A SOBERING VIEW OF IRAQ
Sergei Slobodov: ‘So you call sucking up to the host, shameless self-promotion and a good-old government conspiracy theory a speech that reads well? And you would recommend people spend their money already earmarked for Las Vegas to buy these guys’ stock? Would only make sense coming from a person who owns a fair chunk of the shop, while pretending to be objective.’
Rintala, Donald: ‘I put some money on them myself. Even though failure is probable, expectation value may be very positive (as you point out). I didn’t think much of the Chorus Motor, but the Cool Chips seem pretty revolutionary. Of course, no one yet knows how to manufacture them. That’s the rub. But if someone had demonstrated that it’s impossible, Boeing et al probably wouldn’t be interested, so it’s probably an open question at this point. I think the physical principle behind the Cool Chips is valid. In fact, it’s quite simple. As for manufacturing, you just have to align two metal plates facing each other with a few atomic radii of vacuum in between. Conceptually, that’s also simple. (I don’t know if you’ve read through their tribulations in trying to actually do it.) At a $30 million market cap, they just need to do one little thing right to win (as you also point out). So it’s enticing. Even if you lose your money, you didn’t necessarily make a mistake, as it’s rational to put some money into probable losers which could win big. If only we could really estimate the probabilities involved.’
Leslie Mercer: ‘I respect your right to recommend a long shot like Borealis, however I think you are doing your readers a disservice by talking up Rolls-Royce, Boeing, and IBM while ignoring Borealis’s track record. Last September, I took a look at the history of the Chorus Motor as told by Borealis as published in the company’s annual reports. I went back to 1996 which is as far back as Borealis’s web site allows, but my understanding is that work on Chorus has been going on since before 1996. Anyway, here is the history of Chorus as told by Borealis:
[W]e continue to work at… demonstrating and certifying the performance advantages of the Borealis Motor(tm)…. [W]e are aiming to lock in strategic partnerships with key industrial giants en route to the commercialization of our technologies and entry into the marketplace. This process will take time and money.
Borealis Motor Works is in the final testing phase prior to commercialization. We have one major player wanting to use the technology for Locomotives and Off Road Haul Trucks. Once we achieve certification, we expect relatively rapid optimization and sales.
Borealis Motor Works is in the final testing phase prior to commercialization. The testing has been stalled by over a year at a research organization associated with the Ontario Government. [Then they repeat the claims from FY97 regarding locomotives and haul trucks.]
Closest to market is the Chorus Motor…. We have built and tested an Alpha version, and are now completing testing on an improved Beta version; we expect to announce these results shortly. Work is already underway on production prototypes.
The Chorus Motor has production prototypes underway that should rock the industry. It should be noted that we are building these production prototypes… with leading electronics companies. Borealis expects to license the Chorus Motor technology to major motor manufacturers.
The Chorus motor is on the market. We are actively seeking purchase orders for Chorus motors for test purposes and we are very interested in selling exclusive worldwide licenses for particular market niches…. While the Chorus motor’s operating specifications look very similar to permanent magnet (PM) motors, Chorus motors offer much higher reliability, at a fraction of the cost of a PM motor. We have built and tested three versions of the Chorus motor, with work well underway on a Delta version, an advanced engineering prototype…. [T]he Chorus motor will help make hybrid-electric cars an economic reality.
Fiscal 2001 should yield improved operating results. The Chorus Motor has several purchase orders pending for development motors for specific customers. This is a very short step to market. Additional builds of the Chorus Motor have been basically completed, and we are beginning a public round of testing. We hope Chorus Motors plc will have both positive cash flow and earnings in fiscal 2001.
To date the Chorus Motor technology is still under development such that the Company has not made any related sublicence sales.
The Company and Technical are actively working together to negotiate sales or further sublicensing of its technology to various parties, which is expected to generate profitable operations in the future.
Fiscal 2003 was, we expect, our last year as a development-stage company. Shortly after the fiscal year-end, we completed our first production prototype Chorus Motor, and we plan to introduce Chorus to the marketplace at a series of motor/drive trade shows beginning in June. We hope a year from now to report significant revenues and earnings for fiscal 2004.
‘FY04 is complete and it’s almost time for the next annual report. What are the odds Borealis will report ‘significant revenues and earnings for fiscal 2004?’ Not good in my opinion.
‘I realize this is lengthy, but I’d be honored if you made this information available to your readership. However, what I’d really like is for you to use your position as an apparently major stockholder to extract from Chris Bourne some kind of explanation for Borealis’s repeated failures to close a deal. I want to believe. I really do! We all dream of holding that winning lottery ticket. I merely want to be convinced that I’m not buying my lottery ticket from a swindler.’
☞ Amen. (If Chris Bourne responds to this column, I will post his response.)
Now . . . go back to the top of this column, if you have time, and click the link to the piece on Iraq. If it’s valid (and I deeply hope it’s not), it’s hard to see how the near-term U.S. investment climate could be particularly bright.
Quote of the Day
Every debt is ultimately paid, if not by the debtor, then eventually by the creditor.~Jim Grant
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