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.

why not smile like i do ..... ok, so i covered my arse with some judicious index shorts, but that does not get me through unscathed either ..... in fact, having liquidated a few positions over the last couple of weeks, have actually been out buying ..... LEAD yesterday is well named! .... silly billy cynic got greedy and deservedly bitten

I am smiling - having made a nice little profit on IGE this morning.

from a d v f n

-Here is the transcript of the AGM presentation of Sandeep Gulati, Chief Technology Officer at Vialogy.

-Very interesting to note that there is yet another development underway that wasnt mentioned by Bob Dean in his presentation, namely the pilot for Environmental Monitoring.

-Given the number of reported initiatives, trials and tests underway, which is at least 6 , and I reckon you could call it more like 10 plus to account for those where they are unable to say anything at all, all of these with global companies or Government agencies,then I reckon we must stand a very decent chance of significant positive news from these activities looking ahead, any one of which could be a company transforming deal.

-Re these notes,please bear in mind SG (as was BD in his presentation) was talking us through various slides, which clearly we dont have the benefit of.


Sandeep Gulati, CTO of Vialogy

AGM presentation, 30th October 2007.



So Bob mentioned focus focus focus, this is Vialogy today, this is our focus, basically all our technology today if you are a customer you have to get it buy either buying SPM or mSPM, or again, from next year the product MPEX.

One element, a year ago when we had the AGM we were working on SPM, we mentioned it, mSPM did not even exist. Basically some time in December last year we decided to take a core technology and turn Vialogy into a hardware platform company , design the product, build the product, launch it and test it. So today the product has gone out in tests, so this is where we are heading and moving on essentially in 2008 we will bring MPEX, the electronic eye, another product.

About the value we provide, what weve found in the the last two years , all the customers globally, they all want today a single point of management for sensor security and all the operations and generally, which comes down to monitoring remote facilities, making sure we have got access control authorisation, trying to ensure business continuity in the event of disaster,weather, fires, floods and also what has become important is operational efficiency, not only doing surveilllance security but building management, building operations, all from a single source, a single box, thats what SPM does.

This could be in a facility like this with lots of computers, it could be in a room, it could be on a lap top or a cell phone. A single point of control.

And what SPM has done is essentially in the past these problems have been there forever and as networks have come the company has had to buy one system for building management, another one for power maangement , a third one for video security and what Vialogy are doing with SPM is building a single product which can integrate over networks all of these applications through a single point of control and manage them seamlessly. This is our market and these are our customers, managing all of them together from one central control panel, whereas today all of those things have to be accomplished seperately.

In 2007 we launched our testing of SPM globally. Today at the AGM, Vialogy teams are in three different countries testing SPM, deploying it and seeing how it is performing.
All our partners, we have focussed on a few companies, all fortune 50, fortune 100 companies, all global operations , and providing them a product where they can tie different facilities from a point of control which can be anywhere, they can control the infrastructure and within seconds basically get to see an event , plan responses and then monitor as the responses happen.

One of the biggest differentiators competatively has been to build a sensor adaptor in 72 hours, so for our customers we are guaranteeing that if SPM is going into the environment where there is a new sensor, and new protocol then in 72 hours we will make sure we can integrate it, deliver it and make it part of the operations. That speaks for the product readiness, the maturity and the scalability.

They look like different sensors but the reason Fortune 100 companies are working with us, talking to us, is because even though we are a very small company, 35 or 40 people, we actually have people with experience in the physics of all these different sensor types, thats one key element for us. Normally you have to go for a company with 5000 people to find someone who undertsands and knows radar, radiation sensors, RFID, very very few companies touch all these sensors, Honeywell is a good example,theyve got 50 divisions, Johnson Controls. So for a company like Vialogy, what weve done is having the expertise and the physics of all of the sensors, built a product, put it in a box so that life comes down to handing out SPM servers and scaling.

Just a picture, we have put it in boxes, we are also in routers. The old IBM models used to be you put in a sensor and tie everything into the server, where we are headed is we have gone to network based computing, let our technology go directly to network devices, going into the routers, which is the invisible fabric that ties facilities, so thats how we are integrating and getting scale and getting into sensor networks.

Basically a picture of (military) base protection, we talk a lot about it. Same elements, lots of sensors, thousands, water area, land airborne, dropping SPM to the point of control and tying them all together.
At this point in time SPM is becoming a premium gateway for chemical, biological nuclear and explosive sensors, but whats important is if we go back to our market, the water and the food protection it is some sensor in this category which is being used but the product is allowing us to scale and scale quickly.

This is generally a picture how in the real world a product ties together , SPM talking to lots of mSPM, which is our hardware cameras and very very cheaply, a tenth or fifteenth of the cost of legacy deployments, get good sensor coverage.



This is a pilot we have just started off, using SPM for environmental monitoring, a different application
Environmental compliance.
What happens is you get 10 inspectors covering a whole state, they go twice a year to make a measurement and then write a report. What SPM does is it gives the ability to do this 24 x 7, continous monitoring and very cheaply.


And finally this is our product road map this is what our customers see, our partners see.
We went from SPM software, we moved SPM called SPMedge into routers, built mSPM, which is a card for video processing and then taking elements of this hardware with QRI and license that as nano SPM which can go into cameras and other sensors .

Thats our product focus, we have a price for these elements and thus we are trying to grow our revenues.
Thank you.

This company undoubtedly has enormous potential and the question is when will they turn this into contracts and revenue?
Well this time could be a lot closer than some people think,according to Bob Dean at the AGM ,could be before 4-6 months.

But, in the meantime, likely to drift lower. Could be a possible in the New Year.

Still watching and waiting to see if I can pick them up around 6p.

Getting closer to a better risk/reward at 6p

getting close to my forcast now

which forecast was that? .... 6p? 4p? 2p?
anyway, i cut my losses the other day (ditto GOO) as, at best, i don't think the stock is going anywhere meaningful north in the immediate future or even in the next few months, so i reckon my cash is better placed elsewhere.

Buy order set at 6p

cynic put your cash in emblaze, the safe haven in stormy waters

a blast from the past .... made and lost a fortune there ..... will revisit

Better option BRR.

BRR is certainly steaming ahead!

Buy order got close i see , 6.19 to 6.25 before moving up .

FLIPER, the eternal optimist lol

Looks like i missed the chance of buying more around 6.25p

MG fill you boots , buying at 5.9 p

No rush fliper, not much happening until 2009 IMO. Prefer to wait for 4p ish.

FLIPER, fill your boots at 3p

Oh dear, this is looking anything but a wealth maker at the moment! I would not like to have to sell my shares right now - got in too high! Yet it all seemed so positive at the AGM, and others who attended clearly thought so too (from what I've read on other boards). Could have used the money elsewhere.