Mosaic ImmunoEngineering is a nanotechnology-based immunotherapy company developing therapeutics and vaccines to positively impact the lives of patients and their families.
Message: Remember the '09 shareholder conf call
Stan Caplan:......................
......Think about this. There was approximately $9.7 million flowing to Patriot from the MMP licenses. We didn't need any employees or overhead to collect that $9.7 million, but look how much remained on the bottom line. After management's investments of our money, there was only $881,509 of net income. That's right; less than 10% of our licensing revenue.
Now, these results tell a very clear story. Either our management has not exercised proper due diligence when analyzing our investments or they don't know how to manage the investments they've made, or both.
Some shareholders want to blame the Board of Directors, but I say the Board's blame is hiring the current management and letting them stay this long.
However, the wisest thing the Board did was to request an assessment from qualified third-party Greg Baroni. Surely, Mr. Baroni's recommendations will include who should be or not be on the management team and the uniqueness, value, and validity of the Crossflo products and services.
When the Board gets this report, they have two important considerations -- one, Patriot's business failures in the last 1.5 years; two, Mr. Baroni's analysis. Now, if number one and number two are consistent, and I'll bet you all my Patriot stock they will be, the Board comes into the spotlight. And if the Board does not make immediate changes, then they are the problem and are negligent and should answer accordingly.
So, Rick, here's your two-part question. Based upon your performance since 2/28/08 and the 10-K results, what have you accomplished to date to enhance shareholder value? And the follow-up is how many quarters, in your opinion, should the Board of Directors of a public company allow a CEO to reach profitability and enhance shareholder value? Thank you.
Rick Goerner: Okay. Well, Stan, I want to get to your question, and you bring up a number of points which I think are pretty clear from our releases, but let me address two bits.
Number one, our first acquisition was accomplished 11 months ago with Crossflo, establishing that as the platform for our data sharing strategy, and that was followed then two months later by the addition of the Verras Medical activity for the healthcare application, and then as recent as March 27 for the Vigilys acquisition from Kratos.
So while we were chartered to launch an M&A strategy nearly a year-and-a-half ago to invest the proceeds of the MMP portfolio into establishing a strategy for creating an operating company, I think that we have executed to that vision in terms of providing both a strategy to build from off the data sharing technology, and I believe, in retrospect, our focus in healthcare and public sector is very well aligned with where the market's going.
As we've acknowledged in the reports, both as a result of budget issues that we did not contemplate and as a result of changes within different states' priorities, that it has been more difficult for us to realize the revenue plans that we forecasted, and we've obviously reviewed those activities with the Board, and we believe that we do have a large and growing sales pipeline of opportunities that will generate the plans that we originally forecasted for the entities, and we're confident that the current initiatives are ones that will generate revenue because our customers are asking us for increased involvement on new projects.
Stan Caplan: Okay, may I have your response to Part B of the question?
Rick Goerner: Which is how many quarters?
Stan Caplan: Right.
Rick Goerner: I think that -- I don't speak for the Board certainly, but I would suggest that independent of a formula, because I don't think there is one, I think that the strategy of the Company needs to be assessed, and I think that if the revenue results don't materially come together in the next six to nine months, that obviously things will be different.
We believe that that will not be the case. We're pretty comfortable with the sales pipeline that we have developed, and at this point, I think the Board has been supportive of the efforts within PDSG on an expanding basis to do the marketing initiatives and do the product development efforts that we've acknowledged to the Board need to be done to position the Company going forward.
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