Grupo Resilient International Inc (GRUI): Shareholder's Meeting Summary: Hey ev...

Grupo Resilient International Inc (GRUI)

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THEKOOKBOOK

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Saturday, 10/22/2005 1:37:33 PM

Saturday, October 22, 2005 1:37:33 PM

Shareholder's Meeting Summary:

Hey everyone here is the long awaited report from the SHM at the Ritz Carlton in Atlanta. I was very impressed on the whole with how the meeting went and I did get the answers to our questions from Frank Moody, Ian Riley, and Adam Clough.

First we got there and signed in at the registration table where they had personalized nametags for everyone as well as some free stuff (shirts, cups, HISC waterbottles, etc.) All very nicely done. Then we walked in had a seat and the show began. The speakers would speak and then questions would be asked from the crowd...it was a good format.

First Speaker: Paige Siplon (director of the MLIC)

Key Points -

- HISC is doing what nobody else is doing with the Cyber Tracker in terms of its capabilities (will get to more on that later) and ruggedness.

- The testing was done with the Georgia Ports Authority in a rela environment in Savannah which proves that HISC's products can and do work

- The pilot test is completed and Mr. Siplon was impressed with the results (whitepaper)

- Mr. Siplon enjoyed working with HISC management and said that they were all very good at what they do and that they could sell anything successfully

- Question from audience: "Is Savannah Port going to buy the products and system from HISC?" Mr Siplon said the Georgia Ports Authority is interested in purchasing the products and applying them and he kind of talked around it. But then he joked and said "was that answer vague enough?" I get the feeling that HISC and Savannah are still in the works in terms of a deal so they were not at liberty to say.

Speaker 2: General Pierre H. Georgio (Pro-Sec)

Key Points-

- gave his background information and how he started Pro-Sec from nothing and made it into a 5 million dollar company (the guy has quite an impressive resume I might add)

- The Cyber Tracker is the best system that he found when looking for GPS tracking in terms of its capabilities: he said "The Cyber Tracker can do many other things beside the GPS: it can detect if the car door is opened or even if someone sits in the driver seat." (I was unaware that the tracker was able to do these things but after a talk with Adam Clough later he informed me that these were upgrades that the trackers specifically for General Pierre would be capable of doing. Also he said they are working on a system for the General that can shut down the car when Geo Fence boundaries are violated. This would keep people from leaving the country with rental cars.)

- Quantum Sniffer is his favorite at detecting explosives because it does not give as many false positives and is very good.

- He believes that his company (Pro-Sec) will continue to grow throughout the Middle East (which would mean that HISC would definitely see repeat business from this company)

- No questions were asked for the General...I had one but saved it for Mr. Moody in the afternoon

Speaker 3: Barry Bennet and Spencer Greissenger

Key Points -

- Barry Bennet has taken a temporary position in Ohio with a Representative so Mr. Greissenger will be filling in for the short term to work on getting HISC gov't sales.

- Gave his background on his history in D.C. and some of his key contacts

- Feels that both the Sniffer and the Tracker have a place in the gov't market. (his example: The state of California owns like 90,000 government vehicles and last year they could not find 30,000 of them! A perfect place where the Cyber Tracker can help out)

- Selling to the gov't is hard and time consuming but Spencer said he has good solid contacts in the Department of Homeland Security

- Said he can make no promises but he will do his best to get HISC's technology in front of the right people in D.C. He also said he is confident that HISC will get on the GSA (to sell to gov't) list he is just not sure how long the process will take. But if he is succesful at getting HISC in the door he said it can easily start the domino effect where everyone ends up buying together.

- Questions from audience:

-How long will GSA listing take? It is a long process and the gov't is being more careful these days about what they buy because they don't want to waste taxpayer's money. The gov't has been burned on technology in the past so they are very selective now. Again he said he was confident that HISC would get on the list.

- I asked if there would be any working relationship between HISCand Spencer's company SEG consulting. He said that they have not worked out any deal and at the moment he is just filling in for Bennet. This kind of suprised me becuase I was first under the impression that HISC would become a client of SEG but that does not seem to be the case at this point in time. Mr. Greissenger knows the right people though and he can definitely help HISC in D.C.

Speaker 4: Tom Mitchell (CEO of Actsoft)

Key Points-

- gave a powerpoint presentation on history of Act Soft and the development of the Comet Tracker

- ActSoft started small but got big. Their first major deal with the Comet Tracker was in 2003 to the Mass. Highway Dept. where they sold about 3,500 units which was half of the yearly sales that year. (2003: 7,500 units sold / 1.7 million in revenue)

- 2004: 20,000 units sold / 3.3 million in revenue)

- 2005: on pace for 6 million in revenue

- 2006: looking to exceed 25 million in revenue for the year!

- ActSoft achieved this massive growth through the help of Nextel, now Sprint. Actsoft only has 22 sales people nationwide but they went out and trained Nextel and Sprint sales people how to sell the Comet Tracker and what applications it can be used for. He said this increased the sales force to between 3 and 4 thousand people. Now Act Soft working directly together with Sprint to sell the Comet Trackers, because it also sells more phones for Sprint. (This relationship that Act Soft has with Sprint is going to be huge for HISC's success as well with the cyber tracker)

- Almost any company can use the Comet Tracker or Cyber Tracker depending on their needs:
Both Trackers
- increase efficiency/productivity
- reduce operating costs
- insure worker and asset safety

- Tom Mitchell: "So why is Actsoft an already profitable company excited about working with HISC?"

- Cyber Tracker will open new doors for Act Soft (Act soft has customers that are interested in permanent mounting tracker systems, but their system is not as good as HISC's Cyber Tracker and it is more expensive too)
- Act Soft knows how and where to sell the Cyber Tracker which will increase sales for both parties
- The Cyber Tracker is priced right for the market
- HISC brings global marketing opportunities to the table for Act Soft
- This acquisition should accelarate growth exponentionally for both parties

(Tom Mitchell is the best thing to date that has happened to HISC and I believe with this guy on our side we can't go wrong)

Speaker 5: Frank Moody (CEO)

Key Points-

- All relationships have been good for HISC
- W/ Paige Siplon
- General Pierre
- Bennet and Spencer Greissenger

- HISC is working on deals in Canada with a reseller
- Guarda Security (can't find anything on it but
don't know how to spell it!)
- multi thousand unit order in the works

- HISC also working with a reseller in European Market but he did not mention any specific company name

- HISC is going to be huge within the next 2 to 3 years

-Finished with "HISC is not a pinksheet company it is a Nasdaq Company that is just not there yet."

LUNCH BREAK

Then the Product Demonstration began and this is where I talked to Moody, Riley, and Adam Clough

The Product Demonstration was cool because we got to see all of the products hands on and see how they worked. To see the pictures and comments I took from the product demonstration go here: http://kookbook.blogspot.com

Finally I got to talk face to face with Moody and company and get the answers to the rest of our questions:

Here is the list:

1) When will products be shipped and payments received?
-Products will most likely not be shipped until Jan. of 2006 and payment will be received in full upon shipment.

2) Were there any new orders from Maritime Expo or trips to London and Central America?
- London has to do with the reseller in the European Market but Mr. Moody would not elaborate any further on that
- Also HISC is working with a Candadien Reseller at this time which is being worked through Adam Clough

3) Will HISC run any commercials or advertising campaign?
-Mr. Moody and Mr. Riley said that they are already working on it.

4) Does HISC expect to sell CYber Trackers in the Sprint stores?
- I actually missed the question and forgot to ask but I think what Tom Mitchell (CEO of Actsoft) made it clear that Sprint in the end will help push the product as they now do with the Comet Tracker. Actsoft's relationship with Sprint will be big for HISC in my opinion.

5)Estimated contract value or expected price range for a port system?
-Both Mr Moody and Ian Riley answered this one and said that it really depends. The System is so versatile and there are so many components that go into determining what size system is needed that it is hard to tell. But he said he would throw out a number just for fun. (5-10 million)

6)Is a shareholder vote required to convert shares?
-Yes but no...HISC controls enough shares internally to do it without our approval.

7) If all shares were converted what would be total outstanding?
- I didn't even ask this one because it is just a math problem and I am sure Mr. Moody would not have known off the top of his head but someone can figure it out ourselves we have all of the conversion ratios on the preferred shares

8)I changed question 8 to read: Is the approval of the export license the only thing preventing HISC's orders from being shipped? Are we ready to manufacture on a large scale?
- The export license approval takes about 90 days according to Mr. Riley. It was filed on Sept. 12th, so that puts it's approval somewhere in the neighborhood of the middle of December. This works out because HISC is not ready to manufacture on a large scale until December so when the export license is approved HISC should already be manufacturing the orders and they could be ready to be shipped at the beginning of January.

9) Know County School System slated to take delivery of its first Cyber Tracker at the end of this year is this still on track?
-Yes...Mr Moody said he thinks it will be somewhere around the end of December possibly January that this will take place.

10) How many trackers are to be tested by South Carolina dept. of Education in Jan 2006? Is it still on track?
-I forgot to ask how many but Mr. Moody said it was definitely still on track and the dates have not changed.

11) How many of the Ports does HISC expect to be major bidders for the system?
- It is too early to tell. HISC's whitepaper was released a few days ago.

12) Will the Savannah Port be the first buyer of the system?
-No direct answer but Mr. Siplon said they were very interested. I did not ask this to Frank Moody I kind of got into a conversation with him and got a little off track...but I did get the most important question answered #15

13) How does the patenting work in terms of selling cyber trackers?
-HISC when it is all said and done will have between 5 and 7 patents for their products. They do not have to pay royalties to any other companies upon sale of a cyber tracker.

14) Who is HISC's biggest competition?
- IBM no real threat with the RFID technology as it does not have half as many capabilities of the Cyber Tracker (what I determined after talking to Adam Clough..The Cyber Tracker is unbelievable. They had a big display screen showing what the tracker does and it is incredible. There is color coded alarms and you can set multiple geo-fencing boundaries all with different colors so when an alarm is triggered you will know right away what boundary has been broken. Also it tells you the speed, time, and direction of vehicle at every waypoint on the map (which is updated every 3 seconds). If you put this in your kids car at home you could say to them: How come last night at 5:47:07 p.m. were you going 37 in a 25 while traveling down Main St. heading East? What does you kid say to that? LOL Imagine the possibilities with companies knowing exactly where their employees are and what speed they are traveling...the technology was impressive.

15) Why did HISC's Authorized Shares raise from 1 billion to 10 billion?
-The company's lawyers recommended that they do it in case of future acquisitions or mergers. For the last time for the love of god no reverse split will occur here so stop trying to start rumors. HISC has no plans on releasing anymore common shares onto the market. No more common stock will be sold by the company. I then asked where the 30 million shares for the Act Soft acquisition would come from and FRank Moody said they would come from the 10 billion authorized but they would be preferred and restricted shares, not able to be converted until at least 2 years from now, which I think we will all be rich by that point and won't care.

MY FINAL THOUGHTS

The SHM was a very good event. THe products are real people, the sales team is real, the company is going places. But it is going to take time. THe PPS is not going to take off in the near future in my honest opinion but HISC appears to be a very sound and solid company. Everything is lining up like it should be and HISC's wheels are about to begin rolling. My guess is that we will see a sell-off from the speculators and daytraders in the weeks to come but no one will get any more of my shares. I am riding these freebies for a long time! On the whole I was very impressed and feel much more comfortable holding my large position in this company and I will continue to do so.

remember pics are at http://kookbook.blogspot.com

If anyone has any individual questions you would like to ask please let me know...and if anyone here was there and you were wondering who I was, I was the respectable one of the group of people that did not look like they belonged there. If you were at the meeting than you will know exactly what I am talking about...lol

The Kook Book