May 2001

Compiled and written by
Gary Will

E-mail:
gary@garywill.com

Issue 51 -- June 4, 2001
In this digest:

1. Quack.com, Nexsys Commtech close Waterloo offices
2. Focus assets acquired by Japanese firm
3. Kaparel cuts back in face of telecom woes
4. Descartes grows network revenue; reports loss on investments
5. RDM CEO resigns after one year on the job

6. RDM builds imaging business; remains unprofitable
7. RIM receives mailbox integration patent, sues competitor
8. Com Dev sales slide with telecom slowdown
9. Virtek breaks even as quarterly sales decline
10. CME Telemetrix continues monitor development with Motorola money

11. GUARD sells cheap SignalGene shares to fund operations
12. Finline sales drop to new low in 2000
13. STOCK REPORT: Calm waters after the storm
14. Miscellaneous tidbits from Tech Capital Partners, Sirific, Dalsa, Agile Systems, Metiom, UW, Gensel, Endgame.

Quack.com, Nexsys Commtech close Waterloo offices
May 2001

Last August, I led off the digest with the story of how Cisco and AOL had both come to Waterloo through acquisitions. Less than a year later, they're both gone (or are about to go). Closely following Cisco's announced departure in April, the Waterloo research office of Quack.com, owned by AOL, was shut down in May. Most employees were laid off, although I believe that R&D director Dave Simons was reassigned to Quack's California office.

I don't have details on Nexsys Commtech, but its Web site is gone and its phone disconnected. The company hired a new CEO last August and two months later he told shareholders that he was suspending product development and "repositioning our product offering" because of a lack of funds. Nexsys' largest shareholder, Ztest Electronics of Mississauga, told its shareholders last fall that it had written off money owed to it by Nexsys.

Four years ago, Nexsys announced it was in trials with the City of Waterloo to install smart utility meters throughout the city. A thousand homes were supposed to be online by 2000, but the project never went beyond a 25-home demonstration.

Focus assets acquired by Japanese firm
May 22, 2001

The assets of Waterloo's Focus Automation Systems have been acquired by V Technology Co. Ltd. of Japan. Focus will now operate as V Technology North America with co-founder Ron Strauss continuing as president of the subsidiary.

Financial details weren't disclosed, but the holders of Focus common shares aren't throwing any parties and are expecting to lose their investments. I'm told the deal was made at fire-sale prices after Focus' bank chopped its line of credit and demanded repayment.

The company's largest shareholder had been VC firm Telsoft, which invested $3.7 million over three rounds of financing in 1997 and 1998. Ventures West and Bank of Montreal Capital put in a combined $4.5 million in 1998, while two Taiwanese VCs invested an additional $3 million in 1999.

Focus was founded in 1987 by Strauss, Jacques Houde (now Kaparel's director of engineering) and Eric Peterson (CEO of Mitra, which was spun out of Focus in 1990; not to be confused with Eric Pearson who was one of Focus' top engineers).

For the last couple years, the company has focused on automated optical inspection systems, primarily for manufacturers of printed circuit boards (PCBs). Its former core products, Webscan and Cardscan, were abandoned and sold off, respectively.

V Technology had sales of about $60 million in the year ended March 31. It went public in December and is listed on the junior MOTHERS ("market of the high-growth and emerging stocks") section of the Tokyo Stock Exchange ... the other TSE.

Kaparel cuts back in face of telecom woes
May 2001

Cutbacks throughout the telecom industry have forced layoffs and salary reductions at Waterloo's Kaparel, now owned by Rittal of Germany. The company's finance manager has also left.

Last month, Kaparel sent out a news release reassuring suppliers and customers that the closing of PixStream wasn't going to have any impact on its business. But while revenue wasn't significantly affected by the loss of sales to PixStream, the slowdown experienced industry-wide by the company's primary telecom customers have left an impact.

I'm told that with the Kaparel shares they received at a low price and their severance pay, those who were laid off should leave receive a good pay-out.

In its April release, Kaparel said that it expects revenue growth will return in the fall.

Descartes grows network revenue; reports loss on investments
May 23, 2001

For the quarter ended April 30 (Q1 02), Descartes reported sales of US$23.4 million -- up 73% from a year ago (102% once you exclude the now spun-off DSD business from last year's numbers) and 11% from the previous quarter.

Revenue from Descartes' logistics network continued to grow, as the company reported network revenue of US$7.8 million -- up 27% sequentially, and now contributing one-third of all revenue, up from 29% in Q4. The growth was due in part to the acquisition of BCE Emergis' transportation services in December, but even excluding the acquisition, network revenues still grew 15% from Q4. Transactions accounted for 94% of network revenue.

Gross margins fell from the previous quarter for both license & network sales and for services, but because of a shift in revenue mix toward higher-margin L&N sales, overall margins increased slightly. Expenses grew just 1% from the previous quarter, with only R&D costs rising.

Net loss for the quarter was US$12.3 million, or US$5.5 million if you exclude amortization of intangible assets.

Included in that loss is a US$9.8 million write-down of the value of Descartes' long-term investments. Last year, the company invested US$5 million in UK-based LM Solutions, scheduled to launch an Internet grocery service called Ocado this year, US$2.5 million in Maptuit of Toronto and Boston, US$2.5 million in Sameday.com, and US$1.8 million in two spinoffs from TraffiCop (which Descartes acquired in November for 549,945 shares -- without telling investors, although analysts seemed to know all about it; apparently a US$16 million deal is no longer considered material). Those investments -- all but one of which were made in the last 14 weeks of calendar 2000 -- were being carried at cost on Descartes' balance sheet, but following the write-down, Descartes shows long- term investments of just US$3.25 million.

If you ignore the US$9.8 million investment write-down and other items, Descartes had an operational profit of US$4.5 million. The most important number may be the US$5.4 million positive cash flow from operations, up from US$4.3 million in the previous quarter.

At the end of the quarter, Descartes had US$227.9 million in cash -- down US$4.1 million over the quarter.

Just 10 weeks after explaining why we shouldn't expect to see many acquisitions, Descartes announced that it is close to finalizing two deals -- one for a company in a pre-revenue stage, and the other for a company with US$8-10 million in annual sales. Both acquisitions are expected to close before the end of next month. Descartes says they will be all-stock deals and it is expecting to issue between 3-3.5 million shares for the two companies. The acquisitions are expected to have no impact on earnings per share in the current year.

Descartes reiterated its revenue forecast of US$115-120 million for the current year ... sort of. It is now including the US$8-10 million that the expected acquisitions will contribute to come up with the $115-120 million range it previously estimated without acquisitions. In the conference call, the company said it has seen a lengthening in its sales cycles.

Head-count was up 89 over the quarter to 604 employees.

The information circular shows that CEO Peter Schwartz received salary and bonus of $487,800 last year.

New to the board of directors this year is Stephen Watt, chairman of the computer science department at Western. Three of the five members of Descartes' board -- Watt, Peter Schwartz, and John Albright -- were directors of Waterloo Maple in 1998-99. RIM co-CEO Jim Balsillie remains a director.

RDM CEO resigns after one year on the job
May 28, 2001

RDM CEO Mike Carr has left the company, exactly one year after he was hired. CFO Doug Newman has been appointed COO and will lead the company until a new CEO is found. It took RDM six months to announce a new CEO after company co-founder Pat Pavlik stepped down from the role in November 1999.

Over the first five months of 2001, RDM shares have fallen 74%, making it the second-worst performer among all public technology companies in the area -- trailing only the fading Treasury International. It closed May in penny-stock territory at 80 cents, its lowest monthly closing price in more than three years.

The most obvious achievement over Carr's year as CEO was raising $15 million through a stock offering last September, but even that requires an asterisk since it's clear that most investors participated to get a piece of Xign, only to be told just a few weeks later that RDM's share of Xign had fallen from 76% to 25% on a fully-diluted basis. RDM had originally planned to raise just $5 million through the offering, which was announced two months after Charles Schwab became an investor in Xign.

The September financing was completed at $3.75 a share, and the company would have to achieve a market value of about $100 million to deliver any return to those investors. Even with growing point- of sale revenues (see next item), that will be very difficult to achieve any time soon, with reported sales of just $3 million over the first half of the current fiscal year.

Last summer, Carr was talking about making acquisitions and seeking a Nasdaq listing, but until this month, there'd been almost no news out of RDM since the financing.

RDM also announced in May was that it would provide its Internet- based archiving service to T-Tech Inc., a new wholly-owned subsidiary of North Carolina's First Citizens Bank that was created to offer cheque conversion and imaging services.

T-Tech will sell its services to small and mid-sized banks. It boasts on its Web site that it takes a smaller cut per transaction than its competitors, so it may not be a high-margin channel for RDM.

RDM builds imaging business; remains unprofitable
May 8, 2001

For the quarter ended March 31 (Q2 01), RDM reported a net loss of $713,000 ($0.043/share) on sales of $1.6 million. Sales were up 26% from a year ago (excluding the spun-off e-commerce revenues from the year-ago period) and 10% from the previous quarter.

Point-of-sale imaging and archiving systems became RDM's largest source of revenue, contributing $854,000 or 54% of sales. The POS business continued to grow quickly, with sales jumping 38% from Q1, which had shown a 39% sequential increase. Operating loss for the POS segment was $832,000.

The company's traditional cheque quality systems provided the remaining 46% of sales -- $731,000, down 11% from Q1. The segment continued to be profitable, with operating income of $235,000.

Combined gross margin was 29%, up from 23% in the previous quarter, but resulting in gross profits of only $461,000. The company says it expects margins will continue to improve as its image archive business grows.

RDM used $2.0 million in cash in the quarter, but still has $14.4 million on the balance sheet and working capital of $16.5 million. Inventory levels climbed $709,000 to $2.7 million.

The company says it is trying to identify and develop new markets for its imaging technologies. In RDM's recent annual report, Carr talked about the possibility of applying the technology to a wide- range of document archiving systems -- from warranty cards to marriage certificates.

RIM receives mailbox integration patent, sues competitor
May 17, 2001

In April, the U.S. Patent & Trademark Office issued a patent to RIM for its "system and method for pushing information from a host system to a mobile data communication device having a shared electronic address." A month later, RIM filed a complaint against South Carolina's Glenayre Technologies, claiming the company had infringed its patent, as well as its "Always On, Always Connected" trademark, which RIM has used since 1996.

Shortly after RIM filed the complaint, Glenayre announced it was getting out of the wireless messaging business and laying off most of its workforce.

In July 1999, Glenayre filed a patent infringement suit against RIM, claiming RIM had violated its patent on a method of generating power from a dual battery source. There's never been an announcement of what happened with that suit.

Glenayre Electronics was previously based in Burnaby, BC, although technically, the current Glenayre is a different U.S. corporation that bought the name and paging product line from the Canadian firm in 1992.

• There were several stories this month about an alleged "BlackBerry killer" being developed by Danger Research of Palo Alto. I think the last product that was being called a RIM killer before it was released was the Palm VII in 1999. Palm is still promising its RIM killer will come someday.
• The $2 million donation from RIM's employees toward the cost of the City of Waterloo's Millenium Recreation Park -- now renamed RIM Park -- has succeeded in getting the company's name in the papers, but it's not the kind of publicity it would have wanted. Just as the controversy over the new name had died down (see last month's digest), a series of articles in The Record questioned the legality and ethics of the financial arrangements made by the City to pay for the park. Each story prominently featured the "RIM Park" name, and a former city councillor and defeated mayoral candidate even referred to the park's dubious business plan as "the RIM plan" in a response to The Record. Now the City is talking about the possibility of suing the company that arranged the financing, which should create even more negative contexts for the RIM name to be placed in.

Com Dev sales slide with telecom slowdown
May 30, 2001

For the second consecutive quarter, Com Dev reported sequential declines in revenue, with sales of $54.6 million in the period ended April 30 (Q2 01). Revenue was down 9% from the previous quarter, but up 21% from the same period a year ago.

Net loss for the quarter was $4.0 million ($0.09/share), growing from a loss of $453,000 in Q1.

Com Dev Space had a good quarter, with sales climbing 15% sequentially to $32.2 million, or 59% of all sales. Gross margins rose to 33% from 28% in Q1. Order backlog shrank from $102 million to $90 million over the quarter.

Com Dev Wireless was not so fortunate, reporting a 30% sequential decline in sales to $22.4 million. Margins fell from a very high level of 28% in Q1 to 17%, creating gross profit of just $3.8 million.

Last quarter, the company said it expected to hit its sales targets for the year but that a shift toward lower margin 2G/2.5G products would erase any profits. This time, the management team would not provide any guidance for the remainder of the year, saying that they can't get any clear pictures from their customers and would only be speculating.

The company raised $32.1 million in cash in the quarter through a share offering. Operations used $14.1 million, leaving a net increase in cash of $19.3 million to take the cash position to $21.6 million at the end of the quarter. Bank indebtedness was reduced by $7.0 million. Working capital increased to $100.8 million, although there were some concerns about inventory levels being too high. DSOs jumped to 119 from 84 in Q1.

On the conference call, CEO Keith Ainsworth said that the company's prospects were looking good "for the next few years" once it gets past this year. The new M/ERGY product is on schedule for commercial roll-out early in 2002, and Com Dev says forecasts are suggesting that its markets overall should pick up next year.

It didn't sound like the Moncton workers who were laid off in March -- for what was originally supposed to be about eight weeks -- are going to be called back any time soon. COO John Keating said the Moncton site had been restructured and staffing levels reduced.

Virtek breaks even as quarterly sales decline
May 30, 2001

For the quarter ended April 30 (Q1 02), Virtek reported net income of $150,000 ($0.006/share) on sales of $8.0 million. Sales were up 46% from a year ago, but down 17% sequentially.

Both of the company's business segments -- biotech and precision manufacturing -- reported a drop in sales from the previous quarter. In fact, both segments went back almost exactly to their Q3 levels. Not surprisingly, precision manufacturing couldn't maintain the huge 23% sequential gains it achieved in Q4, and declined by 19% to $5.9 million in revenue.

Biotech also reported a sequential decline, falling 9% from Q4 to $2.1 million. Virtek shipped 24 ChipWriter and ChipReader instruments in the quarter, and CEO Jim Crocker said he was "satisfied with our rate of progress," in a release. There's been no announcement of the first sales of the new desktop arrayer, originally scheduled to ship in Q4.

The company says the Q1 numbers are on plan for achieving the 50% sales growth it has forecast for the current fiscal year. To hit that target, Virtek will need average quarterly sales of $12.3 million for the rest of the year, with Q2 sales likely falling below that average.

The balance sheet shows $5.6 million in cash at quarter-end, down $2.1 million over the quarter. Inventory increased by the same $2.1 million to $6.8 million. Working capital remains unchanged at $17.1 million.

Virtek paid $100,000 in cash along with 480,000 shares to acquire FONA Technologies near the end of the quarter. That's slightly different from the terms originally announced, which were 500,000 shares in an all-stock deal. The total cost of the acquisition remains the same.

For the first time in six quarters, Virtek did not conduct a conference call but instead asked that any questions be brought up at its AGM, held last week in Toronto.

The company now has 149 employees.

The annual information circular shows UW professor and company co- founder Andrew Wong holding 1.86 million shares, or an 8.3% stake, while fellow professor and co-founder Mohamed Kamel is listed as having acquired 310,000 shares over the year to bring his holdings to 1.16 million shares, or 5.2%. CEO Crocker received a 24% pay raise this year to a base salary of $280,000.

CME Telemetrix continues monitor development with Motorola money
May 25, 2001

At the close of the quarter ended March 31 (Q1 01), CME Telemetrix reported working capital of $7.0 million, with $6.3 million in cash. Operations consumed $1.3 million over the quarter, which was offset by additional investments from Motorola that contributed $5.3 million. Net loss for the quarter was $920,000 ($0.10/share).

Despite the cash infusion, the company had to borrow $522,000 from its bank because the money from Motorola can only be used for the development of CME's non-invasive glucose monitor.

CME says it is developing complementary technology to add to its near-infrared (NIR) monitor to achieve the accuracy targets that it originally hoped to achieve by the end of last year.

R&D expenses actually fell 25% from the previous quarter to $580,000. The company paid US$120,000 to Boston University for the use of its staff and facilities. CME had announced a co-development agreement with the Photonics Center at BU in September 1999 that would have seen the university receive a royalty on sales of CME's NIR technologies.

No update on the dispute with Neurosoft. CME doesn't expect the matter will get to court this year.

The information circular shows that CEO Duncan MacIntyre was paid $448,485 in salary and bonuses last year, not too far below the company's annual sales of $591,000. He also was granted 250,000 options over the year.

In its annual report, the company says it is looking for partners to develop and commercialize a non-invasive cholesterol monitor and is also developing fibre-optic telecommunications technology.

GUARD sells cheap SignalGene shares to fund operations
May 30, 2001

GUARD has run out of cash again, and has started to sell the SignalGene shares it received as part of its payment for its Nanodesign subsidiary, acquired by SignalGene a year ago.

Unfortunately for GUARD, the 4.7 million shares it received -- valued at the time of the deal at $10.8 million -- had fallen to $2.2 million at the beginning of May when it started selling them. GUARD wrote off $7.3 million in the value of its SignalGene investment last year, and an additional $1.5 million in the quarter ended March 31 (Q1 01).

GUARD had just $44,000 in cash at the end of the quarter, and told shareholders that it funded operations in April through the early payment (with a 10% reduction) of a note receivable from SignalGene that had been due in June 2002. GUARD started selling SignalGene shares early in May.

At the AGM last year, GUARD told shareholders that it would distribute about 1.7 million SignalGene shares to them. It seems unlikely that they'll be able to afford to do so now, although there's been no statement from the company.

In the most recent quarter, GUARD had an operational loss of $780,000, with operations consuming $607,000 in cash. GUARD's subsidiary companies are all in pre-revenue stages and the only revenue generated by the company in Q1 was about $2,000 in interest.

The company's information circular shows that all senior managers received significant bonuses in 2000. The CEO has received bonuses in two of the last three years. The company's share price has fallen 84% over that period.

It looks like GUARD will be lucky to get $5 million for Nanodesign, unless SignalGene can turn its fortunes around. In April, Montreal- based SignalGene announced that George Masters, chairman of GUARD (and of CME Telemetrix) had been appointed chairman of the company, while Nanodesign CEO Ian Anderson had been made SignalGene's COO and president of its new drug discovery unit.

Finline sales drop to new low in 2000
May 20, 2000

For the second time in three years, Finline's audited annual financial statements showed less revenue than the company had previously said it had generated over the first nine months of the year in its unaudited quarterly statements.

For fiscal 2000, ended December 31, Finline reported sales of a paltry $274,000 and a net loss of $5.25 million ($0.48/share). Revenue declined by 38% from a year ago to its lowest point in the six years where the company has disclosed its sales. It reported negative gross profits for the year of $24,000. Over half of Finline's revenue was from sales to Nigeria.

Finline has written off the value of Impress Image Compression Inc., which it acquired in February 2000 for 1.5 million shares and $28,854 in cash.

Revenue shortfalls are nothing new for the Waterloo company. In 1997, the year it went public, Finline reported sales of $745,000 and that number has declined every year since, although you wouldn't get that impression from reading the company's news releases.

It held its IPO in January 1997 on the strength of a deal to supply equipment to Jamaica that it said was worth $3.9 million. Shortly after it began trading on the Alberta Stock Exchange, Finline said it had two additional contracts that would be worth another US$1.3 million in 1997. When its Q3 numbers that year came in well below forecasts of $2.7 million, it talked about "additional contracts" for "thirteen more sites" in Jamaica and said it was in negotiations for contracts with a combined value between $4 million and $5.7 million.

In February 1998, Finline announced a deal to supply equipment to Brazil that it said was worth an estimated US$24 million over three years, with $4.3 million to come directly to Finline in the first year. In November of that year, it said that after some delays, shipments on that contract were expected to begin by year-end and "should result in orders for $2-3 million in the first few weeks of delivery."

By the following July, after more delays, Finline said it expected the Brazil contract would be worth $11 million over two years. It told The Record that it expected to ship $1.5 million in equipment by end of the year "with a possible upside."

In September 1999, it announced a deal to supply equipment to Somalia that it estimated would be worth $1.6 million over 12 months. Finline's audited financial statements show it shipped $230,000 in product to Somalia over that period.

Around the same time, it said it was considering an acquisition that "would not only put Finline in a world leading position in terms of transmission capacity and speed within the MMDS spectrum, but could also provide a solution to the world-wide Internet bandwidth problem." That deal was the Impress acquisition, announced with great fanfare in February 2000. The news helped drive Finline shares to their all-time high, peaking at $9.00 six days after the announcement was made -- and just as the company was closing a $3 million stock offering.

Less than a year later, the value of Impress was written off following what Finline describes as "a review of the net recoverable amount of the acquired technology and financial condition of the company."

Finline has also disclosed that it hasn't received the million dollars it announced it had raised last December. That placement was announced at a price of $1 a share and Finline is now trading below 40 cents.

At year-end, the company had $52,683 dollars in cash and negative working capital of $80,414. Its unaudited financial statements for the first quarter of this year (ended March 31) show a cash position of just $3,346 and negative working capital of $402,298. Revenue in Q1 was reported as $31,882 with a net loss of $570,000. Accumulated deficit now stands at $8.9 million.

Despite the lack of revenue, Finline still reported average monthly R&D expenses of more than $75,000 in Q1, with an additional $56,000 a month in marketing expenses.

Finline announced in May that its new subsidiary, FinTel Networks International Inc., has been "authorized" to carry international telephone traffic to and from Cuba. No revenue estimates were provided. According to financial statements, Finline has committed to provide US$100,000 in cash to its Cuban joint venture. It announced a $400,000 private placement early in May, but that money will likely be needed to finance daily operations, given the desolate state of the company's balance sheet.

Finline had the opportunity to raise $1.8 million from the exercise of warrants that were issued with its financing in February 2000, but they were priced at $1.85 each and expired on May 23 with the company's shares trading well below the price at which any would be exercised.

The annual report disclosed that Finline has been threatened with an $850,000 claim for wrongful dismissal. It doesn't say who is threatening the suit, but the most likely candidate is Todd Grunberg, announced as the company's new COO in May 2000, and fired five months later in one of the few times that Finline has issued a release with negative news. Grunberg is now president of Craigleaf Capital, a company founded by former Finline director Craig Richard.

STOCK REPORT: Calm waters after the storm
May 2001

Compared to recent months, May was relatively uneventful. Maybe not for RDM, whose shares descended into penny-stock range, falling as low as 71 cents -- their lowest level since March 1998. They closed May at 80 cents, down from $1.25 at the end of April.

Virtek reversed three months of declines and had its best month since January. At the other end, Com Dev continued its recent slide after a strong 2000.

For the month of May:

Turbosonic [OTCBB: TSTA] +56%
Treasury Int'l [OTCBB: TREY] +33%
Virtek [TSE: VRK] +14%
Dalsa [TSE: DSA] +8%
CME Telemetrix [CDNX: YME] +6%
=================================
Open Text [TSE: OTC] -2%
GUARD [CDNX: GUA] -3%
RIM [TSE: RIM] -5%
MKS [TSE: MKX] -7%
Descartes [TSE: DSG] -7%
Finline [CDNX: FIN] -7%
RecycleNet [OTC: GARM] -8%
Com Dev [TSE: CDV] -15%
Navtech [OTCBB: NAVH] -21%
RDM [CDNX: RC] -36%

For the quarter ended March 31 (Q3 01), Turbosonic reported net income of US$338,000 on sales of US$5.4 million. Revenue jumped 180% from the same period last year.

What may look like a big jump for Treasury International was, in fact, a gain of 10 cents. The stock is still down 98% over the last 12 months. In May, the company reported weak results for the year ended January 31, with sales of US$300,000 and a net loss of US$1.4 million, about half of which was a write-down of a note receivable. Treasury ended the year with negative working capital of US$355,000. The company is being sued for $20,000 by a former employee for loss of wages and other damages.

Over the last 12 months, Open Text has easily been the best performer of any of the stocks listed here (including the ones below), registering a 26% gain. Turbosonic (+16%) and Virtek (+15%) are the only gainers over what has been a difficult year.

May results for companies with development offices in the Waterloo area:

Cyberplex [TSE: CX] +43%
Network Assoc [Nasdaq: NETA] +32%
Gensel Biotech [CDNX: GSB] +18%
CacheFlow [Nasdaq: CFLO] +17%
Cisco [Nasdaq: CSCO] +13%
=================================
Siebel [Nasdaq: SEBL] -0%
Sybase [NYSE: SY] -1%
CheckFree [Nasdaq: CKFR] -3%
MDR Switchview [CDNX: MSW] -12%
CVF Technologies [Amex: CNV] -15%
VoiceIQ [CDNX: VIQ] -41%

Some signs of life for Cyberplex stock, which went back over a dollar and closed May at $1.18. It's still off 91% over the last 12 months.

Markham's VoiceIQ just completed its acquisition of Waterloo's INM, and INM founder Oleg Feldgajer has already lost over a million dollars on paper. Welcome to the public markets! Feldgajer is now VoiceIQ's CTO and largest shareholder, holding just under 14% of the company.

Miscellaneous Tidbits

• Tech Capital Partners boosted its Waterloo-focused venture fund by an additional $7 million in May, bringing the total fund size to $30 million. The lead investor in this round was the Business Development Bank of Canada.

• The new CEO of Sirific Wireless is Roy Gunter, previously vice president of North American wireless networks for Siemens. He will be based in Sirific's California office, which it now calls its head office. The office belongs to Celtic House, which was the lead investor in Sirific's $10 million first-round financing late last year. Gunter succeeds Richard Boyer, Sirific's seed investor, who led the company through its start-up phase. David Brennan, previously associate VP of finance at PixStream, is now Sirific's finance VP.

• Dalsa made it through its traditional weak quarter (Q1), ended March 31 with a sequential sales decline of only 2%. The company earned $1.2 million on sales of $15.7 million. Sales grew 56% from last year. Operations provided $2.2 million in cash, and the company added $2.1 million to inventory and paid off a $5 million loan. Dalsa still had $4.8 million in cash at the end of the quarter.

• Agile Systems is one of four nominees for the CATAAlliance Innovation & Leadership Award for Emerging Technology. CATA says the award recognizes innovative new products with strong market potential.

• Some more details about Metiom, which shut its Waterloo development office last month (see April digest). The New York- based company filed for bankruptcy protection and laid off all but about a dozen of its staff company-wide. It had announced a US$45 million round of financing in January, but I guess that fell through. Metiom started the year with about 400 employees.

• UW's north campus tech park, an on-again, off-again affair for more than 20 years, is back on again. The City of Waterloo and the Regional Municipality of Waterloo have agreed to contribute a combined $13.4 million toward the project. The provincial and federal governments will each be asked to match that amount. Sybase and Open Text have been rumoured as potential lead tenants.

• Guelph's Gensel Biotechnologies raised $906,000 (gross) through a rights offering.

• In February, Endgame Solutions, the Descartes spinoff, sold its perishable products software line, along with more than 50 customer contracts, to Extended Technologies Corp. (Xtek) of Dallas. Xtek has formed a new subsidiary, RouteTek, to continue development and sales of the software.