John,

We'd like to meet at 1:00 pm today to seek approval for our latest proposed investment.  We're looking to put up to $4.5 million (out of a $12 million total round) into Serveron, which designs and partially assembles both transformer monitoring equipment and battery monitoring equipment.  Their business model is twofold.  They both sell the equipment outright for those companies that want to perform the monitoring services themselves, and they offer a monthly 24-hour remote monitoring service for those companies that would rather outsource the activity.

Revenues for 2000 were about $750K, 2001 should be $2 million plus, 2002 around $8 million.  The monthly burn rate over the next twelve months will scale to about $800K after the hiring of all of the senior management team.  The company will have to raise an additional round of $10 million or so within 15 months.  That amount will then take them to a cash flow positive position in 2003.

Wayne Mays of ENA and Mike Boutcher of EES have both reviewed the technology and agree that Serveron has a reasonable advantage with their transformer monitoring equipment and a sizable advantage with their battery monitoring equipment.

Thanks,
Kevin x33995