of all Xray, CT and MRI equipment, provides physicians a simpler workflow, improves patient safety, and lowers overall patient costs:' With FlowPoint, patient data, radiology images and other critical health-care information are instantly accessible from any location, and the radiology file's reduced size Patient data, radiology images and exam information are instantly available from anywhere with FlowPoint.
Managing Medical Workflows
Through its existing health-care segment, GDTI Healthcare, Guardian provides FlowPoint, a Web-based integrated proprietary radiology information system (RIS) and picture archiving and communication system (PACS). As Dishaw explains, "FiowPoint provides the target health-care market with an intewww.vrexpo.net
enables faster, more efficient movement. Guardian's focus on the growing healthcare informatics market was clearly illustrated by the strategic acquisition of Wise Systems Ltd., a premiere developer of radiology information systems based in the U.K. "As a result of the Wise acquisition, GDTI acquired a solid client base of 30+ hospitals
CONNECT
Robert Dishaw President & COO Investor Relations Michael Friedman 866-540-2677 mikef@prbroadcast.com
in the United Kingdom with an operating history of 17 years;' says Dishaw. "The technology developed by Wise over that 17-year history evolved into the current FlowPoint 'leading edge' Web-based architecture:' In the eyes of management, the acquisition also provided GDTI Healthcare with international credibility and the capability to support the global language and market requirements, as well as the credibility to rapidly penetrate the U.S. marketplace. FlowPoint is suitable for all settings, from hospitals and radiology centers to rural clinics and the mobile medical environment. With up to 40 percent of patient medical information inaccessible at the time of need or treatment in the current health-care environment and the existing IT solutions both overpriced and inflexible, growth prospects for FlowPoint are impressive. The environment has indeed changed and, as a result, we have adapted by suppressing our desire for efficiency to focus on our essentia l needs of health and safety. The innovat ions of Guardian Technologies suggest that our sacrifice is unnecessary. While it is a comple x world, the Company has utilized intelligent imaging informatics to provide comple x technology solutions that meet both our primary and secondary concerns. R 2005 VALUERICH MAG AZINE 93
Interactive Strategy Is No Gamble
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Not everything that happens in Vegas stays in Vegas. The popularity of gaming, one of the perennial trademarks of Las Vegas, has expanded well
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Gaming, once primarily a destination sport, has now taken up residence in our homes with prime-time cable hits including ESPN's "World Championship of Poker" and Bravo's "Celebrity Poker Showdown;' an abundance of Internet gambling and online casino sites, and most recently its infiltration of our high-tech best friends, cell phones and PDAs. In this high-stakes industry, understanding the game, making a name for yourself and choosing your allies carefully are critical. That is precisely why Interactive Games, In c. (OTCBB:IGAM), a developer and licensor of interactive casino technologies and slot machine games, is an odds-on favorite to hit the industry jackpot.
From Plastic Chips to Processor Chips There was a time when slot machines were secondary to floor games, such as blackjack or roulette, both in terms of prestige and popularity. However, as the potential payouts increased and their innovative designs drew more and more players, slot machines redefined themselves. Slots, along with other electronic gaming machines such as video poker, now account for more than 70 percent of total casino revenues. 94 VALUERICH MAGAZINE
2005
Electronic games are popular with both the customers and the casinos. Customers are attracted to the dynamic video interfaces and creative new games, as well as the large jackpots enabled by multi-player networking, and casinos prefer the machines to table games because their labor costs are much lower and the financial return is more consistent.
Interactive Games' role as a licensor is only one component of the Company's multi-pronged business model Interactive Games, headquartered appropriately enough in Las Vegas, is strategically positioned to capitalize on this appeal. In April of this year, the Company announced its purchase of a license for the title " Ed McMahon's Million Dollar Madness" Class Ill slot machines from BestBet Media Group, Inc. The state-of-the-art slot machine, which is the first to feature video and audio likenesses of Ed McMahon, will be offered as a stand-alone "life-altering prize" payoff machine.
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The former co-star of The Tonight Show Starring Johnny Carson is also hugely popu-
lar for his million-dollar-prize and sweepstakes giveaways. His image presents a great opportunity to create brand appeal and recognition for the newly public Interactive Games. "I think being able to come out of the box with a celebrity like Ed McMahon and get a deal done with that machine gives us a tremendous amount of credibility;' says Interactive Games founder Michael Friedman. "Our pipeline of over 150 titles is already well-established and our developer is one of the well-known gurus in the field, respected by every major manufacturer:' In these types of licensing arrangements, Interactive Games creates the software and then makes a deal with a major manufacturer to receive net revenues through a daily software royalty payment that ranges anywhere from $2 to $6, depending on celebrity involvement. "With a 2,000-machine minimum, even if it's on the lower end of the spectrum at $2 a machine, that's $4,000 a day and $120,000 a month;' says Friedman. "That one title alone can bring in excess of $1 million net to our company:' www.valuerichonline.com
Interactive Games expects to release the Ed McMahon Million dollar Madness machine later this year.
. . CONNECT
Building a Vertical Strategy
Interactive Games' role as a licensor is only one component of the Company 's multipronged business model designed to capitalize on new opportunities and expand into underserved vertical markets of the gaming industry. As a result of its recent purchase of Entertainment Broker Inc., the Company now owns the trademarked portal site www. EntertainmentBroker.com, a premiere gaming and entertainment online ticket portal that currently generates more than $1 million in revenue through ticket sales to sporting, musical and theater events nationwide. This is an important step in Interactive Games' vertical strategy as it plans to utilize casino gaming screens on existing slot machines, video poker tournaments, Internet kiosks, and casino-based ATMs to promote events and allow clients to purchase tickets. The Company is further establishing brand recognition by offering a real-time inventory of refurbi shed slot machines and casino products, which can be viewed and purchased online at www.igslotmachines. com. Primary markets for these products include the cruise industry and Caribbean and European casino operations; interested parties can browse the 2,000 to 3,000 machines of in -stock inventory as well as request digital photos. To maintain quality standards, Interactive Games uses an alliance with Spin, Inc., to confirm that clients are verified and approved casino operators before shipping. Going Mobile
The Company 's newest business initia-
tive is its foray into the burgeoning world of mobile gaming. The Company has formed a strategic alliance w ith Via-Cell Inc., a leading developer for cell phone games, for joint development and expansion of cell phone game offerings and is also in discussion with several wireless providers regarding partnerships. The potential for the mobile market is astounding . U.K.-based Juniper Research predicts that worldwide revenues for mobile www. vrexpo .net
interactive games IGAM :OTCBB Interactive Games, Inc. 6757 Spencer Street. Las Vegas, NV 89119 866-568-GAME www.interactivegamesinc.com
gaming will reach $19.3 billion by 2009 and will make up a third of the entire estimated $60 billion mobile entertainment market for that year. To entice users, Interactive Games is currently offering a preview of the play for free downloadable games, including blackjack, Interactive has formed strategic alliances for its share of the mobile gambling market, expected to reach $19.3 billion by 2009.
scratch ticket and video poker online at www.igmobilegames.com. Eventually, these games will work under a "pay for content model" that will be bundled with a cellular provider's subscription service where charges are added to the user's cell phone bill. Interactive Games can be defined as much by the markets they are in as by the markets they avoid. The Company has launched its cell phone gaming platform and games in the U.K., where the gaming market is esti mated to be $25+ billion and expected to grow as the country liberalizes its laws regarding casinos. The IG Slot Machines'Web site enables the Company to sell and ship
CONNECT Michael Friedman 866-540-2677 mikef@prbroadcast.com
its products throughout the world. Most recently, it completed a nine-casino deal in Peru. One area Interactive Games steers clear of is offshore gaming . Friedman suggests that software used in offshore gaming is often not accepted by regulated di stricts such as Nevada . In this respect, Interactive Games distinguishes itself from many of its competitors. "We've built our own architecture;' says Friedman. "That puts us far ahead:' Independently, Interactive Games' busi ness segments are impressive, but by entering into select alliances and agreements, the Company gains the ability to market, sublicense and distribute gaming products, all under the Interactive Games' brand name. This will ultimately build credibility, broaden market reach and make Interactive Games competitive with larger gaming companies and casinos. Friedman cites the business model of industry giant Alliance Gaming Corporation (NY5E: AGI ) as inspiration for Interactive Gaming. Once trading for under $1 on th e Bulletin Board, AGI is now a $500+ million revenue company with a market cap of $635 million. "Alliance started with a simila r model;' states Friedman, "putting routes out there and developing their own software and platforms:' Whether Interactive Games will follow in the footsteps of Alliance remains to be seen, but ba sed on the Company's initial success, established alliances and brand recognition, the Company is already a respected player, holding great cards. V R 2005 VALUERICH MAGAZINE 95
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Co rse To Decisions By Thomas J. Reynolds, Ph.D. After more than twenty years of academic and professional focus on the development of psychological theory, research methods, and decision modeling techniques, I began to realize that I could apply my knowledge toward solving what I believed is the single greatest challenge facing America- our seeming inability to teach ethics in a meaningful way. I was convinced that the answer to this lay in the development of a decision-making curriculum. Initially, I believed all change needed to start in elementary school since child ren face a myriad of societal pressures and often lack positive role models. They need to learn decision -making skill s befo re they make choices that land them in life-limiting or life-threatening situation s. Consequently, the program I developed, LifeGoals, is based on the philosophy that a child taught decision-making skills develops personal responsibility and , therefore, becomes a better citizen . However, during the development of LifeGoals, corporate ethics and the role business schools play in teaching ethics became a hot topic as more and more publicized scandals involving high-profile business lead ers emerged. Many business schools began requiring students to take at least one fundamental ethics course. Several schools instituted ethics centers and integrated ethics into the subject courses, such as accounting, marketing, leadership, etc. Student reaction, howwww. vrexpo .net
ever, seems to indicate that these classes seldom influence ethical behavior. Columbia University, for one, publicized student disappointment in traditional ethics discourse. These courses are typically based on case studies and class discussion . Though they offer interesting perspectives based on traditional ethics models, students do not feel that they experience any personal growth after taking them .
Some of the most egregious ads committed in business have been by executives who attended business schools that required ethics classes. The conclusion? Business schools may be reacting to the desire to see ethics play a critical role in their curriculum, but recruiters and students recognize that more is needed to create ethical business leaders. The more I thought about it, the more I considered that what was critically lacking from these ethics courses was, once again, a decision-making approach . Some of the most egregious acts committed in business have been by executives who attended business schools that required ethics classes. Clearly, those classes did little to alter these leaders' eventual behavior. Had they actually stopped to consider their decision process, they might have avoided making the poo r
choices they made. I wondered if decisionmaking was a skill that could, and should, be taught to MBAs as well as to children?
'Should' Has Little Impact The basis of my decision-making curriculum took shape after I re searched current character education programs in elementary schools. These show-and-tell lessons essentially ask children to apply abstract parallels from virtues and values to their everyday problems, without a model or real-life examples, and generally without any focus on the decision -making process. Additionally, the question was always "What should you do?" rather than "What would you do?" This approach appeared to have no real impact on changing intended behavior. Having thus framed the problem, my initial goal was to define a general decision model and then design a curriculum to teach it to elementary schoolchildren. Clearly, without a concrete choice model to rely upon, my experience told me, the desired results of consistent, positive changes in our children's decision-making ability were highly unlikely to occur.
Goal-Oriented Option Development (GOOD) Decision Modeling Afterfouryears of concerted effort I developed the LifeGoals curriculum for grades one through six, which teaches concepts t hat can be used for the rest of one's life. LifeGoals uses real situations that children could find 2005 VALUERICH MAGAZI NE 97
Notre Dame business student Matt Amado teaches South Bend, Ind., elementary grade students the GOOD Decision Model.
themselves in as the basis for their decisions, working through choice options for each situation to discover how each option can affect their future. More specifically, it helps children understand the relationship of each choice option to the achievement of their own personal goals. When children use their own personal goals as yardsticks for evaluating which options are in their long-term best interests, it yields five positive results: 1. It makes each lesson real to children and serves as a mental "rehearsal" before they are actually confronted with the situation. 2. Allows students to work out solutions irrespective of an authority figure (the t eacher). 3. It enables a focused discussion on personal goals and why goals are important. 4. It sets the stage for understanding that all decisions involve trade-offs, and provides the specific model as to how to evaluate trade-offs in an unbiased way. 5. It provides the basis for exploring the underlying reasons why goals are important (their defining personal values). The possible long-term societal impact of th is decision-making tool can only be specu98 VALUERICH MAGAZINE
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lated upon . Crime, abuse, unwanted pregnancies and school dropouts are but a few of the areas in which we can expect to have a significant long-term impact.
cal schools of ethics and how they yield different conclusions, in combination with a "right vs. wrong" orientation. This approach is just one more example of the top-down approach of character education I observed in elementary schools. Surely, those businessmen and women who have lied to shareholders, cheated the system and broken laws knew what they should do. Why, then, did the disconnect occur between
MBAs Learn by Teaching
It was the same theory that later drove my design of a decision-making ethics class for MBAs. Business ethics typically covers the histories and orientations of philosophi-
Each of the curriculum building blocks that define the decision-making model is critical to developing effective teaching skills across grade levels. Below, the key components of the LifeGoals GOOD Decision Model are arranged by the grade in which they are taught.
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A situation where choice has to be made.This can include time, place, others involved, etc.
Choice Options
Distinctions
Consequences
Alternatives or possibilities generated internally or externally
The characteristics of a choice option, both positive and negative
The short-term or immediate results of the choice options
"Labeling Choice Options"
[ 1]
"Associating to Consequences"
"Labeling Choice Options"
[2]
[3]
[K]
Recognize choice situations and identify when choices are present. "Identifying" Choice Context
Outcomes Longer term implication s or results of ~the deci sions made "Sequencing to Outcomes"
[4]
Driving Force (Self)
Goals Desi red endstates toward wh ich effort ~is directed "Chunking Entire Model"
[5]
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Each person's unique way ~~fseeing him or her self "Sequencing to Outcomes"
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ethics, and the possibility of bridging decision-making to ethics supported my previous theory, so I continued the pilot test.
should and would when it came time for them to make decisions? My pilot class was conducted at the University of Notre Dame, where I had taken a position as a visiting professor. Professor Joe Urbany, then associate dean of the business school, suggested that good leaders are a combination of good teachers and good decision-makers. The MBA course we envisioned simply suggested that business students' leadership skills would be improved by learning how to teach decision-making skills. Under this "leadership" concept, I taught a pilot class to MBAs in which they taught the decision-making model to local elementary students. However, my other agenda was in understanding their perspectives and reactions to learning the decision model.
framework, a language, to talk about choice, which they didn't have before. In our discussions, the MBA students determined that the bridge between teaching the decision - making model and the business ethics component of the class was made by virtue of the fact that [1] we are all the sum of the decisions we've made in our lives. A second foundational element also stemmed from understanding the decision model, namely, [2] All choice options can be linked to personal values, both positive and negative. The realization that values dri ve decision-making is key. Once this understanding becomes second nature, the students were forced to realize that [3] all personal values must be identified and defined if they are to be effectively used in decision-making. This defining of personal values became the source of ongoing discussion throughout the second half of the course as each student sought to understand his or her own personal values. They realized that [4] values define you, as if they were a badge, because they drive all of your decisions. When the class reached consensus on the first four postulates, the focu s moved to discussing the mechanics of making the tradeoff between values, wh ich determines which course of action they would take. Students came to "discover " that their values were organized in an internal hierarchy that determined the decisions they would make. Following recognition of the hierarchy concept, ethical problems were developed
MBA Pilots: Phase II
MBA Pilots: Phase I
The course was eight weeks long and consisted of a two- day workshop on the methodology of teaching the LifeGoals curriculum followed by eight lessons the MBA students delivered to underprivileged students at Monroe, a local elementary school in South Bend, Ind. The MBA students were required to submit a reflection paper to me after each lesson. At the end of the eight weeks, the MBA students were asked to write a paper on any topic of their choosing. Remarkably, sixteen of the seventeen students in the class wrote on the same topic: the impact of understanding a model of decision-making with respect to digesting and analyzing issues in ethics. Notre Dame is known for its emphasis on
This time, the semester-long course was divided into two completely separate components. The first again involved learning to teach the decision curriculum to elementary school students, and the second part focused upon an introspective look at the MBA students' decision-making using the decision model as the foundation . There were no lectures. Individual assignments focused on mapping decision problems, which were then presented to and discussed by the class. Several conclusions emerged from this unique ethics class. First, the MBA students unanimously supported the assumption that the best way to internalize the decision model was to teach it. Second, the students asserted that the posturing of decisions without a right-and-wrong orientation permitted them to delve more deeply into their own decision-making process with out undue concern for what the instructor wants to hear. Third, the decision framework allowed for focused dialogue in which students questioned each other and learned through pointed discussion, seen by the entire class to be a highly productive instructional method. So essentially, once given a model of choice, both the little kids and MBAs generate positive peer pressure. They ask, "Why are you making that decision?" They had a
Example Decision Model
I I
Loyalty: Stand Up Or Not? Brad was a little different from the other kids in the class, but Trevor always tried to be nice to him. When Brad went to the lunchroom alone, he was stopped by the class bully and his friend s. The boys made Brad give them his lunch money. Later, when Brad and Trevor went to their lockers, the bully and his friends were waiting for Brad again. Trevor wa s friends with some of the boys in the bully's group. If you were Trevor, what would be your choice? www.vrexpo .net
Kids won't get hi s lunch money
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Some kids In school are picking on your friend after class. Would you stand up for your friend or would you join them in order to fit in
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..... SUM
2005 VALUERICH MAGAZINE 99
and discussed in class. A majority, but not all of the students came to realize that, like the el ementary lessons they taught, [5] if a negative value is the basis for the decision, one is likely to be on a sl ippery slope of ethics. Th e deci sion framework permitted looking into the gray areas of ethical discussion, w hich students indicated were not readily dealt with in the other ethics courses th ey had taken . Though not as definitive as the prior five, the ent ire class agreed to a sixth pre mise, which is the reason that teaching ethics in this way will be more effective than any other method because [6] recognizing that ordering of values defines decision making, which in turn defines a person, will cause continuous introspection and reflection about all of one's decisions the rest of on e's life. Considering these conclusions, the implicat ions are a bit more interesting for the MBA students than the elementary children . Once they realize that all of us are the sum of our decisions and that we all have an order of values that drive our choices (the trade-offs),
they become self-modifying . They think about who they are, in terms of their values, defined by their decision -making, and this leads them to make the "right " decision - in business lingo: not taking shortcuts. This leads to the deduction that taking this ethics class will affect future behavior, which, as mentioned earlier, is the reason we teach ethics in the first place. The MBA students overwhelmingly supported the practi-
cality of such an approach. What if all business sch ools adopted a decision-based ethics approach? At the very least, students might feel that they were getting more value from the experience as they explored their own personal hierarchy of values . At most, business school ethics will finally achieve what they profess to do now - they will change future business leaders' decisions for the better. VR
Dr. Reynolds received his Ph .D. in mathematical psychology. His academic research in the area of decision-making and communications serves as the theoretical basis of the GOOD Decision Model - a detailed decision-making process, applicable to all ages and cultures. Dr. Reynolds has taught elementary education in a barrio in Ea st Los Angeles and junior high and high school students in South Central Los Angeles. At the university level, he has taught at the University of Notre Dame; the University of Southern California; the University of California, Berkeley; the University ofTexas, Dallas; St. Mary's College, Notre Dame; and Michigan State University. The GOOD Decision Model, along with a more complete overview ofthe LifeGoals program can be explored at www.lifegoals.net. A video summarizing the MBAs' comments on this new approach to decision ethics is available from staff@lifegoals.net.
maryanne russell PHO OGRAPHY
New York, NY I 212.308.8722 i nfo@maryan nerussel l.com www.maryannerussell.com A Certified Women's Business Enterprise (WBE) qualified for Diversity Programs
100 VA LUE RICH MAGAZ IN E
2005
Avon
I D&B I Morgan Stanley I HBO
Wachovia I Sony I Random House AT&T I Time Warner I M'erck I IBM
www.valuerichonline .com
lAWYERS. LEADERSHIP. LEGACY.
BROAD AND CAsSEL ATTORNEYS AT LAW
A full-service , Florida law firm with dedicated attorneys.
For more information contact: Kathleen Deutsch Partner, Corporate/Securities Department One North Clematis Street, Suite 500 West Palm Beach, Florida 33401 561 • 832. 3300
www.broadandcassel.com
BOCA RATON · FORT LAUDERDALE · MIAMI · ORLANDO· TAlLAHASSEE· TAMPA· WEST PAlM BEACH
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REALTY. COM
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broker-dealers, attorneys, licensed resistered representatives, and other securities professionals in matters involving: • • • • •
• • • • • • • • • • • • • • • • • •
Various going public transactions; Restricted stock matters; Mergers and acquisitions; Initial Public Offerings; The United States Attorneys Office, Securities and Exchange Commission, National Association of Securities Dealers, Commodity Futures Trading Commission, Federal Trade Commission, Federal Bureau of Investigation, Grand juries, and Stock Exchanges; General securities, corporate, contractual, business and transactional matters; Drafting of materials for public and private offerings and compliance; Blue Sky filings and compliance; Drafting of periodic filings and other SEC disclosure under the Securities Exchange Act of 1934; Drafting SEC registration statements and filings; Sarbanes-Oxley compliance; Internal investigations; Investor relations matters, including Securities Act of 1933 Section 17(b) disclosure; Market maker, Rule 15c-211, and Form 211 documents; Purchase and sale of broker-dealers; White Collar criminal defense; Federal criminal trials and related appeals; Defense of federal district court civil injunctive actions, SEC and CFTC administrative court actions, and NASD matters; Temporary Restraining Orders; Civil trials and appeals; Trading suspensions and Stop Order proceedings; State regulatory and enforcement matters; and Self Regulatory Organization investigations and examinations.
For more information about Hamilton, Lehrer & Dargan, P.A. or the information in this Profile, please contact Brenda Lee Hamilton, Esquire at Hamilton, Lehrer & Dargan, P.A. at 2 East Camino Real, Suite 202, Boca Raton, Florida 33432, Phone: (561) 416-8956, Fax: (561) 416-2855; Email: bhamilton@hldpa.com
M
GROUP
Sound Investments. Solid Relationships. Maxim Group has a rich history in investment banking coupled with a specialized approach to corporate finance. Connecting people, ideas and capital, we aim to be your first choice for achieving financial results. $7.5 Million PIPE
$22 Million IPO
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Maxim Grou p LLC
$17 Million PIPE
$21.6 Million IPO
Drug Gentium S.p.A
Drugmax, Inc. First Albany
Maxim Group LLC
Maxim Gro up LLC !-Bankers Securities Incorporated
New York City 405 Lexington Ave., New York, NY 10174 ·tel: 800-724-0761, tel : 212-895-3500, fax: 212-895-3555 Long Island, New York 99 Sunnyside Blvd., Woodbury, NY 11797 ·tel: 800-537-6923, tel: 516-393-8300, fax: 516-364-1310 Chicago 200 West Jackson Boulevard, Suite 2000, Chicago, IL 60606 ·tel: 800-621-0659, tel: 312-554-2200, fax: 312-554-1009 John Garrity 99 Sunnyside Boulevard, Woodbury, NY 11797 ·tel: 516-393-8300 info@maximgrp.com Member NASD & SIPC
AdAI Group, Inc. INVESTMENT BANKING I BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVE:
Dialog Group is seeking capital.
Keating Investments, LLC will be raising additional equity capital to fund AdAI Group's organic and acquisitive growth strategies while reducing debt.
COMPANY DESCRIPTION
Dialog Group provides relationship marketing communications services, business and consumer targeting databases for the healthcare, financial other direct-to-consumer, direct-to-professional business markets. CONTACT INFORMATION
INVESTOR RELATIONS
Dialog Group, Inc. Ph: 212-719-7013 www.dialoggroup.com
invrel@dialoggroup.com
COMPANY DESCRIPTION
AdAI Group is an aluminum technologies roll-up which represents the combination of several well-established aluminum manufacturing businesses, providing complete one-stop aluminum extrusion services to U.K. and continental European customers. CONTACT INFORMATION
INVESTOR RELATIONS
AdAI Group, Inc. Rupert Howe, UK Investor Relations rupert.howe@adalgroup.com Phone: +44 (1342) 833855
Keating Investments Pamela A. Solly, Vice President ps@keatinginvestments.com Phone: (720) 489-5876 www.adalgroup.com www.keatinginvestments.com
SYMBOL:
SYMBOL :
G~ DrugMax VIPER MOTORSPORTS, l n o. INVESTMENT BANKING I BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVE:
DrugMax is focused on integrating operations with those of Fa after the merger in November 2004. Receptive to exploring opportu enhance capital position and/or entering partnerships that advance strategy.
Viper is currently seeking an investment banking relationship to raise addi tional capital via private placement.
COMPANY DESCRIPTION
Drug Max is a specialty pharmacy and drug distribution providers that closely with doctors, patients, managed care providers, medical centers nd employers to deliver low cost and effective healthcare solutions. CONTACT INFORMATION
Drug Max, Inc. Ed Mercadante, President and CEO Ph: 860-676-1222 (ext. 138) www.drugmax.com
INVESTOR RELATIONS
COMPANY DESCRIPTION
Viper is a motorcycle company engaged in the design, development, production and commercialization of premium V-Twin heavyw eight motorcycles (custom cruisers) and proprietary V-Twin engines. CONTACT INFORMATION INVESTOR RELATIONS
Viper Powersports, Inc. Ph: 763-732-0778 Fax: 762-732-0781 www.viperpowersports.com
John Lai, VP Corporate Development Ph: 763-732-0778 johnl@vipermotorcycle.com
Cindy Berenson Ph: 860-676-1222 (ext. 138) berenson@familymeds.com
SYMBOL:
A路\ m
obozioJ~
PHARMA
DIAmOnDS INVESTMENT BANKING/ BUSIENSS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVE:
Abazias.com seeks to raise up to $1 million in non-floorless convertible ture arrangements or engage in investments with private equity
AXM Pharma is actively seeking bank facilities and trade lines of credit with internationally-minded financial institutions. Company will occa sionally explore equity financing arrangements in order to fund capital expen ses.
COMPANY DESCRIPTION
A top online suppl ier of discounted diamonds and jewelry, Abazias.com tures one of the largest certified loose diamond databases in existence more than 60,000 diamonds, valued at over $350 million. CONTACT INFORMATION
Abazias.com Oscar Rodriguez, CEO Ph: 352-264-9940, Fax: 352-377-0488 webcontact@abazias.com www.abazias.com
www.vrexpo .net
COMPANY DESCRIPTION
AXM Pharma, Inc. is 100% owner of AXM Pharma Shenyang, Inc. which holds 43 licenses to produce over-the-counter and prescription pharmaceutical products in The Peoples Republic of China. CONTACT INFORMATION
INVESTOR RELATIONS
AXM Pharma, Inc. Ph: 702-562-4155, Fax: 702-562-4157 www.axmpharma.com
Investor Communications Company, LLC Tom Bostic (866) 562-0134 www.iccinfo.com
SUM
2005 VALUERICH MAGAZINE 107
~Vertex ~STRIBUTING
Financial C
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INVESTMENT BANKING I BUSINESS OBJECTIVE:
INVESTMENT BANKING/BUSINESS OBJECTIVE:
Vertex seeks first round strategic investment of $3 million with anticipated second round of $3-5 million within 12-18 months.
FinanciaiContent seeks further investment for a strategic merger or acquisition ventures.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Vertex is a global distributor of non-proprietary computer software in both the retail and OEM format.
FinanciaiContent, Inc. is a leading provider of financial data and business applications to online media and financial services companies worldwide.
CONTACT INFORMATION
CONTACT INFORMATION
Vertex Distributing www.vertexdistributing.com
FinanciaiContent, Inc. Wing Yu, Chief Executive Officer Ph: 650-837-9850, Fax: 650-745-2677 wyu@financialcontent.com www.financialcontent.com
SYMBOL:
~ United "
Financial Mortgage Corp.
Le ading America Home
INVESTMENT BANKING I BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVE:
Paulson Investment is offering 1,000,000 units including Class A and Class B public warrants.
Seeking both strategic and capital partners to help bolster balance sheet and provide market support.
COMPANY DIOSCR\PT\ON
COMPANY DESCRIPTION
Nuvim produces, markets and distributes NuVim dietary supplements in beverage form containing two proprietary micronutrients, LactoActin and LactoMune, that have been shown in studies to help strengthen the immune system, support muscle flexibility and promote sturdy joints.
United Financial Mortgage is an independent nationwide retail and wholesale mortgage banker that originates, funds, sells and services residential and commercial mortgage loans.
CONTACT INFORMATION
United Financial Mortgage Corp. Ph: 630-571-7222 info@ufmc.com www.ufmc.com
NuVim, Inc. Richard Kundrat, CEO Ph: 201-556-1010 www.nuvim.com
CONTACT INFORMATION
SYMBOL :
SYMBOL:
MMN MaGIC MEi:Jta NE,rwOrUCS, INC.
INVESTMENT BANKING I BUSINESS OBJECTIVE:
\INVESTMENT BANKING I BUSINESS OBJECTIVE:
mPhase Technologies seeks to increase shareholder value.
Magic Media Networks seeks to find a placement agent and/ or arrange for a selling agreement for Securities. The Company currently has an "Effective" SB-2 Registration Statement.
COMPANY DESCRIPTION
mPha se Technologi es develops and commercializes next -generation so lutions for telecommunications and nanotechnology applications and is currently selling leading edge components and test equipment for digital subscriber networks (DSL). CONTACT INFORMATION
mPhase Technologies, Inc. Mary K. Whelan, EVP Marketing & Communications Ph: 973-256-3737 (ext 11 0) invest@mphasetech.com www.mphasetech.com
108 VALUERICH MAGAZINE
2005
COMPANY DESCRIPTION
Magic Media's core business is the implementation of private television networks and digital signage in high traffic leisure destinations. Wholly owned subsidiary, Destination Television, Inc., currently broadcasts Bar TV, Gym TV and Hotel TV. CONTACT INFORMATION
Magic Media Networks, Inc. Gordon Scott Venters, Founder and CEO gsv@destinationtelevision.com Ph: 954-332-6666 Fax: 954-332-0111 www.magicinc.com
www. valuerichonline.com
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Newtek
MtoiA NHYGROUP
Business Services, Inc.
TE CIINillllGI E S INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING/BUSINESS OBJECTIVE :
Th e Company is seeking an ongoing relationship with an investment ba firm to build upon, and to establish a path towards a possible future ing.
Newtek Business Services, Inc. is seek ing : Mergers and acq ui sition opportuni ties; Research and investment banking support.
COMPANY DESCRIPTION
MediaNet encompasses an integrated group of operating divisions volve around many aspects of media and technology including, brand wards programs and internet portal application s, television and video tion and intellectu al properties (Howdy Doody). CONTACT INFORMATION
Med iaN et Group Technologies, Inc. Martin Bern s, CEO Ph: 954-974-58 18 ext. 202, Fax: 954-974-5720 mbern s@medianetgroup.com www.med ianetgroup.com, www.bsprewards.com
COMPANY DESCRIPTION
Newtek Business Services' mission is to become the premier provider of quality financial products and business services to smal l and medium-sized businesses across the U.S. CONTACT INFORMATION
Newtek Bu siness Services, Inc. Barry Sloan e, Chairman and CEO Ph: 212-356-9500 ext 101, Fax: 212-643-1 006 bsloane@newtekbusinessservices.com www.newtekbusinessservices.com
MERGE & ACQUIRE
....
SYMBOL:
SYMBOL:
S CiEN C E S
D E R M A
COACH INOUS I RI IS GROUP. IIC .
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Derma Sciences seeks to establish research coverage, ach ieve listing o an exchange and increase trading vo lumes through new investors.
Coach Industries is currently exploring merger and acquisiti on opportunities.
COMPANY DESCRIPTION
Through its subsidiaries, Coach Industries offers an array of fi nancial services and insurance products to commercial fleet operators and independent contractors in the co urier industry and manufactures specialty ve hicles for commercial fleet operators in the luxury limou sine services industry.
Derma Sciences is a fully integrated manufacturer, marketer and supplier fa complete line of products for wound and skin care. CONTACT INFORMATION
INVESTOR RELATIONS
Derma Sciences, Inc. 609-5 14-4744 www.dermasciences.com
Lester Rosenkrantz lester@camerona ssoc.com
COMPANY DESCRIPTION
CONTACT INFORMATION
Coach Industries Group, Inc Investor Relations 954-602- 1400 ir@cigi.cc www.cig i.cc
SYMBOL:
SYMBOL:
newmarket
t c c h no I o gy
INVESTMENT BANKING OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
NewMarket is working to expand its sharehold er base to include more ins itut ional investors, in part by applyi ng to AMEX for listing.
PHC seeks to establish a positive, long-term investment ba nking relation ship in order to further develop its revenue growth strategy.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
NewMarket Technology is th e next step and expansion of a business plan init iated in June of 2002 at IPVoice Communications Inc. to become a glo ally recognized leader in the continuous introduction of Emergi ng Technologi s.
PHC, doing business as Pion eer Behavioral Health, operates subsidiaries t hat provide inp ati ent and outpatient behavioral hea lth care services, clinica l research, and Internet- and telephonic-based referral services.
CONTACT INFORMATION
CONTACT INFORMATION
INVESTOR RELATIONS
NewMarket Techn ology, Inc. Ph: 972-386-3372 ir@ipvoice.com www. newmarkettechnology.com
Pioneer Behavioral Health Ph: 978-536-2777 info@phc-inc.com www.p hc-inc.com
Hayden Communication s, Inc. 843-272-4653 Matt@haydenir.com
www. vrexpo.net
SUMM
2005
VALUERICH MAGAZINE 109
I
:
~
METWOOD
INTERNATIONAL INC
BUILD I NG
SOLUTIONS
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Bio-Lok is seeking mergers & acquisitions of small companies, business contacts, and market support for developed technology.
Metwood is looking to create a relationship with the right firm to promote the Company, as well as to help in the attainment of financial goals.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Bio-Lok is the manufacturer and distributor of the " Bio- Lok~ Precision Dental Implant System:'
Metwood manufactures light gauge steel building components for all types of construction .
CONTACT INFORMATION
CONTACT INFORMATION
Bio-Lok International, Inc. Bruce L. Hollander, CEO & President Ph: 954-698-9998 (Ext 12) blh @biolok.com www.biolok.com
Metwood, Inc. Ph: 540-334-4294 Fax: 540-334-4293 www.metwood.com
SYMBOL:
.. ~_.,CHANGE 路 "! ..,_ :crpcrat1on . ; L
INVESTMENT BANKING OBJECTIVE:
INVESTMENT BANKING/BUSINESS OBJECTIVE:
The X-Change Corporation is seeking market support as well as opportunistic acquisitions of oil and gas concerns whose plans and operations are compli mentary to those of the Company.
NetSol's Investment Banking objectives are strategic acquisitions and capital raises. These objectives are currently handled by Maxim Group.
COMPANY DESCRIPTION
The X-Change Corporation is an oil and gas producer who currently operates several wells in Texas.
COMPANY DESCRIPTION
NetSol Technologies, Inc., an SEI CMM Level 3 and ISO 9001 company, is a leading developer of integrated leasing, treasury, and knowledge management systems for the banking, leasing, and auto finance verticals. CONTACT INFORMATION
CONTACT INFORMATION
NetSol Technologies, Inc. Emaad Burki, SVP Ph: 301-869-0500, Fax: 301-869-3713 eburki@netsoltek.com www.netsoltek.com
The X-Change Corporation Investor Relations Michael P. Mcinerney Ph: 972-747-1206 info@x-changecorp.com www.x-changecorp.com
A DVANCED SPINAL TEC HNOLOGIES, INC . A REVOLUTION IN THE TREATMENT OF BACK PA IN
~ arcalex
SYMBOL:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Advanced Spinal Technologies is seeking to generate interest in the Company's preparation to go public and private market opportuniti es.
Archipelago Holdings is seeking business development opportunities and market support.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Advanced Spinal Technologies is a medical device company with U.S. and Worldwide rights to market the patented Power-assisted Spinal Mobilization instrument designed to administer an innovative and revolutionary treatment for acute or chronic back pain.
Archipelago Holdings Inc. operates the Archipelago Exchange (ArcaEx), the first open all-electronic stock market in the United States.
CONTACT INFO
Sky Capital Enterprises Ross Mandell Ph:001 2127091900 w ww.skycapitalventures.com
110 VALUERICH MAGAZINE
2005
CONTACT INFORMATION
Archipelago Holdings, Inc. Ph: 31 2-960-1696 www.arcaex.com
www.valuerichonline. com
INVESTMENT BANKING I BUSINESS OBJECTIVES: INVESTMENT BANKING I BUSINESS OBJECTIVES:
Bl astGard is currently seeking business development opportunities and ket support. COMPANY DESCRIPTION
BlastGard was created to design and develop proprietary blast miti materials.
r-
CWTC is currently seeking bu siness development opportunities and market support. COMPANY DESCRIPTION
CWTC's aim to be a dominant player in the trade agency business and direct investment consultancy se rvice, linking com panies in Chin a to the rest of the world.
CONTACT INFORMATION
CONTACT INFORMATION
INVESTOR RELATIONS
BlastGard International, Inc. Jim Gordon, Chairman & CEO jgordon@blastgardintl.com Ph: 727-592-9400 www.b lastgardintl.com
China World Trade Corporation Ph: 001-8620- 3878-0186 ext. 821 www.chinawtc.net
ir@chinawtc.com
S YM BOL:
the DTgroup
-· ENERGY
a real estate company INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
The DT Group is looking for co-managers and syndicates for offerings.
EENT is seeking business development opportunities and increased market support.
COMPANY DESCRIPTION
The DT Group is a fully integrated real estate company comprised of 5 ing entities and 16 investment partnership. CONTACT INFORMATION
Sponsor: US EURO Securities, Inc. Michael Roy Fugler Ph: 917-834-7250 www.useurosecurities.com
COMPANY DESCRIPTION
EENT develops and markets au xiliary power generators for the long haul trucking industry and its products are geared toward reducing pollution and dependence on foreign energy sources by limiting use of diesel fuel and thereby reducing noxious emissions into the environment. CONTACT INFORMATION
EENT Willard G. McAndrew, Ill, President & CEO Ph: 972-732-6360 info@eent.net
SYMBOL :
1.5» GAI§1(XY
ENERGY
CORPORATION
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Galaxy Energy is seeking to raise funds for future projects and possible acq tions.
GenOil seeks to increa se shareholder value and raise additional capital at a higher valuation.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Gala xy Energy is an oil and gas exploration and production company unconventional and conventional natural ga s properties in Wyom Montana, Texas and Europe.
GenOil's technologies represe nt either breakthrough or innovative technological approaches to existing oil and gas production or refinery problems.
CONTACT INFORMATION
INVESTOR RELATIONS
Galaxy Energy Corporation Ph: 303-293-2300 www.galaxyenergy.com
Brad Long Ph: 360-945-0395 brad@galaxyenergy.com
www. vrexpo .net
CONTACT INFORMATION
INVESTOR RELATIONS
Genoil , Inc. David Lifschultz, Chairman & CEO Ph: 914-393-5800 www.genoil.net
Candida Beaumont Ph: 212-688-9606 ir@genoil.net
SUM
2005 VALUERICH MAGAZINE 111
GLOBAL AIRCRAFT SOLUTIONS GLOBAL
PAYMENT TECHNOL OGlES
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Global Aircraft Solutions is interested in securing additional funding for certain productivity-improving or synergistic acquisitions and other asset-based business opportunities.
Global Payment Technologies is currently seeking business development opportunities and increased market support.
COMPANY DESCRIPTION
Global PaymentTechnologies is a worldwide leader in the design, manufacturing and marketing of currency validation systems, including paper currency validators and related paper currency stackers.
Global Aircraft Solution s provides parts support and maintenance, repair and overhaul services for large passenger jet aircraft to scheduled and charter airlines and aviation leasing companies. CONTACT INFORMATION
INVESTOR RELATIONS
Global Aircraft Solutions, Inc. Ph: 520-294-3481 www.globalaircraftsolutions.com
Hamilton Aerospace Technologies Gordon Hamilton dhamilton@HamAeroTech.com
COMPANY DESCRIPTION
CONTACT INFORMATION
INVESTOR RELATIONS
Global Payment Technologies, Inc. Ph: 631-231-1177 www.gptx.com
Thomas McNeill, VP & CFO investorinfo@gptx.com
SYMBOL:
SYMBOL:
GuruNet .;:~ INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
GuruNet is currently seeking long-term investments.
GVI Security Solutions is seeking business development opportunities and increased market support.
COMPANY DESCRIPTION
GuruNet Corporation develops and markets Answers.com, which provides quick, integrated reference answers instead of just search engine links. CONTACT INFORMATION
Guru Net Corporation Jay Bailey, Director of Communications Ph: 866-576-0352 ir@gurunet.com www.gurunet.com
COMPANY DESCRIPTION
GVI Security Solutions is a rapidly growing pure play Homeland Security Enterprise Solutions provider. CONTACT INFORMATION
INVESTOR RELATIONS
GVI Security Solutions, Inc Ph: 972-245-7353 www.gviss.com
CCG Investor Relations Crocker Coulson Ph: 818-789-0100 crocker.coulson@ccgir.com
SYMBOL:
1-Sector INVESTMENT BANKING I BUSINESS OBJECTIVES:
1-Sector is currently seeking business development opportunities and increased market support. COMPANY DESCRIPTION
/-Sector designs and sells Cisco-based IP Telephony/VoiP solutions and network infrastructure equipment from Cisco Systems, Inc. for enterprise organizations and provides both implementation services and post-implementation support services related to such solutions. CONTACT INFORMATION
INVESTOR RELATIONS
I-Sector Corp. Ph: 713-795-2000 info@i-sector.com www.i-sector.com
PR Financial Marketing, LLC Jim Blackman, President Ph: 713-256-0369 jimblackman@prfinancialmarketing.com
112 VAlUERICH MAGAZINE
2005
Onstream > > >> >>>>>> MEDIA INVESTMENT BANKING I BUSINESS OBJECTIVES:
On stream Media seeks to work with experienced institutions for assistance in evaluating and executing strategic acquisitions; facilitating new business development; increasing market support and creating diversified shareholder base to increase liquidity. COMPANY DESCRIPTION
On stream Media Corporation is a digital media services provider that specializes in web-based executive presentation and collaboration; audio, video and other rich media communications; and digital asset management services for global audiences. CONTACT INFORMATION
Onstream Media Corporation Barry A. Rothman Ph: 954-917-6655 brothman@vdat.com www.onstreammedia.com
www.valuerichonline .com
~PDG Environmental, Inc.
?~p Si vida
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
PDG Environmental is currently seeking equity/ debt financing to acquisition(s) for diversification and growth.
pSivida is currently seeking business development opportunities and increased market support.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
PDG Environmental Inc. is an environmental and specialty contractor quartered in Pittsburgh with 13 offices throughout the Country.
pSivida is a global nanotechnology company developing and commercializing a new biomaterial, nanostructured porous silicon (BioSilicon'"), for multiple potential applications in healthcare with a core focus on drug delivery.
CONTACT INFORMATION
INVESTOR RELATIONS
PDG Environmental, Inc. Ph: 800-972-7341 www.pdge.com
Dulcia Maire Ph: 954-979-7077
CONTACT INFORMATION
pSivida Limited Josh Mann, Investor Relations Ph: +61-8-9226-5099 joshuamann@psivida.com www.psivida.com
SYMBOL:
SYMBOL:
Sc1ent1oo inteU.g~ The world's leader in
Business Process Automation
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Q4i is seeking business development opportunities.
Scientigo is seeking to develop a successful relationship with an institution that understands its business objectives and industry. The institution will assist the Company with its capital needs, evaluating acquisitions, facilitate research, and will be a strong retail advocate and supporter in the market.
COMPANY DESCRIPTION
Q4i offers innovative, creative and breakthrough solutions that enablefina institutions, broker-dealers, companies and other organizations to and grow their businesses and simplify their processes despite an increasi complex operating environment. CONTACT INFORMATION
Q4i, Inc. Ph: 972-661-1880 www.q4i.com
COMPANY DESCRIPTION
Scientigo is the world 's leader in intelligent Business Process Automation technologies, specializing in developing and licensing intellectual property to partners whose products and services complement its technologies for the benefit of clients. CONTACT INFORMATION
INVESTOR RELATIONS
Scientigo, Inc. Ph: 704-319-5155 info@scientigo.com www.scientigo.com
Vince Buczek Ph: 301-751 -1457 investor@scientigo.com
SYMBOL:
~orkstream INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Wits Basin is seeking support and sponsorship to a senior exchange.
Workstream is currently seeking business development opportunities and market support.
COMPANY DESCRIPTION
Wits Basin is a precious minerals exploration and development company project interests in South Africa, Continental US and Canada. CONTACT INFORMATION
Wits Basin Precious Minerals Inc. Ph: 612-349-5277 www.witsbasin.com INVESTOR RELATIONS
Aurelius Con sulting Group Wits@runonideas.com
www. vrexpo .net
COMPANY DESCRIPTION
Workstream provides enterprise workforce management solutions and services that help companies manage the entire employee lifecycle -from hire to retire. CONTACT INFORMATION
Workstream Inc. Ph: 407-475-5500 www.workstreaminc.com
SUM
2005 VALUERICH MAGAZINE 113
SYMBOL:
SYMBOL:
B I ~::~% PHAN â&#x201E;˘ TE C HNOLOGIES , INC. BSI 2000~ INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Biophan seeks to expand broker and in st itutional investor awareness of the Company and its planned li sting on a major exchange in 2005.
8512000 is seeki ng partnerships and relationships to help increase market share and improve its ab ility to compete in the homeland security and commercial security markets and would like to increase global awareness for the Company and its products.
COMPANY DESCRIPTION
Biophan develops and markets technologies for making biomedical devices safe and compatible with magnetic resonance imaging (M RI).
COMPANY DESCRIPTION
BSI2000's primary market is Homeland Security and is first in identifying, validating and tracking people with optical smart cards.
CONTACT INFORMATION
Biophan Technologies, Inc. Ph: 585-214-2441 info@biophan.com www.biophan.com
CONTACT INFORMATION
INVESTOR RELATIONS
BSI2000, Inc. Jack Harper, President & CEO Ph: 303-231 -9095 jharper@bsi2000.com www.bsi2000.com
Frank Hawkins or Julie Marshall Hawk Associates Ph: 305-852-2383 info@hawkassociates.com
SYMBOL:
SYMBOL:
Electric Aquagenics Ur lir~;ted
;!Centale INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Centale is seeking strategic partnerships.
Electric Aquagenics is seeki ng public market exposure and has launched a corporate promotional campaign by hiring Strategic Growth Internationa l (for IR) and Rubenstein Public Relations.
COMPANY DESCRIPTION
Centale has over 25 years of combined Direct Response, Sales and Marketing experience, technology development experience, and is supported by a software development team of over 100 programmers. CONTACT INFORMATION
Ph: 754-224-3300 www.centale.com
...,..,.
COMPANY DESCRIPTION
Electric Aquagenics is a supplier of non-toxic water treatment technologies and equipment used in cleaning and disinfecting everything from carpets and poultry processing to extending the shelf life and freshne ss of grocery produce. CONTACT INFORMATION
INVESTOR RELATIONS
Electric Aquagenics Unlimited, Inc. Gaylord Karre n, President & CEO gaylord@eau-x.com Ph: 801 -443-1031 www.electricaquagenics.com
Joe Stapley, VP Investor Relations jstapley@eau-x.com Ph: 866-302-3289
SYMBOL:
t!ia
MILEST~~NE SC IE NT I F I C
Industrial !iervices of America
INVESTMENT BANKING /BUSINESS OBJECTIVES:
INVESTMENT BANKING /BUSINESS OBJECTIVES:
ISA is seeking market support services and strategic partners leading to LLC development, partnerships, acquisitions, and logi stic opportu nities.
Milestone is prepared to enter the phase of joint partnerships for commercialization of new technology for two projects: (1) a single tooth anesthetic delivery syste m and (2) commercialization of the patented CompuFio technology for spi nal anesthetic injections.
COMPANY DESCRIPTION
ISA is a logistic management services company that offers total package waste and recycling management services to commercial, industrial, and logistic customers throughout North America, as well as providing recycling and scrap processing and waste handing equipment sales and services. CONTACT INFORMATION
Industrial Services of America, In c. Greg Brendel, Director Sales & Marketing 888-494-4472 ext . 7538 gbrendel@isa-inc.com www.isa-i nc.com
114 VALUERICH MAGAZINE
R 2005
COMPANY DESCRIPTION
Milestone is the world leader in advanced injection technology. CONTACT INFORMATION
Milestone Scientific Ph: 800-862-1125 www.milestonescientific.com
www.valuerichonline .com
SEEKING MARKET SUPPORT SYMBOL:
21st Century HOLDING COMPANY
INVESTMENT BANKING I BUSINESS OBJECTIVES :
INVESTMENT BANKING I BUSINESS OBJECTIVES:
21st Century Holding is currently seeking market support.
NaturaiNano is seeking t o expand broker and in stitutional awareness of fast growing nanotechnology company, its unique nanomaterials and applications, an d the experienced management team .
COMPANY DESCRIPTION
21st Century Holding Company is a vertically int egrated in surance holding company, wh ich, through its subsidi aries, controls substantia lly all aspects of the insura nce underwriting, distribution and claims process.
COMPANY DESCRIPTION
NaturaiNano is a development-stage co mpany w hose primary business is cessi ng, developing and commercializing naturally occurring nanotech nol materials.
CONTACT INFORMATION
21st Century Holding Company Richard A. Widdicombe, CEO rwidd icombe@tchusa.com Ph: 954-308-1254 www.21 centuryholding .com
CONTACT INFORMATION
Ph: 585-214-8005 info@naturalnano.com www.natura lnan o.com
SYMBOL:
~
CHARLES&: COLVARD"
~路Telkonet
- - - - - --Created - - - - - - -
MO
SSANITE
INVESTMENT BANKING / BUSINESS OBJECTIVE :
INVESTMENT BANKING/BUSINESS OBJECTIVE:
Telkonet, Inc. is seeking strategic partnerships with value-added resellers, tern integrators and distributors.
Seeking Market Support. COMPANY DESCRIPTION
Charles & Colvard, Ltd., manufactures, markets and distributes Charles & Colvard created moissanite jewels for sa le in t he world wide jewelry market.
COMPANY DESCRIPTION
The Company is the leading developer of high-speed Internet ove r the existing electrical lines within commercia l buildings. CONTACT INFORMATION
INVESTOR RELATIONS CONTACT:
Ken Sgro CEOCast.com Ph: 212-732-4300 kensgro@ceocast.com www.t elkonet.com
Investors Stock Daily, Inc. Jody M. Janson Ph:5 85-454-6955, Fax: 585-23 jody@istockdaily.com www. istockda ily.com
CONTACT INFORMATION
Charles & Colvard, Ltd. Jim Braun VP Fin ance & CFO Phone: 919-468-0399, Fax: 919-468-5052 jbraun@moissan ite.com www.moissa nite.co m
SYMBOL :
c h emok 1ne
therapeutics
INVESTMENT BANKING/ BUSINESS OBJECTIVE :
INVESTMENT BANKING I BUSINESS OBJECTIVES:
M-Wave, Inc. is currently seeki ng market support.
Chemokine is currently seeking market support .
COMPANY DESCRIPTION
M-Wave is a se rvice provider of high performance printed ci rcuit boards u a variety of digital and high frequency commun ications applications. CONTACT INFORMATION
INVESTOR RELATIONS CONTACT
M-WAVE Phone 630-562-5550 Fax: 630-562-243 1 www.mwav.com
Aurelius Consulting Group, Inc. Dave Gentry Phone 800-644-6297 info@run onideas.com www.ru nonideas.com
www.vrexpo .net
in
COMPANY DESCRIPTION
Chemokine Therapeutics is a biotechnology company developing drug s in the field of chemokin es and cytoki nes, a family of sma ll, so luble protei ns, primarily located within bone marrow to regul ate stem cell growth, differentiation and maturation. CONTACT INFORMATION
Chemokine Therapeutics Corp. Hassan Salari, Ph.D., President & CEO Ph: 604-822-0301 www.chemokine.net
SUM
2005 VALUERICH MAGAZINE 115
Consolld~ted
.
SYMBO L:
~
E nergy
Inc. . '
TECHI\IOLOGIES
..
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
To create superior shareholder va lue by supp lying coal, gas and oil in a safe, environmentally-friendly manner.
CSMGTechnologies is interested in helping the investing public become aware of the Company and th e promising potential behind its two current projects.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Consolidated Energy is a company engaged in coal mining operations, gas and oil exp loration and development, and development of related clean energy technologies that are environmentally friendly.
CSMG Technologies is a technology management company that identifies, finances, owns, d evelops, licenses and markets innovative advanced technologies. CONTACT INFORMATION
CONTACT INFORMATION
CSMG Technologies, Inc. Donald Robbins, President & CEO Ph: 361-887-7546 www.ctum.com
Consolidated Energy, Inc. David W Guthrie, President and CEO Ph: 317-287-04 19 Fax: 317-287-0442 dguthrie@ceiw.net www.ce iw.net
,
SYMBOL:
SYMBOL:
eldorado gold INVESTMENT BANKING/ BUSINESS OBJECTIVE:
INVESTMENT BANKING/BUSINESS OBJECTIVE:
Duraswitch is seek in g additional partners in licensing existing and new technologies.
The Company is seeki ng acq ui sition candidates, and / or seeking strategic merger, partnerships, joint ventures or acq ui sition.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Duraswitch licenses enabling technologies to established manufacturers and OEMs worldwide. Its focus is the multi-billion dollar electronic-switch market.
Eldorado Gold Corporation is an international gold-producing company currently active in development and exp loration.
CONTACT INFORMATION
CONTACT INFORMATION
Heather Beshears, VP Corporate Communications Ph: 480-586-3300, Fax: 480-844-9625 heather@duraswitch.com www.duraswitch.com
Eldorado Gold Corporation Nancy Woo, Manager, Investor Relation s Ph: 604-601-6650, Fax: 604-687-4026 nancyw@e ldoradogold.com www.e ldoradogold.com
SYMBOL :
SYMBOL:
HearusA INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING/ BUSINESS OBJECTIVE:
GigaBeam is currently seeki ng market support.
HearUSA is Seeking Market Support. Th e Company seeks to expand the current 18,000 retail shareholders to include a significant percentage of insti tutional investors as a resu lt of support from the right inve st m ent banking organization.
COMPANY DESCRIPTION
GigaBeam Corporation d es igns, develops, insta ll s, and maintains high performance wireless point to point communications access solution s that operate in the licensed 71-76 GHz and 81-86 GHz radio spectrum bands. GigaBeam Corporation Lou Slaughter, CEO Ph: 617-921-5500 lou.slaughter@gigabeam.com www.gigabeam.com
116 VALUERICH MAGAZINE
COMPANY DESCRIPTION
Based in the U.S., HearUSA is engaged in prov iding professional hearing health care products and services. The Company ha s 157 company-owned and operated centers in 11 U.S. states and one Canadian Province, Ontario.
CONTACT INFORMATION
CONTACT INFORMATION
Paul A. Brown, M.D., Chairman Ph: 561-478-8770 ext . 123, Fax: 561 -478-9603 pbrown@hearusa.com www. hearusa.com
2005
www.valuerichonline .co m
INTEG~ ED速 AM E RICA T
INSURANCE OFFICE OF AMERICA
H E
F
E RT IL IT Y
C
0 M P i\ N y速
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
lOA establishes tactical relationships to assist small to mid-cap compani recouping underwriting profits, creating investment income, and im cash flows. All of this is accomplished through the placement of ins products with an objective of enhancing product knowledge and offe innovative avenues for ROI.
lnegraMed is seeking additional institutional sponsorship and to develop relationships for future expansion needs.
COMPANY DESCRIPTION
lOA is one of the fastest growing multi-line insurance agencies in the U States.
COMPANY DESCRIPTION
lntegraMed provides business servi ces to a national network of fertility centers; distributes pharmaceutical products and treatment financing programs directly to consumers; and operates http://www.integramed.com, a leading fertility portal. CONTACT INFORMATION
lntegraMed America, Inc. John W. Hlywak, Jr., CFO jhlywak@integramed.com Ph: 914-251-4143 www.integramed.com
CONTACT INFORMATION
Insurance Office of America Douglas Irvine Ph: 561 -776-0660 Fax: 561-776-0670 irvined@ioa-insurance.com www.ioausa.com
SYMBO L:
~!'I~~ IntegratedEnvironmental
Technologies, Ltd. INVESTMENT BANKING/BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Integrated Environmental Technologies, Ltd. is seeking market support.
IMTS is seeking growth capital, preferably in the form of debt financing using the race simulators and/o r revenue share partner contracts as collateral.
COMPANY DESCRIPTION
Integrated Environmental Technologies, Ltd. operates two technology sions: EcaFioTM DivisionWater Treatment Disinfection and Purification; tial Oils DivisionOil Extraction from Botanicals CONTACT INFORMATION
Integrated Environmental Technologies Ltd. Bill Prince, President & CEO Phone: 843-390-2500, Fax: 843-390-3900 bill.prince@ietltd.net www.ietltd.net
COMPANY DESCRIPTION
IMTS is a world leader in race car simulation with patented technology and an exclusive license through 2009 with the fastest growing sport in America, NASCAR. CONTACT INFORMATION
INVESTOR RELATIONS
Interactive Motorsports and Entertainment Corporation Ph : 317-295-3500 www.smsonline.com
Steve Wagoner Ph: 866-825-851 5 (ext 108) lnvestorRelations@SMSonline.com
SYMBOL:
lumera
SYMBOL:
NGAS RESOU RCES, INC.
INVESTMENT BANKING/BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Lumera is currently seeking to Attract Market Support.
NGAS is currently seeking market support.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Lumera is a nanotechnology platform company delivering innovative ucts based on advanced materials and processes for the biotechnology, o cal and communications markets.
NGAS Resources, Inc. is an Appalachian based oil and gas company focused on natural gas development, drilling and reserve growth.
CONTACT INFORMATION
Lumera Corporation Tom Mino CEO Phone: 425-415-6900, Fax: 425-398-6599 tom_mino@lumera.com www.lumera.com
www. vrexpo.net
CONTACT INFORMATION
NGA5 Resources, Inc. Ph: 859-263-3948 www.ngas.com
SUM
2005 VALUERICH MAGAZINE 117
rellv
SYMBOL:
\
para g on financial INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING/BUSINESS OBJECTIVE:
Paragon Financial is currently seeking market support.
Reliv's invest or relations business plan's primary goal is to increase trading volume by building visibility among institutions and long-term investors.
COMPANY DESCRIPTION
Paragon Financial Corporation is a financial services business currently focused on the acquisition of companies that originate residential mortgages loans. CONTACT INFORMATION
Paragon Financial Corporation Ph: 904-285-0000 info@paragonfinancialcorp.com www.paragonfinancialcorp.com
COMPANY DESCRIPTION
Reliv International is an international manufacturer and network marketer of nutritional supplements. CONTACT INFORMATION
Reliv International, Inc. Fred Nielson, Manager IR Phone: 636-537-9715, Fax: 636-537-9753 fnielson@relivinc.com www.reliv.com
INVESTOR RELATIONS
Rick Lutz The LC Group Ph: 404-261-1196 lcgroup@mindspring.com
SYMBOL :
SYMBOL :
I
• I
I
I
SCOLR Pharma, Inc. RoYALE ENERGY, INc. INVESTMENT BANKING/BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Royale Energy is currently Seeking Market Support.
SCOLR Pharma is currently seeking market support.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
Royale Energy's principal lines of bu siness include acquisition of natural gas production; proven reserves, and drilling of both exploratory and developmental wells using 3D seismic imaging.
SCOLR Pharma is a specialty pharmaceutical company that leverages its formulation expertise, and its proprietary and patented drug delivery technologies to introduce distinctive and novel pharmaceutical, Over-the-Counter, and nutritional products.
CONTACT INFORMATION
Royale Energy, Inc. Chanda Ida no, Director of Marketing Ph: 800-447-8505 chanda@royl.com www.royl.com
CONTACT INFORMATION
SCOLR Pharma, Inc. Daniel 0 . Wilds, President and CEO danowild@scolr.com Ph: 425-373-0171 www.scolr.com
SYM BOL:
SYMBO L :
&--~ ifr~~~~rn •
Resources
SpatiaLight ®
Microdisplays
INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
Southern African Resources is seeking to secure a US listing to facilitate further investment by American investors, who already account for significant percentage of shareholder base. The Company's longer-term objective is to increase market capitalization by improving market awareness.
Spatialight is currently seeking market support.
COMPANY DESCRIPTION
Southern African Resources is an exploration, investment and development business focu sed on plat inum and listed on the AIM market of the London Stock Exchange. CONTACT INFORMATION
INVESTOR RELATIONS
Southern African Resources Pic Ph: +44 (0) 20 7389 0500 info@sar-plc.com www.sar-plc.com
Kathy duPlessis duPlessis Associates Ph: +27 (0) 11 728 4701 platinum @dpapr.com
118 VALUERICH MAGAZINE
2005
COMPANY DESCRIPTION
Spatialight, Inc. is a leading developer and manufacturer of state -of-the -art high resolution liquid crystal on silicon (LCoS) microdisplay devices for use in High Definition televisions and rear projection monitors. CONTACT INFORMATION
Spatialight, Inc. Ph: 415-883-1693 ir@spatialight.com www.spatialight.com
ww w.valuerichonline .com
SYMBOL:
SYMBOL :
INVESTMENT BANKING/BUSINESS OBJECTIVE:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
TechTeam is currently seeking to Seeking Market Support.
Tri-S Security is currently seeking market support.
COMPANY DESCRIPTION
COMPANY DESCRIPTION
TechTeam Global delivers global, multilingual help-desk services and specialized IT solutions via our global locations in the United States, the United Kingdom , Sweden, Germany, Belgium, Romania , and through our wholly owned subsidiaries Digital Support Corporation, Sytel, Inc., TechTeam A.N .E., and TechTeam Cyntergy.
Tri-S Security provides contract services to Federal government agencies pursuant to long-term contracts. These services include providing uniformed and armed guards for access control, personnel protection, plant security, theft prevention, vehicular and foot patrol and prevention of sabotage, terrorist and criminal activities.
CONTACT INFORMATION
CONTACT INFORMATION
INVESTOR RELATIONS
TechTeam Global Inc. David W. Morgan, VP, Chief Financial Officer, Treasurer PH: 248-263-5741, Fax: 248-357-0840 dmorgan@techteam .com www.techteam .com
Tri-S Security Corporation Ph: 770-625-4945
Tony Schor Investor Awareness, Inc. Ph: 847-945-2222 tony@investorawareness.com
SYMBOL :
SYMBOL :
Y VERILINK" INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
U.S. Global Investors is currently seeking market support.
Verilink is looking to expand its relationship with the investment banking community in order to broaden its base of institutional investors and increase visibility through research coverage.
COMPANY DESCRIPTION
US Global is focused on profitable niche markets around the world and provides in vestment advisor, transfer agency and other services to U.S. Global Investors Funds and US Global Accolades Funds. CONTACT INFORMATION
U.S. Global Investors Ph: 800-873-8637 www.us-global .com
COMPANY DESCRIPTION
Verilink Corporation develops, manufactures and markets a broad suite of products that enable carriers (ILECs, CLECs, IXCs, and IOCs) and enterprises to build converged access networks to cost -effectively deliver next-generation communications services to their end customers. CONTACT INFORMATION
Veri link Corporation Ph: 303-968-3000 ir@verilink.com www.verilink.com
SYMBOL:
SYMBOL:
VoiP, INC. INVESTMENT BANKING I BUSINESS OBJECTIVES:
INVESTMENT BANKING I BUSINESS OBJECTIVES:
VoiP welcomes investment banking relationships that can pinpoint synergistic technologies and M&A candidates, and present our company to additional institutional and private investors.
ZAP is currently seeking analyst coverage.
COMPANY DESCRIPTION
VoiP is an emerging global service provider of superior quality Voice over IP based solution s offering residential and business customers more user friendly and affordable ways to communicate. CONTACT INFORMATION
VoiP Steven Ivester, CEO sivester@voipincorporated .com Ph: 954-434-2000 www.voipincorporated .com
www. vrexpo .net
COMPANY DESCRIPTION
ZAP, which stands for Zero Air Pollutions, was incorporated in California in 1994 to develop, manufacture, and market electric vehicles, scooters, and other recreation vehicles. CONTACT INFORMATION
INVESTOR RELATIONS
Zap Ph: 707-525-8658 zap@zapworld.com www.zapworld.com
Steven Kim, Director of IR Ph: 707-525-8658 (ext 298) investor@zapworld.com
SUM
2005 VALUERICH MAGAZINE 119
$849,000 Magnificent 1.3 acre mountalntiop lot makes this THE ideal location for an affluent family or a discriminating investor seeking a piece of paradise to develop for sumptuous vacations or lavish retreats. Enjoy shaded sunrises, gentle showers and magical sunsets that illuminate world renowned Waimea Bay and Oahu's exquisite North shore. This location is 30 minutes from downtown Honolulu. Nearby activities are seasonal. During the winter experience the splendor and beauty of the largest ridable waves in the world. In the summer snorkel, scuba dive or enjoy hiking trails to ancient Hawaiian sites. Oahu's North shore is more reasonably priced than similar locations in Maui, Kailua-Kana's "Gold Coast" and most of the "Mainland's" metropolitan areas. Prime real estate inventory in Hawaii is limited. Call me if your goal is to buy or sell land, an estate, luxury home or condo in Hawaii.
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Secure individual or corporate loans with Free Trading, Rest ricted and Treasury stock. Gain liquidity without fear of margin call, personal liability, selling or losing the benefits of equity ownership. Call AmeriFund Capital Finance, because selling is not an option! AmeriFund Capital Finance, LLC • 225 NE Mizner Blvd, Suite 300 • Boca Raton FL 33432 Phone 561 742 1106 • Fax 561 620 3241 • Email info@stocklending.com