from w-w-bb:

19.01.2007 - Total Rocketscience

The third and final company making up our Risk / Reward trilogy on shares for 2007 has so many investment negatives that most observers might not even give it more than a cursory glance. Although quoted on the London AIM market, it is based on the other side of the World, has reported revenues and cash flow of diddly squat and, more importantly, operates in an area of expertise so deep in boffinland that you need to be at least a 5 star techie to venture anywhere near it.

What originally persuaded us to give it a second look was the fact that legendary Stockmarket investor, Jim Slater, was pouring money into it via several successive rounds of financing. As we all know, Mr. Slater is a qualified accountant and hugely experienced corporate financier but clearly he is more at home in leafy Surrey than in the technologically rarified atmosphere of Southern California. However, he must have gleaned enough about what the company actually did to get extremely excited about it. In fact, by last Autumn, he had grown to like it so much that, to paraphrase the immortal Victor Kiam, he bought the remaining 51 % of the company that his vehicle, Original Investments, didn't already own.

The company in question was VIALOGY and, ever since it was fully reversed into Original just before Christmas, Slater's loyal band of followers have seen their highly speculative penny punt move on to the calculated risk category and been duly rewarded with a 50% shareprice improvement. We first latched on to this situation last April when we wrote a piece entitled The Cisco Kid ( see news archive ). To recap briefly, the company was set up by some brainboxes who had earlier worked together on supercomputing projects for NASA. Led by Dr. Sandip Gulati, the team appeared to have perfected software to detect and enhance extremely weak signals previously obscured by background noise. This may not seem particularly earthshattering to the layman but, apparently, the applications for this technology are not only revolutionary but almost limitless which suggests that an exponential rise in licensing income could well lie ahead.

Big news clearly travels fast on the Eastern seaboard because global behemoths Cisco and Boeing have already enlisted Vialogy to work on 2 major government inspired projects and these are just the ones that the company have been allowed to talk about publicly. As we reported in April, Cisco has contracted Vialogy to help with its IPICS programme which seeks to make sure that all emergency services and government agencies can communicate with each other quickly via computers and phones. The need to address this obvious requirement was highlighted by 9 / 11 when communications between different departments with different systems proved chaotic.

For its part, Boeing has recently confirmed that Vialogy has delivered a tenfold improvement in the accuracy and efficiency of the types of gyroscopes it uses in spacecraft and missile navigational systems. It is also known that both Cisco and Boeing see a major role for the technology in such areas as border controls and missile defence systems. Elsewhere a much smaller Texan company, Evolution Petroleum, is applying the technology to improving seismic evaluation of oil and gas deposits.

This initial clutch of applications is almost certainly just the tip of a very large iceberg that is going to float into view over the next few years and all that is required is a little patience. At todays price of 5.5p, Vialogy is valued at a mere 22m. To justify this valuation, the company would have to be earning say 2 million pretax. With cash reserves of 3 million and its heavyweight partners funding the projects it is involved in, Vialogy should be able to get through to breakeven without further recourse to shareholders. We would expect this stage to be reached sometime over the next 12 months. Thereafter, profits could / should escalate very dramatically as new applications and licensing income start to snowball.

On a two year view, shareholders could be rewarded extremely handsomely indeed. Vialogy is in so many ways akin to last weeks selection, CORAC. Both are now moving from the development stage to commercialization with the scales tipping away from blue sky risk towards the reality of cash flow. Both have mindblowing upside potential yet both have current shareprice action that makes drying paint look positively orgasmic. Although this presents an opportunity for latecomers, it is a frustrating byproduct of both companies involvement with highly sensitive technology and powerful, publicity shy partners. Moreover, the present lack of any meaningful numbers together with the sheer scale of future potential makes any serious stockbroker research well nigh impossible. All this will resolve itself in due course but, as they say in the Grolsch advert, all good things come to those who wait.

If he is he must be nuts.....

lol..

we can howl at the moon together cynic but keep your hairy palms to yourself..

Looking back to their RNS dated 5/1/2010 we should expect steady drilling results newsflow from the eight oil companies they are contracted to use their technology. Book that table in Montecarlo!

see you there, champers on ice.

catch the next flight and we could be holding hands on the beach in dubai tomorrow ..... i already have a large room + ditto bed!

ummm, Nice......see you later sailor..;=))

There you are you see! I said to get a room! Beware however, as I don't believe the UAE are too tolerant of 'alternative' liasons on home territory (what they get up to abroad is mind boggling). No doubt we shall see the vid on You Tube in due course!

'fraid not .... actually over here for a week's biz

cynic isn't VIY one of your least favourite shares, amazed you still hold them?

it's certainly one about which i keep very quiet, for though the idea and technology is obviously very clever, as with all such things, it takes an age for them to reach maturity.

my holding is modest and has been lining the sock drawer

Odd isn't it that (recent) IC says BUY and then the Co ann. Options are exercised.....result is Option holders get a 30% boost and recent PI-buyers are shafted.
Sorry, I'm not convinced any US-company should be here (even Main Mkt), let alone on the rather looser AIM. They may have "fantastic technology" (but it's software after all that - DYOR) and as we've seen with ANPR software is easy enough to re-invent.
I don't hold.
Sage is "software - but they DO have a loyal Customer-base and Sage is too small to shift from their "niche" - but the likes of Microsoft, or Google could wreck it at a stroke - - - er, IMHO.

Not odd if option holders are waiting for the next positive newsflow which is likely shortly.

The sp fell today(Monday) because these options were being sold (my interpretation), so it appears they don't expect any good-news too soon.

However, it might be MM's dropping the price to cop some of the profit, if the option news generates more Short-term sellers...

2010 will be the year for viy .

RNS "The Company has allotted and issued 457,015 ordinary shares of 1 penny each in the capital of the Company following the exercise of options held by former employees of ViaLogy LLC, the Company's wholly owned subsidiary.

The Company has made application for the 457,015 new ordinary shares of 1 penny each to be admitted to trading on AIM. Admission is expected to occur on 29 January 2010."

London, February 10. ViaLogy plc (LSE: VIY)announces another successful well completion, this one in the Permian Basin in Central Texas under contract to Vecta Oil & Gas of Dallas, Texas. Drilled to a total depth of 8,175 feet, log analysis shows net pay from multiple zones, including stratigraphic Wolfcamp carbonates and the deeper Cisco sandstone.

This marks ViaLogy's first product for Vecta in a project that will both stress and refine ViaLogy's QuantumRD technology in difficult hydrocarbon zones in their Permian prospect. ViaLogy delivered analysis that chose the position of the well to penetrate two pay zones; the Wolfcamp carbonate formation at 5,800 feet and the Cisco Canyon sandstone formation at 7,780 feet. The firm's QuantumRD active signal processing technology is able to exploit all seismic frequencies, and to extract significantly more information from seismic data than other analytical methods. This information is used in conjunction with related well logs, coring data, and production histories in an end-to-end analysis methodology to estimate sub-surface characteristics. In the Vecta prospect, ViaLogy accurately positioned the well, predicted multiple high impedance geobody (HIG) pay zones, and their porosity - all subsequently verified by actual well logs.

ViaLogy CEO Robert Dean said, "We are pleased with our continued positive track record of successful wells. Keep in mind that each of our applications of QuantumRD thus far, including this continuing work for Vecta, has been against a very difficult reservoir characterization problem. I believe this will extend the reach of our technology and further validate it. The Vecta team has proven to be great partners, and we look forward to bringing them more successes."

Looking good......as market recovers and in time the sp will climb to 10p and perhaps more.

Its hard work getting back up to 8p .

RNS confirms technology successful we await more specific news about the value of their share of any oil/gas discovered.