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Over the years, John has recognized a variety of opportunities [many of them introduced by our current team],
The latest iteration of our initial AP Metro partnership is Capax Resources, and it is, by far, our most promising
undertaking. Fashioned by a series of timely acquisitions [EAS, ACA, Zovy …] and an enormous investment in
strategically enhancing and rebranding our legacy archiving solutions for both on-prem and hosted applications,
Capax Resources is now a company in charge of its own destiny. And it is a destiny that has abundant
For the past several months, we have attempted to transition our organization from a highly effective support
and maintenance company [that thrived for several years as an Autonomy/HPE/Microsoft resource], into a
dynamic software company and service provider that focuses on delivering premier data archiving,
As a business developer, one of my core responsibilities is to provide maximum shareholder value. In the case
of the AP Metro partnership, I have worked throughout the past 20 years to help facilitate the opportunities that
have presented themselves from time to time for the maximum benefit of all the shareholders. From AP Metro to
Capax Global to Capax Discovery to Capax Resources, all of the various partners along the way have been able
to benefit by adroitly positioning both the company and the shareholder alignment for maximum benefit and
fulfillment. But my responsibility as a business developer goes well beyond maximizing shareholder value. Over
the past 40 years, the Advantage Co has proved to be a responsible and proactive social partner in the
communities we operate and thrive [in], as well as being directly beneficial to our employees, suppliers,
customers, and all of the families, associates, and friends that rely on us for income, security, stability,
With our ongoing success and commitment to growth and development, we are now ready to build more than
ever before. We have the opportunity to realign our company for maximum benefit to our customers, our
This past week, we had several key members of the Capax Resources team down to Naples, Florida, for a few
days of meetings and casual conversations [and a little golf]. We focused on our new alignment to ensure both
the realization of maximum value and long-term viability. This week’s meetings helped us to better define and
We are always at risk as long as we are licensing product from others, and, as great as a relationship as we have
with HPE, we will soon be dealing with a new owner of our software, Micro Focus. Micro Focus exists to
squeeze juice out of the orange that no one else had bothered to squeeze. Their army of lawyers and juice
squeezers will focus on the minutia of our licenses and contract to find a way to extract additional revenue for
The OEM licenses for Keyview and IDOL which were due to expire in less than three years [thus
hamstringing our current EAS and HPCA in-perpetuity agreements and leaving us open to predatory
Fortunately, John has been able to negotiate an extension of our ASP and OEM licenses to 2025 for an
additional $600k. Additionally, John had them execute the HPCA roadmap sign-off. This means that we are no
longer obligated to HPE to modify the HPCA code according to our contractual obligations as set forth in our
Nevertheless, Micro Focus will, inevitably, continue to look for hidden treasures, and our revitalization of EAS
and HPCA are definitely two hidden treasures. We can not underestimate them. They will be looking for every
way to make money off the carcass of their software regardless of our position. We need to better secure our
position BEFORE they get to us. The days of ignoring the need to make all upgrades, bug fixes, and
I am concerned about the inviolability of our Sceven software development and IP. Already, we have Chris
Ryan’s attorney claiming that we are substantially utilizing his proprietary code, and he is requesting 5% of our
revenue in instances where we utilize his code. I don’t know how many more Chris Ryan’s are out there, and,
although we are closing in on a mind-numbing $8M spend on software development, I don’t know just how
relevant, effective, and secure our IP will actually be. I have already voiced concern about our India connection,
That being said, our risks are minimal when you consider what Capax Global, Autonomic Resources, and
Having pointed out a couple of our inherent risks, let me turn our attention to our incredible opportunities. We
will now have three independent, yet collaborative, Capax Resources business ventures [Capax Discovery,
1. CapaxArchiveSolutions
Built on the EAS platform by our software development experts at Sceven, our archiving solution is now
recognized in the Gartner Magic Quadrant. Capax Archive Solutions is the acknowledged leader in the
Enterprise Archive Solution [EAS], previously called Exchange Archive Solution, was originally developed
by EDUCOM TS, an Ottawa-based software development firm. The first release of EAS occurred on
March 15, 2000. In 2005, EAS was being used by more than 2 million users globally and was a leading
solution in the archiving market as characterized by analyst IDC. In 2007, Zantaz customers included 9
of the 10 top global law firms, 11 of the Fortune 25, and 14 of the top 20 Financial Securities firms. On
July 24, 2007, EAS was acquired by Autonomy. Shortly after the acquisition, Autonomy announced that
EAS was integrated with Autonomy’s IDOL search technology. Analyst Gartner repeatedly rated Zantaz
The current updated version of our EAS based archive solution, CAS 3.0, has been positioned by Steven
and Bill as a cornerstone product for resellers who provide it as a managed service solution. Bill’s KNJ
relationship is a prototypical engagement. Steven abd Bill’s development of our international reseller
network will coincide well with JJ’s efforts to develop Capax International Sales as a resource for
Our go-forward CAS product will be a thin-client archiving solution that is built on our original EAS
software [and possibly without IDOL], and by the time we are ready to launch CAS 4.0 it in Q1 2018, the
development investment will certainly exceed $8M. This new CAS product will be further developed for
both on-prem and managed services environments. CAS 4.0 will be Capax Discovery’s keynote
product, but not our only product. We will have DataLight, migration tools, CISO Sentinel, and a variety
of new products that we are likely to develop, acquire, or partner with that will enhance the CAS
CAS 4.0 will have the thin client and Office 365 upgrades that Gartner suggested as being necessary for
us to move forward in their rankings. It will establish a secure base for us to build Capax Archive
2. Sceven,Inc.
At Sceven, we are first and foremost a software development company which builds flexible and reliable
archiving solutions that seamlessly enable our clients to store, secure, manage, discover, and analyze
When it comes to providing our world class CAS and ZAS solutions, the deciding factor in their efficacy
relies on the contribution of Sceven’s engineering, professional services, maintenance, and support
teams who consistently assure secure and reliable performance. Sceven is responsible for the
comprehensive support of our client revenue stream from beginning to end. It is Sceven’s main
objective to make certain that Capax Archive Solutions and Zovy are delivering the best of class
products and that they are at their maximum performance capabilities for all of our customers. In the
a. ProductEngineering
b. Pre-SalesTechnicalSupport
c. ProfessionalServices[Implementation]
d. ManagedServices
e. Hosting
Sceven’s guarantee that Capax Archive Solutions and Zovy Archive Solutions will remain the industry
leaders in information insight and governance will be fulfilled by a reorganized worldwide team of
software development experts that must demonstrate their ability to engineer state of the art product
As president of Sceven, Peter Mellett is responsible for all Sceven Development & Support activities.
With Peter’s legacy knowledge of our software and business practices, he will be able to fuse together
all of our product development, professional services, managed services, support, and maintenance into
We have believed for some time now that our development and support prowess should be the
foundation of an independent profit center. Therefore, in addition to providing the development,
maintenance, and support for Capax Discovery and Zovy, Sceven will be able to eventually provide
support for a variety of other software products and engagements. Sceven’s worldwide resources are
ready to unleash their development prowess to clients worldwide under the Sceven banner. This could
3. Zovy,Inc.
Built on the HPCA platform by the Zovy/Sceven development team, ZAS offers managed, hosted, and
cloud archiving solutions for enterprise customers who demand the most secure and flexible archiving
and eDiscovery resource without the demands of expensive infrastructure capitalization. Zovy will also
assume control of all the HPCA customers, as well as the Nearpoint customers, with the intention of
a. ZAS 3.0 This is the core managed services product that Zovy has developed based on HPCA.
This will continue to be developed as the go-forward product that Zovy bases its future archiving
b. ZAS CA This is the current HPCA on-prem solution that our legacy accounts are utilizing. Along
c. ZAS NP This is the current Nearpoint solution that our legacy accounts are utilizing. This will
d. ZHub Zovy’s Z-Hub is the only no-cost enterprise file sync and share (EFSS) solution. Although
we intend to continue to use this as an incentive product, pricing will be establish to substantiate
We believe we can maximize Zovy’s value by keeping it a separate company. Zovy now provides us
access to the federal trough with their incredible VA relationship, as well as a nice lineup of managed
service customers - but when you add in the legacy HPCA and Nearpoint customers, you have a very
profitable company with an incredible base of notable customers - and, most importantly, a huge
Based on the enormous value that the newly formulated Zovy now provides, we have decided to make
40% of Zovy available to investors based on a valuation of 6-10 times earnings. Zovy’s earnings will not
only be based on the current profitability of their current revenue stream, it will also include the
profitability of our HPCA and Nearpoint legacy accounts. We hope to demonstrate profits somewhere
between $4.5M to $6M. This would put the Zovy valuation at somewhere between $27M - $60M, and it
would mean a 40% sale would range from $10.8M - $24M. This would allow us to reduce or eliminate
our $12.5M debt and restore our cash flow. It will also, ostensibly, provide us with a strategic partner
Although they would be operated as separate companies, all three companies described above will rely on
Capax Resources HQ as the cynosure for all business activities. Additionally, Capax International Sales will be
The Walker Center will become the worldwide headquarters for three key operations by the end of the year:
Capax Resources HQ, Capax Resources International Sales, and Sceven Development & Support. As stated
above, Zovy will be headquartered out of our new Washington DC office, while Capax Discovery will continue to
1. CapaxDiscovery,LLC.
Over the past few years, Capax Discovery has acquired and developed the best-of-class information
governance solutions that go well beyond data archiving. We are now being recognized in the Gartner
Magic Quadrant, and our Archive Solutions are deployed in over 1,000 accounts worldwide. We have
transformed Capax Discovery by separating it from Capax Global and by making an enormous
This legacy entity will remain the owner of our agreements from HPE and other suppliers to license their
2. CapaxInternationalSales
This is our Capax Resources sales division, and it is responsible for all sales and marketing support.
Sarah Rusin is the Director of Sales & Marketing Operations and JJ Contessa is the Director of Sales
headquartered at our new Capax International Sales Office in Williamsville, NY. Our initial focus is to
Although we will obviously remain aggressive in our pursuit of new accounts, it is vital that we become
even more aggressive in our efforts to sell more of what we have to the customers that we have.
If we are going to continuously grow our business, we must identify everything we have available to sell,
then make it accessible, desirable, and deliverable. Next, we need to identify all of our customers, get to
know them better, make them accessible, and then connect with them [this is where the rubber meets
the road]. We facilitate this connection by building a better conduit between all we have to offer and all
We need to start by better identifying all that we have to sell and presenting it all effectively, while being
relentless in identifying all of our current customers [including the thousand or so customers that are
Information is the foundation of our business. How we deliver it defines us. Our information must
decisively define the value equation and concisely provide the roadmap to participation. Effective
information creates the narrative that is essential to energizing the profitable participation necessary for
the success of all our business activities. The information we provide will help to forge the confidence
and cache that are essential to establishing our value equation. This information must be accurate,
Marketing. The aim of marketing is to make selling superfluous. The aim of marketing is to
know and understand the customer so well that the product or service fits them and sells itself.
The business does not ask, What do we want to sell? It asks, What does the customer want to
buy? It does not say, This is what our product or service does. It says, These are the
satisfactions the customer looks for, values, and needs. The business defines its goal as the
satisfaction of customer needs. It demands that business bases its reward on its contribution to
3. CapaxResourcesHQ
This division is responsible for the comprehensive management of our staffing, compliance, reporting,
and performance. Mike McGrath is the new Capax Resources CPO. The entire Capax Resources staff
is to be employed by Capax Resources HQ and appropriately deployed by John Baiocco, Managing
Sometimes overlooked in all of the Capax Resources activities is the very essential service that APHQ
provides at no cost to the company. We rely on the APHQ team for all compliance and tax reporting;
APHQ continues to absorb the totality of the backend support costs based on the original gentlemen’s
agreement that the founding partners of AP Metro had over 20 years ago. This arrangement did not
anticipate or include Zovy and Sceven, but that has not been addressed or remedied. At some point this
arrangement will call for better definition, but, for now, Kerry and her crew continue to professionally
There are a few things that we all recognize need to be done before we are firing on all 8 cylinders. This list of
things to do includes some of the most essential things that have come to our attention over the past few
months, and we have to attend to all of them sooner than later. So, as you go through all that you have to do
every day, keep in mind that we are also counting on you to help us check off every item listed below. Without
1. CAS 4.0 Release. Announce to all of our customers [and the world] that CAS 3.0 is available in a Beta
2. Salesforce. Fully populate Salesforce with a minimum of three contacts for each account. 500
3. Users. Identify and contact the estimated 1,000 plus CAS, Nearpoint, CAMM, and HPCA users that are
not generating revenue for us. This is your pipeline. It is almost a limitless supply of potential ‘new’
4. Renew. Upgrade. Upsell. Sell more of what we have to offer to the customers we already have. It's an
5. ‘NoCustomerLeftBehind.’Thisshouldbeeveryone’smotto.Ourcustomersareourbusiness.
6. Account Managers. Assign all current accounts [about 500] to the appropriate account managers to
7. Full Deployment. Assign the staff from various internal divisions to be account managers to ensure full
8. Pipeline. It's time to complete the pipeline, everything that is active or being developed must have been
entered by June 1, 2017. In order to fully adjudicate the commission program, we need to know exactly
9. Open Season. All accounts that were not identified in the pipeline by June 1st will be considered open
accounts for anyone to pursue. In order to verify that they are indeed your account, there must be some
proof of recent contact and engagement, so, fill in that pipeline to ensure your account base is
10. Commission. Further develop the commission program with a points component to encourage
11. Resellers. Develop a reseller network along with full support and a comprehensive a certification
12. KNJ.IdentifyandorganizetheKNJprepayments.
13. DataLight.ReviewthenewDataLightcontractandhaveitexecutedbyJune1,2017.
14. Non-SalesProgram.Developanewcompanywidecompensationprogramforallnon-salespersonnel.
15. Corporate Structure. Review corporate structure for maximum effectiveness, flexibility, and license
16. Website.UpdatethewebsiteanddevelopasocialmediapresencewithFacebook,LinkedIn,blog,etc.
17. Videos.Dothecategoryleaders'videoswithMaxforourwebsites,socialmedia,andemailpromotions.
18. WashingtonDC.FinishfurnishingtheDCofficeandgetitopened.
19. Gartner. Send Gartner a report on our Q1 2018 release of CAS 4.0 including our Office 365 and thin
client additions. Clearly, Gartner has quickly become our best marketing touchstone. We need to make
20. Summer Summit. Put together a summer expo for Capax Resources personnel in Williamsville, NY the
week of July 10th. It would be great to get all of our world-wide personnel, resellers, associates, and
21. Advantage Co. Introduce all Capax Resources personnel to the various benefits of being part of the
22. PayrollReview.Doacompletehalfyearpayrollreviewpriortotheexpo.
23. Profile. Make certain that everyone's LinkedIn profile - as well as all their social media profiles - are up
24. Alta. Do a full Alta report on the inconsistencies of their accounting of Zovy assets and liabilities. We
25. Zovy.PrepareZovyprofileforinvestors.
26. Documentation of Financial History. Document the historic acquisitions and selling of the platform
that is now Zovy LLC. For instance the sale of Mimosa to Iron Mountain for $115M. This will be an
27. License Agreement between Capax and Zovy. Put a formal agreement on paper between Capax and
28. Services Agreement between Sceven and Zovy. A service agreement between Sceven and Zovy is
necessary to secure the path of resources for the services, support, development, and data center
29. Enhancement List. Eric and Marco will be creating and documenting an initial enhancement list to send
30. Pricing for Zovy ZHub. Establish the pricing for Zovy ZHub and update the website to reflect this
pricing. Marco will also be evaluating the update of ZHub to the new version of ownCloud or potentially
31. Capacity.Updatethehardwareandcapacityforourhostedservices.
32. Movement to a New Data Center. The movement of the Zovy LLC primary data center from Internap to
a new data hosting facility. This will start with an evaluation of the facilities in the Buffalo Region and
33. Acquisition of VA Hardware. Continue the acquisition process of the the consolidation hardware for
34. Evaluation of New Hardware for the Data Center. Quantification and validation of the scope, scale,
and magnitude of hardware needed to upgrade our current data center to meet the needs of our new
35. Creation of a Zovy Instance in a “FedRamp” enabled Environment. The creation of a Zovy instance
that is stood up in a FedRamp environment to move us down the path of being able to announce this
movement in security. This environment will be limited in size but done to show our ability to execute if
36. Zovy CA. Currently 23 companies have agreements to resell HPCA through our legacy contracts. We
37. Zovy NP. We need to create the branding behind Zovy NP [NearPoint] showing the new branding and
38. Branding Upgrade. Evaluation to be done on how hard it will be to modify the skin of the current
39. Capax Discovery Amnesty Program. Capax Discovery, the world leader in enterprise archiving
solutions, announced today an upgrade and amnesty program for the estimated 10M worldwide
Capax Discovery estimates that nearly 90% of the enterprise users of their Gartner recognized archiving
software are deploying outdated versions; therefore, as they roll out CAS 3.0, the latest ground-breaking
version of their unified archiving platform, they are encouraging all authorized and unauthorized users of
This free CAS 3.0 beta upgrade program will be available until the end of the year. On January 1, 2018,
the next iteration of CAS, CAS 4.0, will be officially released and the upgrade and amnesty program for
Mission Statement: Advantage Global Resources will provide the essential backend resources for the
origination, design, structure, financing, development, growth, reporting, monitoring, analytics, compliance,
Advantage Global Resources will be a combination of APHQ, Advantage Accounting, Advacovery, Capax
Resources HQ, Capax International Sales, Sceven, Advantage HR, tdt, and Smart Squad Design. We will be
Over the next several months, we will be renovating the second floor of the Walker Center in order to fully
accommodate, organize, and facilitate Advantage Global Resources. We will be building a fully staffed cafe’ and
Initially, all of the Advantage Global Resources staff will be paid by their current employer [Stereo Advantage,
TW&Co, APHQ, etc], but, starting January 1, 2018, they will be employed by Advantage Global Resources and
Although there are certain undeniable advantages to having support personnel on site, I am convinced that
bringing everyone together into a state-of-the-art facility and cohesive environment at the Walker Center will far
outweigh any on site benefit. From the recruiting and training of new personnel to providing continuing
education and upward mobility to the introduction of new technologies and business intelligence to team
interaction to business opportunities to client access to essential camaraderie and governance, I believe the