Thank you for directing attention to this, as IMO it deserves a great deal more consideration. Read it carefully, twice - three times. It requires thought....

"We recently entered into a joint venture to which we are transferring relevant portions of the patents and assets formerly held by HNI. That entity will engage in the secured pathway system business, using the Holocom trade name that was acquired as part of the foreclosure process. The major portion of the interest held by HNI in the multi-domain computer business, which is in the early stages of development under a license from the original inventor, is likely to be sold soon to a group that has expressed interest. It is anticipated that a 10% interest will be retained by our joint venture entity."

What I think it is saying (i.e., purely my interpretation - but I'm usually pretty good at it) is that they got together with some of the (sharp) recently unemployed HNI folks and formed a JV that possesses the patents and assests necessary to further that business, with strong financial backing (something the old HNI obviously lacked). They're retaining the Holocom name, which is good because there must be some name recognition if only via the contract they had to patch/refit the Pentagon after 9/11. Their focus is on the secured pathway system business, so they are selling most of the multi-domain computer business - which means income to the JV, and perhaps more than we paid for Holocom in total, but at least a significant offset. And sense there is at least a reasonable chance of success for the entity buying the multi-domain computer business, we're hanging on to a 10% interest via the JV, which BTW I think we essentially own. The cost of all this is not entirely clear to me, i.e., did they have to shell out any more than the $770K loan amount? Much more? I suspect they're into this for around $1M total. Worth it? For that piddly amount (or even twice that amount), the associated risk is insignificant (which as some may recall, was my BIG problem when there was talk of an acquisition - introduction of significant risk - assuming a much higher price tag).

Okay, so now you will have to read my interpretation twice, three times (more meat than spuds). IMO, they did their DD (and didn't pass on this one like they say they did on another "opportunity"), probably knew/talked to senior engineers/folks at Holocom, and grasped an opportunity that was real. It shouldn't take long for the JV to get rolling - probably a lot of the same key folks, same equipment, maybe even the same digs. And the JV will get a kick-start of cash infusion (not OUR cash, necessarily) from the sale of the multi-domain computer business to a group that they ALREADY have lined up.

I'm sorry, but assuming their DD was as good as they suggest and there are customers for secured pathway systems (in this day and age - duh!), this whole arrrangement is brilliant, IMO. Alternate revenue streamS. Exactly what so many have bitched about our not having.

Then the China initiative, this time with money to back it up (which can make ALL the difference).....

Yet so many seem to have missed this part of the letter....though they imply a greater than 110 IQ. I'm in EDIGOKIE's 150+ camp, and you got my interpretation, albeit with some assumptions thrown in (but reasonable assumptions IMO).

Too bad so many will not fully grasp this....

And I KNOW nuttin'!

SGE

PS: Next novel to hit the shelves soon!