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.

Senior appointment made, price could rise a tad as VIY progresses towards next stage of company development.

The appointment in itself shouldn't add too much value to the company yet, as this will accrue through proven sales and growth.

Should certainly help to clinch some deals next year. VIY now have a very experienced team of people in the key positions so: keep watching!

VIALOGY PLC

APPOINTS HEAD OF SALES & MARKETING


London, November 30, 2007 -- ViaLogy PLC (AIM: VIY), a leading innovator of
network-centric, real time signal processing platforms for sensor applications,
today announced the appointment of Mr. Robert Kern as Vice President, Sales and
Marketing for its wholly-owned American subsidiary company, ViaLogy LLC
('ViaLogy'), of Pasadena, California.


This senior appointment reflects the transition of the Company's activities from
research and development to the commercialisation of its products. Investment
is being made to establish and develop a strong sales and marketing team to
support the roll-out of ViaLogy's products, initially SPMTM - Sensor Policy
Manager, MicroSPMTM and MPEX Electronic EyeTM.


Bob Kern joins ViaLogy from the Science Applications International Corporation
(SAIC), a global systems integrator and technical services company, where he was
the Vice President and UK Strategic Account Manager. Previously, he had senior
business development responsibility for SAIC's Defense Intelligence and Security
business and also ran an SAIC business in Europe with several hundred employees
in seven countries. Mr. Kern has also held senior sales and marketing positions
with Silicon Graphics, Sun Microsystems, and Autometric in the intelligence and
security business, serving both commercial and government markets. During a
distinguished career as a US Air Force Officer, he led efforts to develop field
intelligence and integrated security systems and architectures for battlespace
management.


Commenting on his new position, Bob Kern said:

'I am very excited by ViaLogy's potential, its technology and value proposition.
I look forward to developing our sales channels and partnerships with system
integrators to incorporate our sensor policy management software and hardware
products, which are designed for safety, integrated security, surveillance and
business continuity applications.'


ViaLogy's CEO, Robert W. Dean, welcomed Bob Kern as the company's newest senior
executive, saying:


'Bob brings to ViaLogy a deep understanding of our customer and market base, and
an on-the-ground appreciation of how ViaLogy's unique technologies will play in
future government and commercial integrated security solutions.


'Today, in cooperation with a number of global blue-chip companies we are
supporting multiple sensor integration field trials. Bob's international
experience will be key in driving our sales growth.'

I was expecting news by xmas on the broadband trial .

another stinker where i am pleased to have bitten the bullet at a rather higher price

Fliper: there's always Monday... But clearly it's all been delayed I reckon. Perhaps we can pick some shares up again at 5p after all? 2008 should be a better year for them - though I'm sure Cynic will want an explanation for my optimism.

explanation? ..... why? ..... you're a girlie and work on intuition.
when it's wrong, it has to have been the moon's influence!

There's male logic for you!

better logic than expecting reason from the cosmos, even if somewhat apposite for a blue sky company

Steady guys! What happened to 'the season of good cheer'?

fear not harry ..... 'tis only a little harmless joshing

Hi Harry: have a Merry Christmas. And just to reassure you that it's just a bit of harmless banter, may I also wish Cynic a very Merry Christmas. - And thanx for all the fun guys!

A Happy and Prosperous 2008 to All :o)

Merry xmas and happy new year everyone.

Since the end of the period to which this Interim Report relates we have
considerably strengthened our management team. In particular, we have a new
Chief Executive Officer, Dr. Robert W. Dean, who is also President of our
wholly-owned US subsidiary, ViaLogy LLC. Robert comes to us from Science
Applications International Corporation (SAIC), where he was a Senior Vice
President. He brings a wealth of experience and business acumen to ViaLogy. In
addition, we welcome Robert Kern as Vice President, Sales and Marketing, and
Hugo Freuhof as Vice President, Operations.



We have also strengthened our Board of Directors, with Peter Reynolds joining us
as a non-executive director. An international businessman, Peter is on the
boards of a number of quoted companies and has considerable City experience.



In the Spring of 2008 we intend to launch ViaLogy's second product, MicroSPMTM.
This is a hardware platform for autonomous high definition digital video
processing. It is powered by ViaLogy's patented signal processing technology,
Quantum Resonance Interferometry ('QRI'). Other products, including MPEX
Electronic EyeTM which we are developing with the Boeing Corporation, will
follow.



We are dealing with international customers, who have long established
reputations for quality to protect, so the testing process is rigorous and
detailed. In each case the incorporation of SPM has so far proved entirely
successful and in two instances we are in detailed pricing negotiations, which
we are confident will lead to profitable contracts for ViaLogy.

agm presentation documents now available

http://www.vialogy.com/index.php?page=agm-30-october-2007

if anyone went to AGM, perhaps (s)he would like to repeat what the CEO had to say about a timetable as to when VIY would become either cash positive or even move to (true) profitability .... if this was not forthcoming, and i suspect it was not, then you are still (currently) investing in a pig in a poke, whatever other fine noises may be being made.

yawn......
oh dear, cynic completely loses the plot......never mind.....

so i take that there is indeed no such timetable .... in that case i suggest you read properly what i wrote and not what might you so imagine

ok, give us the benefit of your vast experience + tell us why this is a pig in a poke?
Does that apply to all unprofitable co's, or just ones you have lost money on?

I suspect you know the square root of bugger all about Vialogy.

at the moment, VIY is working with some very interesting ideas (even if i do not pretend to understand them) and liaising with some very high profile and potential clients ..... however, until such a time as VIY have proved they have something that has genuine commercial application which, as far as i can determine from what is written here, they do not yet have, then VIY is purely a promising but nevertheless blue sky company ...... one could say much the same about SEO, and we all know what happened there!

on the positive side, VIY announced ...... In each case the incorporation of SPM has so far proved entirely successful and in two instances we are in detailed pricing negotiations, which we are confident will lead to profitable contracts for ViaLogy ...... but there is still no indication of timing in that statement, let alone how profitable these individual contrcats might be, and assuredly not when the whole company may become profitable.

a company cannot run indefinitely as a loss maker .... sooner or later, and the former is the more likely in the current climate, the banks or whoever is financing will get fed up if there is no clear sign or timetable to profitability.

i have not said that VIY will never come good, but as it stands, it is still just a pig in a poke .....

patently there is no rush at all to chuck money into the ring ..... trying to get in at the sub-basement of every promising company is an absolute mug's game, as most will stay there or even be cremated.


now explain to the world why this is such a hot investment at this juncture?