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Message: Re Concerns

I hope this helps ease some worries.


Concerns:
1) SHH have met with all the big boys and not 1 has signed a deal.

Nick is, was, a lawyer. When he met with the BIG BOYS he was coming from a place of little experience. Nick hopefully has learned from those trials. As you have mentioned in your Pro’s guy from L’oreal is actually sitting in on all negotiations from now on. That is huge IMO. Now Nick will not be rail roaded and over looked as a small-timer with nothing to give. Mr. San Juan is the President and Chief Executive Officer of L’Oreal Canada. No matter what has happened in the past, a man of his qualifications and credentials will make the bigboys look more seriously at what Sonomax has to offer. It is still nto a guarantee that a deal will get done, but where they have fail in the past there is now new hope for the future.


2) The inability to close deals.

This concern is for all intents and purposes the same as your first concern.


3) The fact we have a 15-1 roll back possibility that could happen at anytime.

Ok, I hate roll back. I view then as weak. BUT let me point out to you a company that made a roll back work. BWR did a roll back in July or August and they have more than doubled since. I do not want to see a roll back, but if it is done from a position of strength then I could care less.


4) The fact we are an .08 stock with not much money in the til.

Sonomax has converted most of their debentures to shares. This has set them up for a possible debenture issuance in the future. As I understand it there is a rumour that there are a few money sources lined up to provide the money if needed. For Sonomax to strike a deal with a BIG player they may have to put cash on the balance sheet just to close the deal. If Sonomax does a 3 million dollar debenture to close a deal with the likes of Sony, Apple, RIM etc, then so be it. I will support that call!


5) The fact we have way too many shares outstanding,,,,,,,,look back at point 3

Out standing shares are irrelevant. We can not change the market cap of the company by rolling them back. It is what it is. If Nick hits his targets they we will earn $1 per share at the current share dilution. If he rolls it back 15-1 then we will ear $15 per share at that share dilution but the bottom line for my pocket is exactly the same rate of return. The only thing that will hurt my rate of return is more share dilution.

My Concerns

  1. Share Dilution, it could happen but is not the end of the world. It just cuts into potential profit for me.
  2. Chinese knock offs, this is a real concern. Some idiot from china can and will almost certainly reverse engineer this thing and produce a cheap knock off. It is critical, and I do mean critical that Sonomax develop and advertising strategy as soon as possible after a big player picks up a contract.



Pro's:
1) Understand they can't close a deal and have brought in professionals to help with that.
2) See huge upside in the high end blue tooth market with custom fit.
3) Custom fit works 100% and it is quite amazing.


***Having said point 3 under pro's, see point 1 under concerns, thus my dilema.

Thanks for your vote of confidence for the product. I have not yet been fitted but want to do so asap. Its nice to see and hear that others love the product!


Dec 14, 2010 12:09PM
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Dec 14, 2010 12:34PM
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