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Tuesday, June 13, 2006

BakBone Software (BKBO) yet another open letter

BakBone Software (collected entries, website, yahoo, pink sheets, sec) issued yet another open letter to shareholders on May 5, 2006.

They still haven't completed an audit and still don't even know when they will. They had been delisted from the Toronto stock exchange and this press release contains a lot of explanation of what that does and doesn't mean. For people buying shares on the Pink Sheets, it means nothing.

They include some business results in the open letter:

Total worldwide bookings (the dollar value of contracts signed during the period, but the revenue is recognized in a complex formula which is part of why they're having endless trouble getting audited results) for the year ending March 31, 2006 increased 20.5% (to $45.2 million) over 2005. These bookings were for both software licenses and maintenance contracts.

For Q3, total bookings increased 21.6% (to $13.3 million) over the prior Q3.

For Q4, total bookings only increased 7.5% (to $11.5 million) over the prior Q4.

Their cash position decreased to $9.8 million from $14.7 million at the end of Sept due to an acquisition of Constant Data for $5.6 million in cash plus some contingent payments.

They also state:

On the operational front, we are in the process of broadening our product offering with the addition of NetVault:Replicator, the replication technology acquired from Constant Data, and NetVault:Report Manager, BakBone’s advanced reporting technology. As we move into fiscal year 2007, our goal is to continue to grow our VAR and OEM business, increase our maintenance retention rates worldwide, and continue to advance our IDP (Integrated Protection Strategy) product portfolio. Our partnerships with Adaptec, Apple, NCR Teradata and Network Appliance remain important components of our business model, and our goal is to grow and expand these strategic relationships. During the past six months, we have expanded our sales operations in both North America and EMEA (Europe, Middle East and Africa) to include inside sales focused primarily on the growth of our maintenance retention business. To date, we are seeing excellent results, and we will continue to provide support to this group to increase this growing component of our revenue base. Regarding the BakBone management team, Doug Lindroth has joined the Company as its new chief financial officer. Doug comes to BakBone with strong credentials in managing the global financial and legal responsibilities for Memec, the world’s leading specialty semiconductor distributor.
They don't mention total share count. However, this new guy was granted 300K options, 50% vests in April 2008, 25% vests in April 2009, and 25% vests in April 2010. He started the company with zero shares.

The VP of North American Sales has no shares.

The Change of Control agreements with senior management was re-written and the individual agreements are found here. 9 months salary and benefits, accelerated option vesting. In most cases it's 6 months.

John A. Kryzanowski owns 4.7 million shares, who appears to be a "successful stock broker in San Francisco". Yahoo list of insiders.

The stock price has been dropping lately to around $1.50 on the ask. I'm thinking this is a good price now and I'm going to see if I can grab some shares.

UPDATE later that day: I bought some shares.

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