Dear Midtownguy,

Let me try and kill a few birds with one stone and address leasing and separately the timing of the press release which was an update.

First, we did not consider providing a leasing option as being important/ material news because (i) it’s a pretty obvious option under the circumstances and (ii) it doesn’t affect timing of revenues, existing contracts, or even contracts under discussion.

All leasing does is increase the pool of potential clients.

Let me explain:

There are many companies, very healthy companies, who prefer to run costs through an operating budget rather than a capital expenditure budget if possible. Sometimes it has to do with the complexity of getting a capex budget approved, other times it may be that they have a capex limit.  Whatever the reason, there is often a preference away from capex.  Also keep in mind that if a capex budget is not already in place for purchases one must be put in place and this takes time.  Providing a leasing option addresses this, and as such increases the pool of potential clients.  In cases where a capex budget is not in place providing a leasing option would save this time and thereby arguably speed up the process.

Now what is a leasing option?  It is a lending option where a separate company will pay Pyro in full for the torch and take payments over time from the client.  So, Pyro gets paid as it would. This is not unlike you going to a bank and getting a mortgage and paying the seller in full. But you pay the bank over time.  The only difference is that we bring the bank to the table who is willing to lend against our torch sales because they have done all the necessary due diligence and understand the risk.

Of note, Pyro still  keeps the after sales maintenance and spare parts business as separate contracts (but I can imagine one day where that is all wrapped up into one package but that is too involved to get into here).  From a very simple perspective, we get paid as usual for the torch and provide aftersales business separately.

How is this good for Pyro? Well, typically we get a “Referral fee” from the leasing company (usually a part of the interest rate they charge the client), and if we are increasing the pool of customers and we do business with customers who would not of unless the leasing option was available then we have increased recurring business by virtue of having more maintenance/spare parts contracts.

It can get a lot more complex than that we specially tailored leasing programs, but that is basically how it works.

So, good…but not materially good…and DEFINITELY not negative…as you might be able to better appreciate now.  If one believes the sell off after the Press Release was due to the leasing option being discussed, then I would suggest there was an element afoot that was exploiting a fundamental ignorance about leasing and drawing the wrong conclusion (delayed revenues etc.)…but I am just speculating.

There have also been some questions raised as to why didn’t we wait until markets closed before releasing the press release, and the reason is simply: competition, as in competition for eyeballs.

Let me explain:

We can issue press releases at anytime with the caveat that if it is material, and has to be released during the day, then the stock must be halted to allow the information to flow through the market.  Otherwise it is preferred that material news is issued when markets are closed.

The press release we issued was not material.  It was an update.  We have issued updates many many times before without this reaction.  It is part of a plan to, if time permits,  come out with a series of updates so that if and when we are up listed, potential investors have an easy source to get info on the company instead of having to pour over years of press releases…not much more complicated than that.

Not many CEO’s issue updates, or non-material press releases for that matter.  Many CEO’s I know do not like issuing press releases and only do so if pressured to by the sensitivity of the information.  Press releases take up valuable Company time and cost money so I see why they may not like to.

We like issuing non-material press releases while markets are open so we can get the attention of investors.  If we do it after hours our press release will be competing against material news being issued by other companies.  Does that make sense to anyone?  After hours we will be competing with other more important releases, dinner, family time etc. etc.

In closing, the buck stops here.  With me. No one else. However, if I had to do it again, I would release during hours for the reasons I mentioned above. In my opinion that press release was neutral bordering on slightly positive, and there is no reason the market should have taken it any other way.

Hope that Helps

Peter