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Gizmondo firm goes to Nasdaq

Looking for 'larger investor base'

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Tiger Telematics (TT), the Florida-based company behind the Gizmondo handheld games console, has posted its annual report for the year to 31 December 2004. It makes fascinating reading - particularly since the company yesterday announced its plan to begin trading its stock on Nasdaq. To date it has been an OTC stock.

Last year, before it finally shipped the Gizmondo, TT lost $99.29m, its latest filing with the US Securities and Exchange Commission (SEC) reveals. It expects to report an operating loss of $210m for the first six months of 2005, "principally due to development costs for the Gizmondo and non-cash expenses associated with shares of restricted common stock issued for services". In other words it has bartered shares in lieu of cash payments.

The Gizmodo was released in the UK on 19 March. The console is scheduled to ship in the US in October - or Q4 2005, as the SEC filing cautiously puts it.

Curiously, TT claims "during 2005, the Company launched the Gizmondo first in England and then in the European market". Its website indicates that the console is only available in the UK. The use of the past tense in the SEC filing is puzzling - presumably the Gizmondo is in continental Europe later this year.

Despite the losses, TT has gained funding, including $73.1m worth of investment capital during the year, and it issues some 24.7m shares which brought in over $200m.

That's the reason for the Nasdaq listing request. If granted, it will "permit the company to engage a much larger investor base as it permits retail solicitation orders and research by analysts. Tiger's common stock will then be considered a marginable security for loans", TT said today.

As a starter for analyst research, what about the following?

Gizmondo Europe CTO Steve Carroll was given a $231,324 car by the company in Q1 2005. The subsidiary's company secretary, Tamela Sainsbury, got one too, though it only costs $70,000. She may not need it, since she can ride to work with her "co-habiting partner", who happens to be Steve Carroll. Sainsbury was paid nearly $150,000 in base compensation during 2004, plus $83,000 in bonuses.

Carl Freer's 2004 "automobile allowance" for the year stood at just over $115,600. Stefan Eriksson's was $104,095.

Freer and Carroll each earned more than $1m in 2004, while the former gained more than $1.1m in bonuses. Their 2004 stock awards amounted to 975,000 and 1,492,587 shares, respectively.

Companies can, of course, recompense their senior employees as they see fit, in line with what they perceive as the going rate for the jobs they do. But wth Tiger gearing up to launch the Gizmondo in the US - and, given what the report says, in Europe too - it might have been more prudent for the start-up to award its senior staffers less extravagant-seeming packages.

Especially since the company was forced in July to lay off an unknown but believed-to-be-large proportion of its UK workforce. ®

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