Before I start - Hello to Sunny (or Sonny) whom I met in Covent Garden this morning, who happens to be a tadpole holder from years ago and has a certificate hiding in a drawer somewhere and who actually called his broker while I was chatting to him to get an update on the price to see if this mornings RNS has affected it.
This was definitely a marathon of a meeting and not a sprint, but an awful lot was covered and it has to be said that it is a shame that there appeared to be less shareholders there this year than I have seen in the past. Guys you missed a very good showing from both GSD and Endeavors.
Prior to the start of the meeting I was introduced to Simon Keane from Shares Magazine, who seemed very interested in the Tad story and spoke with several groups of shareholders before we went in. He left after the presentations and before the 'business section' of the meeting, but I'm sure he has plenty to write about from that.
I did take notes, but as with any of these things, there was far too much going on to get everything, so a lot of it will come from memory and if anyone wishes to correct me on anything I get wrong please feel free to use the comments section at the end to do that. I really should brush up on the shorthand that I learnt 25 years ago and have never used since....lol
I also have come home to a couple of interesting emails, which I'll cover later if you manage to get to the end of this. Stick with it if you can.
Mark Ketteman was given the floor after meeting was officially opened and the welcome by the Chairman, David Lee.
Geospatial Division
There was a main presentation first followed by a question and answer session.
- Special mention was given to Ross Colman and Ian Cook who were both in attendance ( I think) for the demonstrations that took place after the meeting.
- The main focus of the geospatial division is the mobile market targeting the like of utility companies and others with a mobile workforce who are gathering information out in the field for their companies.
- The GIS market is currently worth in the region of $1.6 billion of which ESRI have a 40% market share.
- They made a conscious decision to choose to work 'with' ESRI as the global leader in the market instead of trying to compete with them.
- Through working with ESRI GoSync was developed and is marketed by Geospatial.
- In 2001 the division's turnover was in the region of 1 million and this had increased to 8 million by the end of the 2006 financial year.
- The Ordnance Survey contract and their Phoenix Project had been instrumental in this increase in turnover, but Mark couldn't confirm exact details of by how much although it was significant.
- The Phoenix project is one of the largest of it's kind in the world and these types of contract are not the type that will turn up every day.
- TCT was and always has been a cash drain on the company and this was the reason for it's disposal. They have tried over the years to turn this around, but it was just not happening. Mark's explanation for the steady news flow coming out of TCT is that they are in the position of having to try to create a market footprint and (not what he said but the implication is) they therefore have to make every little thing sound like big news at the moment. and the example he gave was the 2 promotions of internal staff that were announced, which may not normally be considered 'news' as such.
- They are very positive about the disaster recovery market which Iplan addresses and pointed out in particular the Bruntsfield Oil Refinery disaster and also the Texas Oil Refinery explosion. Both of these have highlighted the need for oil companies not to just pay lip service to their need for compliance with health and safety measures to protect their workforces.
As mentioned over on the iii BB 4 of Mark's slides had mysteriously disappeared into the ether, but this only caused him to pause for a few moments while he tried to find them, then he professionally picked up from memory where his slides had left off and carried on through where the rest of the slides picked up again. Well done Mark, it could have been so different.
I am sure I have missed out loads of information as there was so much given and it was really good to see Mark take the floor given the criticism that was leveled at him from previous meetings. I spoke to him about this just before we left (at bedtime lol). I asked whether he felt better for having taken more of a role in the meeting and he said he did as he felt that in the past people were mostly interested and asked about the streaming side of things, which in fairness he said was the right thing at the time given what was happening on that side.
OK so then it came to the question and answer session.
Nildes: Mark, are you going to reduce your salary?
Mark: That is not something that I am comfortable talking about and I would like to hand over to David Lee to answer that question. (not his exact words, please remember that a lot of this is from memory not just notes.)
David L: We as a company subscribed to an independent salary review and found clear evidence from similar sized companies in the same type of market that we are in the right ball park figures for the salaries that we are paying our CEO's. That's the market level of pay package and no board member or executive is responsible for their own pay package, this is decided by the board (exclusive of the board members pay package being discussed)
Nildes: Why is the GSD side of the company so quiet?
Mark: We try not as a plc to be seen to be ramping the company. Perhaps we have been too conservative in this, I'm sure we have been, but this is about to change. There are times when we should have been more actively promoting the company. We have been wrong in the past in not acting in that regard for marketing.
Asti: Has there been any progress on attracting business with other mapping companies around the world?
Mark: We have built up a number of skills through working with Ordnance Survey and in particular ESRI and have developed a set of skills that can be used with other mapping companies if not on our own product, through a quasi product of knowledge built up of the ESRI products. GSD are probably better informed about some of the ESRI products now than some of their own people and we can sell these 'skills' in that market. ESRI are releasing a new product and we expect to be marketing our skills along with this.
UGL: There was a recent announcement by TCT which also mentioned an enhancement to GoSync. Do they own the rights to any enhancement and if they do, if there was anything we wished to use that enhanced product for, would we have to licence that element from them.
Mark: Yes, TCT have as part of their licence from us, the right to enhance the product to fit in with their clients needs on an ongoing basis. They own any enhancements that they create not GSD and therefore, although I don't think there would be a case where we would want to use any enhancements they have created, yes we would have to pay a licence to them for that element.
Albie: You seem very enthusiastic about Brunsfield and the Texas scenarios.
Mark: The oil industry needs to prove compliance with Health & Safety and not pay lip service to their regulators and the resulting actions (litigation) following the Bruntsfield and Texas disasters has woken up the oil companies to their need to prepare for complete shutdowns from an external system if required as a lot of the problems with Bruntsfield were that they didn't know how much oil there were in the tanks etc due to the loss of the site resulting in the loss of their data on that. This is where Iplan fits in.
UGL: There was an article in a recent oil industry paper that mentioned that BP were discussing Iplan at a recent event. Have GSD been invited to attend events like these to talk about the product alongside the BP representatives.
Mark: I can't go into too many details about that but yes we have attended events of that kind. BP as a company operate in many sections or different companies within the main company. We have contacts from the bottom working up and contacts from the top working down to try to infiltrate the whole company.
Asti then asked another question which I'm sorry folks but I completely missed as I was trying to catch up with my own note taking. There was more discussion on this issue and that of getting into other oil companies but on the whole Mark's attitude was very positive about the GSD future. He admitted that GSD are a niche market player and will never have the size of market that potentially the streaming side could have but in saying that he had earlier said that this marketplace was worth around 1.6 billion, so I think a slice of that is worth having.
We then moved onto the streaming division presentation given by Peter Bondar, the newly appointed CEO of the streaming division.
I think in the interest of kindness to the readers and my aching fingers, I'll stop there at the moment to let you absorb the first bit and maybe post a comment or two if you want further clarification on anything I've written so far.
I need a coffee :o)
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Part 2
Streaming Division Presentation
Peter started off by pointing out a good representation of his team sitting up at the back of the room and suggested that he might get some of them to deal with any of the questions that arose out of the presentation.
I didn't catch all their names but I think those in attendance were: Art Hitomi, Bret Chandler, Neil Gardner (omitted previously - sorry), Martin Kirkby, Heath Gray, Tony Austwick, Richard (no last name, but I'm sure he has one) web consultant.
- Their goal is to be No1 in the streaming market.
- Peter pointed out that Appstream had only been given access to Stream Theory patents and not Endeavors patents.
- There are 2 Reseller Partners signing up with us. I think there was mention that one of them at least had formerly dealt with Appstream. One of these being Virtual Network Partners has 14 VAR's (value added resellers) who work with them and will be promoting AppExpress. There will be an announcement next week on this. [edited due to message left by annonymous - thanks for that] there were definitely 2 mentioned as signing up though, but I dont know who the other was.
- Endeavors have employed Jan Tarzia in the states to provide PR for Endeavors (not the group), whom Peter has worked with in the past. she will be coming to Britain in the next few months to start working with the UK press to get the key messages out to the market.
- They are marketing via telesales and targeted emails.
- They will be launching in the next couple of weeks a new website Stream 24-7.com aimed at the general public with up to 50 downloadable applications form the freeware sector.
- In Europe they have identified 25 of what Peter referred to as suspects for the moment rather than prospects, but they are managing to enter those at what he referred to as 'C' level ie CEO, CTO etc and therefore are reaching a good level within these organisations to promote the product to.
- We can expect good news within the next few days.
- They are reviewing their position in Japan because although they have Softbank on the books, they have not had much success in infiltrating any other companies up til now and want to concentrate efforts on where they can have success.
- The average sales cycle is 6-9 months in this market but in the past the worst case was 40 months.
- New leads like those generated at the MMS2007 Summit should be in the 6-9 month cycle and therefore we would have to wait for results to come through on any from there.
Questions and answers on this section were rather rapid as Peter said he wanted to break the land speed record on this in order to then get onto the formal business of the day and then get upstairs for the additional demonstrations of the products upstairs. Forgive me I couldn't keep up and also pay proper attention to what was being said, but I'll give you an idea of questions asked and their answers.
Q. You said that you were reviewing Japan as you only have Softbank in that area. What is the current position of the Softbank contract as we have not had any updates on it and we believe the contract was due to complete in March or June 2007.
David Lee: In Japan, they work more on the basis of relationships rather than contracts and therefore dates of contracts have very little effect for them. We do have a good relationship with Softbank and the business is ongoing. I will explain how the original contract was set up.
We had a deal with them to provide licences to them as and when they built up their client base for games streaming along with maintenance & support fees for those licences. We actually provided the last of those licences to them in about March this year and the maintenance is for a year from the licence date. Therefore for the last of the licences provided there would not be a renewal of maintenance & support billed for this until March 2008 whereby we would then bill them for payment in 45days. Ongoing maintenance and support is approximately 18% of a licence fee and they will continue with the licences (100,000) as they have an ongoing commitment from their clients for the provision of their gaming. We can therefore say that the Softbank contract is ongoing indefinitely. ( I think he said in the region of $1million ongoing)
Asti: In light of the Microsoft and Citrix deals are we talking with these companies with the view to future business with them.
Peter:We are liaising with Microsoft and having talks with them. The manner in which the patent issue was resolved was with a view to future contact and business and we are confident that this is an important relationship. It was due to they way the patent issue was settled that we were invited to attend the MMS2007 Summit which provided us with some very good leads which we are working on now.
Question: Do you believe we have sufficient revenue to pursue these leads? Do you have to come back to us for additional funding? (2 questioners, but I've put it together)
The answer was given in as much as; At this current time they do have enough, but they have made provision in the Resolutions to be voted on to make available additional funding if required without having to come back to us to request more. Blue Oar will be assessing the market and talking to institutions with a view to getting them on board and this may provide additional funding required.
A follow on question referred back to the GSD side of things was in relation to their funding requirements.
As GSD is a profit making division there is no immediate need for funding for that section as they can pay for themselves. If they became a loss making division then they would have to come to the group for funding, but they cannot see that being an issue in the immediate future as they have cut their cloth to fit with the losses incurred by the OS review of the Phoenix project. Mark could not be drawn on when that is likely to conclude, but he indicated that it was likely to be sooner rather than later (in which case I'm guessing that the GSD revenue would increase again assuming the project is to continue).
If you are reading the iii BB and the comprehensive reports that both Asti and Nildes have provided and also the SAG newsletter that Nildes put out, then I think we have pretty much covered most of what took place up to the point of the formal business taking place.
As you have already seen via the RNS issued. Resolutions 1-5 were passed, 6 was adjourned, 7 passed on a poll and 8-12 failed due to not getting the 75% of the represented votes cast.
These resolutions failed due to a no vote cast by a large shareholder (approx 20 million shares) on all the resolutions.
ImportantYou should note that resolution 6 is not something new in so much as the company request the right to raise funds through the placement of shares at each
AGM and they have the veto to do that currently within 15 months from the date of the last
AGM. What they are asking for is an increase to the amount they can place.
I stated while we were discussing this issue that if this was indeed the cheapest way for them to quickly raise additional capital to enable them to eg close an important deal or to ensure the signing off of the accounts at the end of the year, I would find that more acceptable than some of the other more expensive routes to raising capital.*
If you share the above view and you did not register your vote for the AGM, please make sure that when this comes up again in the near future, you make your voice heard. The company is from what was said, hoping to sign up enough business to not make it a necessity to raise large amounts of capital and therefore their access to the amount requested in resolution 6 may be the only hit we have to take. It's up to you.
Come back for part 3 later - I may also edit some other sections of the original post as more comes back to me, in which case I will add those in a different colour to make it easier for you to pick out.
*EDIT - If this resolution does not get passed then if they do require additional funding they would have to come back to us in the form of an EGM to do any other form of capital raising in which case it could cost us in the region of £13,000, (which was the cost of the postage for the AGM), just for them to post out the documentation for that to then possibly pass their request at a later date.**
**Edit - Of course the total cost for an EGM to raise money outside of the limited pre-emption rights will cost somewhere between £250k and £500k and take 3-5 months. Typical costs for an LSE plc. So we have a choice - pass the resolution to allow them access to funds at little or no cost or risk an EGM cash call later.
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Part 3
General Additional Information (Including other Questions and Answers that were interspersed throughout the proceedings)
Question: Is it perhaps time that Tadpole thought about changing it's name?
Answer: This is something that has been discussed within the board on several occasions without having reached a definitive conclusion at this time.
General comments from floor: It is perhaps less important that they change their name at this time with the cost involved with that, but it is of vital importance that when any news coming from the Endeavors Streaming Division is issued that it always has an add on that Endeavors is a subsidiary of Tadpole Technology. Anthony Whittal a former journalist, who obviously knows how these things work, knows that any news coming into a news room from the US is stuck on a spike and forgotten unless the person in receipt of it can see any relevance to the UK market. As it is Tadpole that is the UK listed name for the company then it should always be attached to Endeavors news releases. Anthony is still in contact with a great many of his former journalist friends and has offered to help make introductions for the new PR lady when she arrives in the UK.
A comment form someone who was involved with the putting together of the documentation for the AGM told myself and Asti that we are lucky in having Paul Tibble (company secretary) on board as he was instrumental in saving us around £13,000 in postage by combining the AGM, EGM, Finals and Interims into one mailing.
We sometimes fail to recognise that the employees of the firm are also trying hard to make this thing work.
I have heard also from several people including Mark Ketteman that Iain Cockburn our NED has been working very hard with the board encouraging them to be more forthcoming with information to the shareholders and markets.
I think there was a history of Tadpole having been scolded in the past for over ramping the company and this has resulted in them being over cautious currently. I also stated at one point that a company can be 'as guilty of understating their position to the market as overstating it and they had to try to find a middle ground that complied with the regulators but kept the market informed of their true position'. Iain appears to be the one leading them to the middle ground, so well done to him for the more open feel of this years AGM. Praise where praise is due. A company's success is never just down to one person is it.
Right - unless I can think of any other questions and answers I'll move onto the new public website Stream24-7.com
Stream24-7.com will be going live to the public in a couple of weeks time. I spoke at great length with Heath Gray, Tony Austwick and Richard (consultant) about what the purpose of the site was and who they intended to use it and how they would get the public made aware of it.
Again we can help with this. Heath is going to send me over some information to post at the time it goes live as they want to use blogs, forums, game sites, shareholders and any other method you can think of, to spread the word.
The intention for it is that they will have about 50 applications including open office applications games etc all free stuff for the public to try out AppExpress. The hope is that people will be trying it and enjoying its simplicity and speed at home and will go into their workplaces and talk about it and ask why their company isn't using it to download applications.
I have to admit I did suggest this to the company about 3 or so years ago saying that if you want to create a market for something, give it to the public to play with and they will create the demand. I'm so glad this is now going to happen.
The Appexpress client will not leave footprint on your PC or registry either if you use it then decide to remove it, nor will any of the applications that you use with it. The reason I asked this is I have been uninstaling applications recently from my PC and bits and pieces of them are left all over the system and in truth it has caused problems with other applications.
Also unlike ANY of the other streaming vehicles AppExpress will allow you to work offline with the product of your choice by downloading the whole application to your PC if you request to do so.
Another point that interested me because I have previously lost a hard-drive and therefore lost the use of a downloaded product because it was a year past the purchase date for redownload is that YOU are the registered AppExpress client not the physical PC, so if you have a system failure and get a new PC then you would just log back onto AppExpress and off you go again. Also because of this you do not even have to be at your own PC to use it.
With the inbuilt piracy protection it is also a suitable product for people who have developed a new game or application that they want to get out there to see if it works well to let other people test it but not steal the code.
They are also going to create other micro sites for specific companies for example Apple products or similar.
We spoke about them having Techoranti, Diggit, and Delicious buttons on the 24-7 site so that users can recommend it to those sites and the more hits those buttons get the further up the rankings the site will appear.
Other Marketing Initiatives
They are working hard on telemarketing and have managed to create a customer profile for the type of client most suited to the product so that they are not trying too hard to get into a company that the product profile doesn't match. Due to this they are managing to be more selective about who the sales team actually go out to and visit and are therefore maximising their available salesforce.
You may have noticed recently that they have put a counter onto their website too. This enables them to see where people are visiting from, whether it is a private individual or a commercial prospect and then they are target emailing these companies and using the data provided by the system to check which companies have actually opened the email upon receipt or ignored it.
They are also targeting 'C' level staff (ie CEO's CTO's etc as mentioned previously) at different times of the day to see whether they are more likely to open an email in the morning or at lunchtime or later in the day so that they can use that information going forward with future targeted mailings.
.........and so onto the couple of emails I had when I got home.
One was from Heath Gray saying that it was nice to meet all the shareholders and that he is going to get Richard to create an html banner for my website (I offered them free space to advertise on my site a few weeks ago) and also that he would be sending over some text for the live 24-7 site.
EDIT - Details of this email were ro-moved thanks to comment No7 - apparently it's a chinese spammer. Like I'd know that eh! D'oh. anyway name removed now.
Well I think I've covered about as much as I can remember and I look forward to getting some more feedback on it from you all and like I said before, I will update sections as and when more comes to mind. In the meantime thats kinda the 6 hours done and dusted........phew!!!!!
