ATCO shareholder meeting notes by Jerrkowa, who was gracious enough to take the time to share.
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SHM REVIEW-
1. Woody expects the company to be profitable early in the third calendar quarter.
2. Woody has sold all the other stocks he owns and is putting everything into ATCO stock. He bought 40K in April and 50K in May.
3. Woody admitted is not good at running a larger company and will devote his time after the merger to promoting the company in the investment community.
4. The Discovery Channel is doing a special on ATCO which will be aired in Aug..
5. There will be a special SHM in Aug. to approve the HST merger.
6. HST will move its US offices into ATCO's facilities.
7. Harmon pays $10,000 per month to ATCO as a consulting fee. The Neo-Planar should start appearing in cars in 12 to 18 months.
8. The current float is about 14 meg. shares.
9. HST will get about 14 meg. of restricted shares.
10. The combined company will initially have about $50 Meg. of sales.
11. Revenue from military sales in first 4 months was more than total of last 4 years.
12. HST has developed automotive struts made from composite materials.
13. The gov't is investigating the possible use of HSS to explode land mines. It can generate high sound levels at the right frequency to do this.
14. Woody showed a Thomson SFT speaker, but has no idea when they will start production.
15. ATCO technology may find application in controlled fusion. Experiments have shown hi energy sound can generate the required heat levels.
PRODUCT ON DISPLAY-
1. A high end jacuzzi made by Dimension One Spas fitted with Neo Planar speakers was in the courtyard. They were about one foot square and one inch thick. The sound was impressive. Woody estimated about 20,000 speakers per year from this company.
2. There were several HSS exhibits broadcasting recorded messages.
3. A high end home speaker system consisting of two Neo Planar towers and a Pure Bass sub-woofer were on display in the main meeting room and they easily filled this large room with very high quality sound. This system is now available for purchase by stockholders for $980. It is hard to judge speakers without having a known system to A-B compare it with, but to me they sounded as good as my $3,000 home theater system.
HSS-
1. A complete HSS system consisting of the electronics and two emitters was shown. It is about 8"X18"X5" thick and can be sold for about $200.
2. Atco can supply finished systems with an easily programmable built in MP3 player.
3. Target applications include vending machines, museums & expositions, drive thrus, store displays, retail, point of purchase, Kiosks and Industrial communications.
4. Most potential customers want systems not licenses, thus the HST merger.
5. The revenue stream will include licenses, finished systems, NRE charges, and component parts made by HST.
6. Distortion which was a potential major problem area, is now less than 1%.
7. The design is now stable, reproducable and highly reliable.
8. Manufacturing cost has been reduced by 90%.
9. Woody repeatedly talked about vending machine applications. It appears that negotiations are progressing well with companies in this area.
CASH FLOW-
1. ATCO has $2 million available cash.
2. Since profitability is expected within a few months, the current burn rate is low.
3. Woody stated that it is highly unlikely that any additional financing would be needed even if the HST merger did not go thru.
GOVERNMENT-
1. Potential applications-
Military-Shipboard Comm., Non-Lethal Tools, Secure Comm.(HSS in battlefield), PYSOPS, Mine detonation
Homeland Security- Portal sensing, Explosive Detection, Comm., Non-Lethal Tools
Facilities-Public Access, Megaphone (HSS), Security
2. Current licensees include M2, GD and HST
see M2 at
www.m2technologiesinc.com
3. Evaluation installation (comm.) on USS Winston Churchill passed with flying colors.
Next installation (apparently not for evaluation, but rather permanent use) will be on hangar deck of USS Carl Vincent (about 400 emitters, as I recall).
4. GD has entered into negotiations with ATCO for exclusive rights to military applications.
MY COMMENTS RE GD-
If favorable terms can be negotiated, I think the deal giving exclusivity to GD would be a positive. My personal experience with dealing with the government is that, while it can be nice add on business, dollars of revenue per hours of effort expended can be very low. It takes a lot of time and TLC to get contracts.
Woody indirectly alluded to this when he noted that while present shipboard "sqawk boxes" are borderline useless and ATCO's are far superior, present suppliers are fat and happy and have no interest in changing designs.
GD obviously has excellent connections and remove this drain on ATCO's talent which then would be available to tackle the much larger non-military market.
MY FINAL COMMENTS-
After hearing the presentation, the HST merger makes more sense to me.
In spite of having a vast portfolio of innovations and valuable patents, ATCO has been held back from exploiting them because of limited personnel and funding. HST has assured Woody that they will not play any financial games and that the cash HST now has will still be there when the merger is finalized. ATCO will now have the financial and personnel resources to much more rapidly exploit their technologies.
Woody now realizes that while licensing can be a great deal, many potential customers have no interest in licenses, but rather want working product.
The design and manufacturing process for HSS and Neo-Planar have evolved so that they are now simple, reliable, reproducable and low cost. HST obviously recognizes this and sees a win-win situation. |
