Tranzeo Wireless Technologies Inc TZWLF

RE: Don't understand

[AmericanInv]

Hello Sherbet

Thank you for your prompt and comprehensive response.  A few comments I have based on your reply:

Speech:  Why do you refer to yourself as "One"?

Target:  Yes I recognize that $8 is quite rich for now, and while I wouldn't pay $8 for the stock right now, I was just using that "not so unreasonable" valuation to demonstrate just how undervalued the share is.  I would have thought that as of now the stock would be trading somewhere between $2-$3, not at
.75....  I suppose that you are correct in that investors likely need to see even more contracts awarded before regaining confidence in the company, but come on....

Broadband Stimulus:  Yes, I am aware of the delays/complications in this regards, however it is worth noting that I did not comment on the US Broadband opportunities when discussing the additional international opportunities.   I did not factor this in my valuation, although you are right, this could add more revenue at the end of the year.

Aperto Acquisition:  While I can't comment on the amount of consideration to be given, I can only assume that it will be relatively high given the amount of business Aperto seems to be generating.  It is worth noting that the amount of consideration is capped at 25% of the outstanding common stock.  I would also comment that at this point it is relatively safe to assume the company will not pay any cash for this transaction considering the shares issued are valued at $1.617/share or $1.33/share even on the $400,000 owing.  Also the company is somewhat cash strapped, so it seems logical they would not pay cash.  While adding up to 25% more shares would dilute the EPS, I'm sure this will be more than offset by the increase in earnings (given that this is specifically what is driving the amount to be issued to former Aperto owners).  Also as I said, Eyal's assumption of an additional share offering should also be reversed.

Price: Good call on the price dropping so much.  Could you please share how you drew that conclusion previously?  Every valuation method I applied to this stock gave me a much higher valuation than we are at now...   Even after considering your comments, I have a lot of trouble understanding an equity value of $28mm.

Technology:  I also must comment that I think this WiMAX technology that is upgradeable to LTE seems like a really promising technology.  It seems to solve the problem of LTE costing too much and not being commercially unavailable.  Very good work.

Once again, thank you for your prompt/comprehensive response.  It is much appreciated.

AmericanInv.