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   Technology StocksGigoptix, Inc.


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From: tktrimbath12/31/2007 4:35:22 PM
   of 148
 
end of year review of LMRA

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

(market cap ~ $0.043B)

Lumera is a highly speculative company attempting to develop product lines based on organic materials for the manipulation of electro-optical components, bio-arrays, and applications like antennas.

The good news in 2007 was that they have officially announced the launch of the optical switch products. The bad news was that none of the other products launched, the switches haven't generated significant revenue, and the CEO left suddenly.

It won't take much for them to succeed, yet they don't seem to be able to manage that initial small success that will lend the company credibility. The new management has not impressed me and seems to be acting as stewards rather than leaders. Maybe they are quiet because they are getting ready to make a big announcement, but "maybe" is a not a good investment term in a company that has lost its CEO and isn't reporting substantial and quantifiable news.

I will continue to hold because there is little incentive to sell. The position isn't worth enough to become a significant investment anywhere else, and who knows, they might succeed. (Ick, what a position to be in.)

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From: tktrimbath7/1/2008 12:54:22 AM
   of 148
 
mid-year review of LMRA

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

(market cap $0.02B)

Lumera is a high tech company and a very speculative stock based on exploiting the electro-optical of "organic" materials. Their focus areas were switches, antennas, and bio-arrays. They developed a division based on the bio-array business called Plexera. While Lumera has some products in the marketplace, they have no appreciable revenues. After the departure of their CEO, the company seemed leaderless. Subsequently, the company is being merged or acquired with a private firm and will become a new public firm called GigaOptix. A few years ago, the CEO agreed that Lumera only needed one successful product to become a viable company. Evidently, that has not happened. The Plexera division has been closed and the new firm will rely more on the switching technology.

I will continue to hold as the shares change into a new company because the total value of the shares is too low to be worth sweeping up into something else. I am encouraged by the GigaOptix management as they seem to be more active and willing to make hard decisions about product focus. It will probably take a year or so before the new company can be properly evaluated. The only thing that would allow an earlier look, would be substantial and sustainable product revenues. It might happen, but I haven't seen anything to suggest that such a good event is expected.

DISCLAIMER LTBH since 2004.

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From: tktrimbath12/4/2008 6:29:28 PM
   of 148
 
Lumera 2008 Annual Stockholders Meeting 12/04/08

CAVEAT
I am an amateur investor and human. Mistakes will be made. The official sources are the Company and the SEC. When in doubt as questions of them, me and the others who attended.

PRE-MEETING
This was going to be a sad day. No matter the spin, Lumera was being acquired/merged because it never succeeded as an independent public company. I arrived an hour early and was the second one there. The first one was the hotel worker who arranged the food and drink table. It was a half hour before any company employee showed up. There were only 45 chairs and by the time the meeting started, less than half were occupied.

The few familiar investor faces gathered in the back to talk about what could have been and what may be. I am always impressed at the depth of research some people conduct. Of course, we were all standing there with major losses in our portfolios.

The ex-CFO joined the group and answered a lot of our Q&A prior to the meeting. (I'll paraphrase those responses and include them below with the rest of the Q&A). Even he said that the meeting would be perfunctory.

FORMAL MEETING
The official meeting only took nine minutes. Scripts help. Basically, everything passed with about 60% of the vote.

QUESTIONS & ANSWERS (paraphrased for my convenience)
? I asked about the other 40% of the votes and they said it was mostly shares that weren't voted. There were only 400,000 NO votes.
? GigOptix's history is about as long as Lumera's but they have concentrated more on complete units. Lumera has great tech. GigOptix has customers. GigOptix also has impressive management skills.
? Beginning cash position will be best approximated by looking at the Q3 report for cash and cash flow.
? Lumera shareholders will own roughly 50% of the new company.
? 1 to 8 stock split will help, but be insufficient for, getting the company listed on normal NASDAQ. Growth is required to work back up from the "pink sheets".
? Bothell will remain with about 20 people. Modulators will be ready for market in June.
? The company continues to look for a buyer for Plexera.
? Lumera's tech advantage is the same as it ever was. Superior and proprietary materials properties allow the highest electro-opics performance with no moving parts. No one else can do 100 giga bits per second. But the market isn't there yet. The 40 gps market is small but growing at 90%. The 10 gps market is large but crowded.
? Sales timing will be dependent on budget cycles, replacement strategies, and the overall economy.
? GigOptix will basically provide the package that is improved by adding Lumera materials.
? Lockheed Martin uses 20 gps equipment.
? Management is excited about the prospects.
? This economy is expected to be less severe in terms of telecommunications.
? They are aware of China in terms of representatives and customers.

SUMMARY
GigOptix has better management skills and customer base. Lumera has superior technology but couldn't make the business case. Together they hope to become very successful. The depressed economy and stock price are tough hurdles.

MY CONCLUSION
The short version: I can't lose much more. I might as well hang around.

The long version: Despite the assertion that management is excited about the merger, I wasn't convinced. I hoped to meet GigOptix management to begin understanding them and how they may run things. A presentation from them would have helped. But I get the impression that they weren't enthused enough to attend. It is signs like that which can tell me more than the several hundred page document describing the merger.

The market and the tech look good; but then, they always have. Maybe this will make the difference.

It is sad to see such potential fade and falter. The stock performance is only one measure of that. I am a champion of new ideas and think that the world gets better by trying new, more efficient things. I'd like to benefit from that financially as well. Millions of dollars and years of peoples' lives chasing such ideas. Many times they don't succeed, or at least, not at first. This story is duplicated too often. How many world-changing ideas were mis-handled?

I'll continue to hold the shares, and might even buy more if they show sufficient progress, but that may take years. In the meantime, the new company will have to create credibility. That intangible is non-trivial without sufficient revenues. Here's hoping (a terrible investment strategy) that they succeed.

DISCLAIMER LTBH since shortly after the IPO.

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From: caly12/30/2009 11:00:03 AM
   of 148
 
Just posting some links and information here on GGOX and DBSI as I try to unravel what's going on.

********************************

Feds seek control of DBSI

Authorities say managers of the troubled Boise company engaged in 'serial misconduct."

idahostatesman.com

********************************

Compliments of a Yahoo poster...

messages.finance.yahoo.com

This is as of March 2008

Under the terms of the merger agreement, DBSI, Inc., which is currently GigOptix's majority shareholder through its subsidiaries Stellar Technologies and iTerra Communications LLC, will become the new company's largest shareholder.

...

This is how it was described in the latest 10Q

“GigOptix LLC was the successor company of iTerra Communications LLC, ("iTerra"), which was founded in 2000. In July 2007, as part of a reorganization plan, iTerra formed GigOptix LLC, a wholly-owned subsidiary. All of the assets and liabilities of iTerra, with the exception of the $45.8 million of debt and accrued interest due to iTerra's primary member, were transferred to GigOptix LLC along with all of iTerra's operations and intellectual property.”

********************************

Resignation of Douglas L. Swenson from the GigOptix, Inc. Board of Directors

ir.gigoptix.com

********************************

blogs.wsj.com

In his first report about real estate company DBSI Inc., bankruptcy court-appointed investigator Joshua R. Hochberg’s words paint a picture of a massive web of closely connected companies that were primarily controlled by one individual that defrauded investors by putting their money to work not as they were promised.

********************************

messages.finance.yahoo.com

I noticed this email from Investor Relations was "somehow" deleted from the board...

-------------------------

Thank you for your question and giving us the opportunity to set the record straight.

The investigation concerning GGOX and DBSI is now closed, and GigOptix has no reason to believe that they pertain to any possible future litigation by the DBSI trustee relating to GigOptix.

The public time entries described in the inquiry relate to the Trustee's examination last summer. They accurately reflect that the Trustee was looking into historical transactions between DBSI and its technology subsidiaries, including transactions between DBSI and iTerra / GigOptix. The fruits of that work appeared in the Trustee reports that were released this fall. The immediate impact of those reports, of course, was that DBSI was no longer allowed to retain its debtor in possession status. The Trustee's findings, as you know, also led to Doug Swenson resigning from the GigOptix board.

In order for the Examiner to be paid for the work which was done, it needs to petition the bankruptcy court to use funds that might otherwise be available to satisfy other claimants against the DBSI bankruptcy estate. In that petition, the Examiner needs to state what was done, and that is done by providing time records as is the case here. To date, we have no further information that the Examiner or the US Trustee is doing anything further that would involve GigOptix.

One further point of clarification, the US Trustee and the DBSI Chapter 11 Trustee are different. The US Trustee is a part of the US Attorney's Office, which is part of the US Department of Justice. Among other things, it is how the government becomes involved in bankruptcy cases. The Chapter 11 Trustee is the management of the DBSI bankruptcy estate. He was appointed after Doug Swenson was removed as President of DBSI. Prior to that time, DBSI operated as a debtor-in-possession, which means that the existing management continued to manage the bankruptcy estate after the filing of the bankruptcy. The Chapter 11 Trustee now fills that role. The duty of the Chapter 11 Trustee is to protect the creditors of DBSI.

Finally, in order to maximize the position of the DBSI creditors, the Chapter 11 Trustee has asserted that despite iTerra and Stellar not being part of the DBSI bankruptcy estate and DBSI only holding a majority but not whole interest in iTerra and Stellar, that the assets of these entities should be controlled by the Chapter 11 Trustee. This is currently playing out in the bankruptcy court and is not unexpected. GigOptix has had no involvement in the matter between iTerra/Stellar and the DBSI Chapter 11 Trustee. A key consideration relates to the 1.5 million shares that were paid to Mr. Swenson’s entity for GGOX’s acquisition of technology assets. The issue only centers on who will ultimately realize the financial benefit of this GGOX stock that is sold in the future.

I hope this is helpful and puts to rest many of the inaccurate perceptions and speculations that are being discussed via the Internet.

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From: tktrimbath12/31/2009 5:43:03 PM
   of 148
 
Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GigOptix
GGOX (market cap $0.019B)
GigOptix is a very small, speculative company. They are selling optical switching products, which puts them beyond the startup phase because they have an active product line, but I don't consider them an investment because their financial performance has only begun. Their acquisition strategy demonstrates to me that they are still deciding what type of company they want to become.

Optical switches, and especially high quality ones like from GigOptix, are necessary for increasing the bandwidth and speed of internet and telecommunication traffic. For a while that has not been a strong market because of existing overcapacity. Eventually, the demand should emerge.

Despite my hesitancy, the company is growing revenues and making progress on their product lines. The things they do tend to be the right things.

I will continue to hold and may buy more if funds become available.

DISCLOSURE LTBH of LMRA since 2004.

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From: tktrimbath6/30/2010 4:32:07 PM
   of 148
 
my mid year review of GGOX

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GigOptix
GGOX (market cap $0.027B)
GigOptix is a small electronic supplier selling to the electro-optical switching market. Though small, the company has been growing organically and through acquisition. I believe its recent 100 gps switch was based on Lumera's technology (a spinoff of Microvision that was subsequently acquired by GigOptix). Many possible applications were shelved, but that also means they could be re-explored. Their high-end components were ahead of their time, and may now be finding profitable acceptance.

GigOptix appears to be gaining traction enough to be considered an investment, but their business is small and just beginning which keeps them in a speculative condition. They also are investigating being listed on AMEX, a move which I don't understand.

Management seems to be doing smart things, but I have no connection to them and can not evaluate them further. As a result, I am less confident. Based on the bits I know, there is potential, but my holding is small and a consequence of previous investments so I have not quantitatively evaluated them. If they succeed, it may be quietly because their market involves sophisticated technology that sells to very high-tech customers.

I will continue to HOLD, because selling wouldn't make me much money, because I don't know enough about them to confidently buy, and because it gives me an incentive to research them more.

DISCLOSURE LTBH of LMRA since 2004.

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From: tktrimbath12/31/2010 5:13:06 PM
   of 148
 
my end of year review of GGOX

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GigOptix
GGOX (market cap $0.034B)

GigOptix produces and sells high-speed, very technical electrical and electro-optical components, primarily for the telecommunications market. They are a small company and are the result of small acquisitions. Despite their small size, they are projected to be profitable next year, and my read of their cash flow suggests that their most recent quarter showed positive cash flow. I'm still trying to understand their debt/equity situation, but it might be high because of the acquisitions. It might also appear high because a small number for a small company can still appear large in ratios.

I like the industry that they are in, and I am a fan of the technologies they acquired when they bought Lumera (LMRA), which is how I became a shareholder of GGOX.

At this point I don't have a confident feel for the company's long term strategy or business plan. They operate quietly so there is little news to work from, and they are also one of my smallest holdings; so there is little incentive for me to learn more. I look forward to the next earnings report as an opportunity to examine their financial trends and possibly gain confidence in their future.

I will continue to HOLD and might BUY more because, at a simplest level, they are an overlooked, profitable and growing company.

DISCLOSURE LTBH of LMRA since 2004.

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From: tktrimbath6/30/2011 4:42:06 PM
   of 148
 
my mid year review of GGOX

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GigOptix
GGOX (market cap $0.025B)
GigOptix is so high-tech I don't try describing it to anyone except those that understand internet and telecom backbones or physics and organic chemistry. I certainly don't understand the technical details but here's my attempt at describing their business.

GigOptix sells very high speed switches to companies that operate and install high-capacity information networks, or how build exotic high-quality machines like satellites. Their optical-electrical switches operate at the boundaries between fiber optic networks (photons in fiber optics) and conventional information networks (electrons in metal wires). I know about and am particularly interested in the highest end product that is based on organic (as in organic chemistry, not biology) materials because I was originally investing in the company Lumera (LMRA) that they merged with a few years ago.

The company seems to have great potential, is already making money, and has much room for product expansion considering the other applications for their technology (steerable smart antennas with no moving parts, biotech labs on a chip, etc.). The company is very small, which may be why a lack of management visibility is an issue for me, but that may be because I was able to visit the company when their headquarters and meetings were local. For me, the financial statements are more convoluted than I expect from a small company, but that may be because they have grown through mergers and acquisitions. I find it surprising that price/book is only ~2 and that price/sales < 1. Those look like retailers' numbers, not what I expect from a high-tech electronics manufacturer.

DISCLOSURE LTBH of LMRA since 2004, and actually bought some more within the last year or so, despite the very small market cap.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com)

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From: tktrimbath12/31/2011 1:35:22 PM
1 Recommendation   of 148
 
My semi-annual review of GGOX

INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GigOptix
GGOX (market cap $0.039B)
GigOptix is so high tech that I don't try describing the details to anyone except the intensely curious or the engineering educated. (It would be too easy to display my ignorance.) They make very high-end electro-optical switches, the sort of equipment that converts electrical signals to optical signals and optical signals to electrical signals. (I just exposed an ignorance. Are those two different devices?) The materials are sophisticated enough to operate with very few moving parts, which allows them to operate at very high frequencies and which gives them a competitive advantage. Their customers are the companies that manage the communications backbone, so are driven more by technical specifications and operational costs than by press releases. They probably get some of the credit for enabling streaming video across the internet. Their customer industry should continue to grow, and they may find themself in a very nice niche that grows dramatically. The company has grown through acquisitions and product sales, more than doubling revenues from 2008 to 2010.

The stock languishes with price/book and price/sales more typical of construction firms instead of high-tech electronics. Simply being valued at six times 2010 revenues would suggest a quintupling of their current stock price. Either they are very poor at getting the word out, don't care about publicity, or the financial community has other reasons to avoid them (they are not on a major exchange, have a price less than $5, and there's always the possibility of private insider knowledge about significant internal or competitive issues.)

Company management is not very communicative, so speculation can be used to describe many aspects of this small but growing company but such speculation is not data, information, or a basis for definitive analysis.

DISCLOSURE LTBH of LMRA since 2004 and may have time to buy more at these low prices as they make progress and if I have discretionary cash (which I don't - let me check my lottery tickets).
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com)

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From: tktrimbath5/2/2012 1:28:45 PM
1 Recommendation   of 148
 
I don't tend to pass along my blog posts, but this one is a synopsis of Lumera's history in and out of GigOptix that others might find useful.

trimbathcreative.wordpress.com

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