letter to shareholders...
February 17,1998
Dear Shareholder,
In the midst of the most event-filled period in the history of Projectavision, we wanted to pause for a moment and bring you up on date on the significant progress
we are making
Last year, in our letter to shareholders, we talked about the plan to move our Digital Home TheaterTproduct from the drawing board to the selling floor. Well, we
accomplished that goal and delivered our first $1,000,000 in sales in 1997. We also learned how difficult it is to bring a new hi-tech product to market, in spite of
the best efforts of our alliance partner, Texas Instruments, and ourselves.
It's scary being a one product, one technology company, and we knew we had to do something about it. So, in addition to bringing our Digital Home TheaterT
product to market, your management team was busy negotiating the acquisition of Vidikron, a world leader in high end projection televisions and a company widely
recognized as the top branded player in the custom home theater market. This acquisition, which was announced in January and is subject to financing and
completion of due diligence, brings us a profitable business with well-established distribution channels in the United States and 30 other countries.
Founded 18 years ago, Vidikron is a Milan-based producer of high-end home theater systems designed by Pinafarina, the trendy design firm that created the Ferrari
look. Vidikron had 1997 revenues of approximately $17 million, and has been consistently profitable. This acquisition gives Projectavision a high-end brand image
in the global market and significantly broadens our product lines and technology base. We currently plan to complete the acquisition by mid year and have engaged
Hambro America Securities, Inc., to serve as our investment banker and secure the necessary finances.
In the meantime, there is convincing evidence that the DHTT is likely to be an enormous success. Reviews in the trade and consumer media could hardly be better.
The February 1998 issue of Home Theater magazine, the major trade publication of the industry, reviewed the DHTT and called it the most revolutionary TV of
the 90's." Its six page review said, "In nine years of editing and writing TV reviews, I've never seen a set so different from anything else on the market." There isn't
enough space here to tell you everything in the review, but some of the terms used to describe the DHTT were, "super-cooI," "unique," "whole new display
technology," and "very sharp." This accolade came on the heels of Playboy Magazine, which featured the DHTT as the cover item of its Christmas holiday gift
guide, and Time's Digital Magazine which put the DHTT on its holiday list of "10O Perfect Gifts."
At the Consumer Electronics Show in Las Vegas in January, the DHTT was one of the hits of the show,, with hundreds of people jammed into our booth. Sun
Microsystems participated in our presentation using our DHTT to demonstrate their new Java Browser. The event was a real home run for us as we had
discussions with legions of high-end home theater dealers who want the DHTT in their show rooms. Because of the DHT'sT superior presentation capabilities and
unique features, there also are significant opportunities in the commercial market. We are rapidly moving forward to exploit this very large and promising segment.
The OEM channel of distribution is also being actively explored. The first quarter is off to a good start and we also plan to introduce our DHTT to the European
market in the first half of this year.
We are likewise proud of the formation of Manhattan Scientifics (OTC BB;MHTX), a new publicly traded company that is the successor to our wholly-owned
subsidiary, Tamarack Storage Devices, that was set up to bring revolutionary technology products to market. In the new organization, Projectavision owns the
majority of Manhattan Scientifics shares, which we view as a highly promising asset. Manhattan Scientifics is continuing to pursue the development of a holographic
storage technology under an agreement with the Los Alamos National Laboratory where the photo polymer scientists are working. In another promising project we
have just announced, Manhattan Scientifics is working with former Los Alamos scientist Robert Hockaday on the development of a miniature fuel cell which could
potentially replace batteries now used in such consumer electronics products as cellular phones and laptop computers. This effort is already attracting a good deal of
national media attention such as an article in the Business Week. You're likely to hear a good deal more.
Marvin Maslow is heading up our efforts behind Manhattan Scientifics. But all of us remain intensely focused on the major thrust of our business right now, the
successful roll out of the Digital Home TheaterT and completion of the Vidikron acquisition. We are optimistic about 1998. Our product is ready. The market is
anxious to receive it. We have made enormous strides in solving the technical and production issues which will permit us to move toward our ultimate goal of
profitability and solid returns to our shareholders.
We'll continue to keep you posted as events unfold as we have been doing. In the meantime, thanks for your support and understanding. This has not been an easy
process. We've had our share of disappointments and setbacks. But our company has never had more things going for it than we have today. There is every reason
to believe we are close to realizing the success that we have worked so hard to achieve for so long.
Sincerely,
Martin J. Holleran
President and CEO
Marvin Maslow
Chairman |
