INTERVIEW WITH OEII CEO.....
Found this on the stock Line website....Hope some of you find it
informative...I did... It's lengthy, but worth the read...
Regards....Ray
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Outer Edge Inc., through its wholly owned subsidiary Virtual Images Inc. is
one of the leaders in commercializing Virtual Reality technologies. The
company develops, manufactures, integrates and markets fully immersive, real
time, 360 degrees of interaction VR. VR is now becoming a thriving industry
developing real-world applications. With hardware technologies light years
ahead of where they were just 18 months ago, and prices dropping, VR software
developers like OEII will thrive.
With the stock trading near an all-time low of $0.04, the market is valuing OEII
at about $4 million. We think that's a compelling value by any standard -
especially for a hot technology company, offering investors one of the best
pure-play opportunities in the VR industry. We wanted to find out more, and
spoke with Raghu Rao, Chairman, and CEO of Outer Edge, Inc. Bottom line:
OEII's business is booming, and it wouldn't surprise us if the stock will be
trading at significantly higher prices very shortly.
S-L: In the early years of the Virtual Reality industry there was a tremendous amount of
hype. Today, the hype has given way to actual business. What are some of the real-world
applications of VR?
RR: It' s not hype anymore, that's for sure! A year ago the applications were limited by the
hardware and its costs, general acceptance of VR in real world application and the overall quality
and performance of hardware and software. VR, as many early stage, leading edge technologies,
was initially adapted for entertainment applications. Today the hardware is vastly improved and
cheaper, quality and performance is of very high order, software applications are more diverse and
general user acceptance is very high. Applications for VR today span many different industries such
as VR training medical simulation, walkthroughs and flythroughs of manufacturing plants, advertising
and promotion of products, walkthroughs of industrial and residential real estate, education based
applets for school and college and of course entertainment based games.
S-L: What sets you apart from other VR developers?
RR: As one of the pioneers in the VR industry, we have developed several competitive advantages
as it relates to product development. We have over ten years of VR development experience, and
possess source code library (VR software engine) can be leveraged to create a multitude of different
VR environments. We are one of the very few developers that has a debugged software (developed
completely in-house and top down) that is fully immersive, real time, 360 degree, simulation based
on cutting edge hardware and software. The speed and performance of our system is arguably one
of the best in the market and the rendering is very realistic. Our system allows users to wear a
headset and enter the virtual world and interact with it in 360 degrees and move within it.
We are a turnkey product company providing integrated software, and hardware solutions,
generating revenues from both ends. Our software is independent of the hardware platform, and
can/will run in practically any environment. We have a significant jump-start in the marketplace. In
general our development cycle is short and efficient with resulting high quality products starting at
very affordable prices. Our partial client list includes, MGM Grand, Walt Disney, USA Network,
Federated Department Stores, Honda, Cedar Point, Lazarus, MCI, Dave and Busters, Xs Studio
and other family entertainment centers.
S-L: What are your products?
RR: On the entertainment side our latest game is called Alpha 1 Rescue, which is a PC based space
game wherein the player is commissioned to rescue crew members from the spacecraft that has been
taken over by aliens. The apparatus is a standup pod with two armrests (for joystick controls). The
pod swivels 290 degrees. The back of the pod has base shakers and audio to provide special
effects. We do the entire development in-house which sets us apart from some other developers
who might take existing games and try to adapt them to VR.
I'll quote you from a recent news article (December 1996 issue) in VR News, the leading VR
industry trade magazine, "Virtual Images Inc.'s CyberPak and its game Alpha1Rescue produced the
highest visual quality game environment giving the immersed user the unusual pleasure of being able
to see quite clearly and interestingly what was happening. The system gave some indication of what
will be achievable as the next generation of VR technology become available. On offer at IAAPA
for USD $ 25,000, the system looks like excellent value".
We have within the last one year, added additional revenue drivers to our business. We are
developing customized VR products for corporate clients. One example is a simulation that creates a
virtual store meant for market research and consumer behavior patterns. This will enable retailers to
develop more effective selling environments. We are also developing a medical training simulation,
depicting the brain. Another custom project is for a manufacturing firm that is building a multi-million
dollar manufacturing plant. They want to present the virtual plant to their clients and vendors. As in
the past we continue to generate revenues from VR event sales where we rent our system to
corporations for grand opening, trade shows and such other major events in the respective
companies.
S-L: What's the price for a custom simulation?
RR: A lot of it depends on user requirements, the level of accuracy needed, the quality of the
textures needed, the complexity of the virtual world based on which the price could be anywhere
from $20,000 and up. We are finding that customers today are more than willing to make the
investment. Corporations are looking at VR as not only cost savings but also revenue generation.
One can only imagine the dynamics involved when clients can actually see their target world in virtual
reality AND be able to interact with it hands-on and provide immediate feedback. This eliminates
costly errors, communication losses, trial and error and resource transport costs to name a few. An
example is the manufacturing plant. A VR walkthrough simulation shows you what the actual plant
will look like and how it will function before it is even built. This can help one fine-tune the plans and
avoid costly mistakes and time losses.
S-L: Are VR simulations widely accepted in the architectural, and engineering
communities?
RR: Its spreading like wildfire right now! VR has a very high awareness factor in these fields, and
the use of VR simulation is becoming standard practice for large projects. It will become as much a
part of the of the architectural, and engineering process as blueprints are today.
S-L: So, VR is no longer the fantasy it was three, or four years ago. It is in common use by
business. VR is today where PC's were in 1984, becoming widely accepted by business...
RR: From the mass market perspective, we will likely enter that market in the next 12-18 months as
prices of hardware drop even further and as more software content becomes available.
S-L: Let's talk about the financial aspects. How many share are outstanding?
RR: We have 71 million shares issued and outstanding. A reverse split of 20:1 has been approved
by the shareholders. In 1996, we generated CDN $712,000 in sales and accounts receivable and
pending orders worth USD $875,699. In 1997 our goal is to generate $3-5 million. This is based on
our existing and potential business. We are bidding on some very high end projects right now, and if
we get them, we will likely achieve the $5 million in sales. Since January 1997 the company has
orders worth USD $300,000 being shipped - which is already faster than we expected.
Next year will be the "breakout" year for the company. This will result from three events: 1) Our
software will be client-server based thus enabling intranet/internet apps; 2) We are addressing the
transport issue which will make VR more easily accessible; 2) We will be expanding further into the
custom contract market as well as producing more game and education software titles for our
current and future installed bases.
The hardware is radically improved and the prices are dropping. New applications are being
developed. Today, customers don't need to be educated about VR to the extent of just a few years
ago. The mass market for VR will explode in the next 18 months. We have "paid our dues" over the
last four years, pioneering this industry. Now we have come to the point where we will start to reap
the rewards. Today, Outer Edge Inc. and its subsidiary Virtual Images Inc. is well positioned to
grow in this dynamic industry. One report has claimed that this market will be $1 billion by 1999.
Even by conservative estimates, we are already seeing an explosive demand for VR based products
in many diverse industries. |
