WLSA & RIMS

Feels like we’re swimming against the tide. All indices have started the year
in the red. Small caps in particular are getting whacked after hefty gains in
late 2004. The small cap-heavy Russell 2000 is -5% YTD.Pennyheaven Super 7 is in the black (+1.4%) and considering the above I’ll take it.
To see performance click the following link
http://www.pennyheaven.com/7tgy0hfg.htm

Newsworthy
Regulation SHO, designed by the SEC to combat naked shortselling, went into effect
on January 3rd. We applaud this action and think it will add much needed credibility to
the OTCBB market.
Basically, if any security is deficient (“fails to deliver”) more than10,000 shares (and
those shares are more than 1/2 of 1% of totaloutstanding shares) for five consecutive
days, then that security is flagged and put on the Regulation SHO Threshold list, which
is published daily on the Internet. After 13 days on the list market makers who are short
must then buy on the open market.

January 10, 2005 was the first day the threshold list was published. There were 374 stocks
on the NASDAQ list, including 96 on Naz, 29 OTCBB, and 254 on the Pink Sheets.In comments to the U.S. Securities and Exchange Commission, C.Austin Burrell, who is
providing litigation support and research for the law firms, said…illegal Naked Short Selling
has stripped hundredsof billions, if not TRILLIONS, of dollars from American investors,” and
have resulted in over 7,000 public companies having been “shorted outof existence over the
past six years.” Burrell said some experts believe as much as $1 trillion to $3 trillion has been
lost to this practice.

What is Regulation SHO?
http://www.thestreet.com/_googlen/markets/matthewgoldstein/10201467.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

Illegal Short Selling and the new SEC short selling rule
http://www.otcjournal.com/archive/listserv/20050104-1.html

SEC responses to Frequently Asked Questions
http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm

Regulation SHO Threshold List (includes OTCBB)
http://www.nasdaqtrader.com/aspx/regsho.aspx

Record Revenues and Radar Watch
Wireless Age Communications WLSA (.86) First they announce record revenues
for the 4th quarter (2004). Then they announce insider buying of 800,000 shares at .75.

Wireless Age is a consolidation of Retail, Wholesale and Engineeringenterprises within
the high growth wireless products and services industry in North America. Wireless Age
retail outlets are in Western Canada with expansion plans for the rest of the country. The
North American Wholesale Distribution operations are conducted under Wireless Source
distributing wireless devices and accessories to both consumer and industrial markets.
The engineering group, Wireless Works, is focused on the development of both consumer
and industrial wireless products and networking infrastructure.

23,495,216 s/o as of 11/12/04
Website: http://www.thewirelessage.com

RFID Play
Robocom Systems International, Inc. RIMS (.81)
Robocom Systems International Inc. develops, markets and supports advanced Warehouse
Management Systems software that enables customers to expandproductivity, reduce costs
and increase profits.

Global revenue from radio frequency identification tags is poised to grow from $300 million
in 2004 to $2.8billion in 2009, according to a study released by market research agency
In-Stat. Leading the charge is Wal-Mart stores who are requiring that their largest suppliers
attach RFID tracking “tags” on shipments sent to Wal-Mart warehouses. Target Corp.,
Albertsons Inc. and the U.S.Department of Defense (to name a few) have similar initiatives.

What is RFID?
http://www.silicon.com/silicon/hardware/storage/0,39024649,39120040,00.htm

RFID gets Wal-Mart boost
ttp://management.silicon.com/itpro/0,39024675,39126715,00.htm

We’ve been following RIMS since late 2003, which was a big year forthem, their stock
price appreciated ~ 800%. 2004 was mostly flat withtrading between .60 and .80 all year.
Recently they broke out on highvolume after announcing their 9th consecutive profitable
Quarter.
(Please note: RIMS is not a pure RFID play, they don’t make thechips. Their business
is Warehouse Management System softwarethat supports RFID).

4,540,984 s/o as of 1/03/05
Website: http://www.robocom.com