********NEW 10 PART ADOT INFORMATION SERIES.....PART 2 ***********
[NOTE: Please read all
information in the
PART 1 header preceding
THE COMPANY found in
message # 852 of this
thread]
PART 2....THE RISKS
This coming May 22 will be the second anniversary of Advanced Optics Electronics , Inc. (ADOT). It is true that most startup companies don't survive to have a second anniversary. For various reasons they succumb to the to the snares that catch them and end their existence . ADOT management seems to have anticipated many of these fatal pitfalls and has planned their course accordingly.
Startup Company Risks
Quoting from ADOT's Offering Circular 01/21/97 (OC) : "The Company has limited operations to date . Its' proposed operations are subject to all the risks inherent in a new business enterprise. Therefore , the likelihood of success of the Company must be considered in light of the problems , expenses , difficulties and delays frequently encountered in connection with the startup of a new business and - the competitive environment in which the Company will operate".
( Be sure to see Leslie Robins bio' in PART 8.....MANAGEMENT & EMPLOYEES )
Technological Risks
From OC : "The unique spatial light valve technology PATENTED (my caps) by ADOT represents relatively little in the way of conceptual development risks , in that WORKING PROTYPES HAVE BEEN BUILT , TESTED AND DEMONSTRATED (my caps) to prove that the physics involved are sound . The primary risks involved with this technology are in the same area of optimizing the final product's design for performance under field conditions and meeting the Company's preliminary production cost projections."
" The first prototypes , though extremely useful in providing the physics , had to be made from process materials that were anticipated to degrade over time . The equipment needed to produce units with extremely long useful lives is what has been identified for purchase within the first 30 days after sufficient funding is achieved ".
" Further risks do exist with regards to the speed with which the appropriate mechanical design and environmental factors can be accomplished and accommodated . The units must perform well in all lighting and weather conditions : therefore the structure required to stage , power and control the 14'by 48' displays must be designed taking all of these factors into account . ADOT expects to form early alliances with key potential customers to take advantage of their expertise in these mechanical design factors."
" The digital signal processing requirements needed to control the display's output and manufacturing processes required to fabricate all key components are well within industry standard specifications and should require relatively little additional design or adaptation."
Competitive Risks
OC : " ADOT will compete against established forms of electronic display technology . Although the Company believes it's planned products will be superior to these established products , there can be no assurance that customers will prefer the SLM light valve technology sufficiently to be willing to pay for it at the prices at which it will be offered . In addition , although ADOT has performed extensive due diligence related to possible direct competition and , to ADOT's knowledge no other company is currently working on like products , the Company nevertheless believes that its' products and technologies will be subject to substantial competition . Many of the Company's potential competitors may possess substantially greater product development capabilities and financial , technical , marketing or human resources than does the Company."
EDITOR'S NOTES
Brief Financial Overview
Since ADOT's inception it has been able to finance the majority of its' operations through the issuance of common stock to the public as well as "private placement" of restricted common shares .
The most recent financial arrangement was a private placement $1 million financing in convertible subordinated debentures ( 18 month restricted term ) announced on Oct. 21 ,1997 . This arrangement should enable ADOT to meet its' financial obligations until the two electronic billboards - which are in production - are delivered and paid for in July of this year .
Also either directly or indirectly the private placement financing has enabled the Company to invest in a 22% ( 790,000 common shares ) stake in the medical technology company Biomoda . ( See Brad's information in the ADOT header on this thread ).
The ADOT board of directors and especially its' president Leslie Robins should be credited for a job well done in guiding the Company through a difficult financial terrain during its' first 24 months of operation . During this time ADOT has not acquired an oppressive long term debt burden nor has it brought to itself and its' shareholders a rampant increase of outstanding shares .
Management's stringent cost controls and conservative financial practices bodes well for both the Company and its' shareholders and sets a sound base from which to move forward in the next stage of growth .
Market Climate
The outdoor advertising industry is estimated to be nearly a $2 billion industry . Currently there are approximately 390,00 billboards on federally controlled roads in the United States . With the outdoor advertising industry growing at over 7% yearly the billboard industry is fertile territory for ADOT's electronic T V picture quality billboards .
Competitive Product Comparison
Viewing a September 30 , 1994 Department of Defence research paper entitled " Building U. S. Capabilities in Flat Panel Displays " it is stated on page 5 : " Despite the current market position of U. S. industry , important opportunities nonetheless exist . U. S. firms currently are demonstrating laboratory prototypes employing today's dominant flat panel display technology , active matrix LCD that are considerably superior to any product yet shown anywhere in the world."
( Remember this statement and that it was made 4 years ago ).
A recent comparison of ADOT's SLM Electronic Billboard with its' closest ( Japanese ) rival's LCD product is nothing short of astounding !
Advanced Optics Electronics SLM billboards have the following advantages :
(1) A computer quality contrast nearly 20% better .
(2) Greater brightness - over 30% brighter .
(3) Lowest energy consumption - 80% lower !
(4) Lowest price - nearly 90% lower ! ...1/10th the cost of rival BBs!
In addition to these benefits ADOT intends to offer remote-control-by-satlite as an optional feature . With this remote control feature tailor made ad/pictures can be changed during the day as the driving audience changes . ( See ADOT thread message #329 by Andrew T for related remote control information ).
In just 4 short years since the Department of Defence report was issued ADOT SLM technology and its' resultant MARKETABLE SLM Electronic Billboard has surpassed all foreign billboard products in crucial feature benefits and economy of cost !
Very soon ADOT technology will have set into motion far reaching and possibly radical negative changes to the foreign ( mostly Japanese ) muti-billion dollar LCD industry .
( More about this later in this series ).
|
