Yes - it costs millions of $$$ to launch new products. At the Annual Meeting, CEO Bob Root mentioned that US Robotics has spend $50 million launching their new personal organizer called PILOT. This kind of expense is exactly why he has taken the company in the direction of becoming an OEM (Original Equipment Manufacturer) rather than being a distributer and marketer of the products themselves. This means that NCII would produce the original technology and prototypes, and other companies would pay a fee to license that technology so they could market and sell it. NCII would get a certain amount of money for each item the other company sold -- and wouldn't have to deal with the costs of marketing, etc. In the deal with Voice It -- as I understand it -- Voice It would use their already-established 5000 distributers to sell the NCII products. (I'm not certain if the products would carry the Voice It name or NCII - I imagine it would be Voice It.) Voice It also has a low-cost manufacturing division off-shore (Malaysia, I believe), and this would be used to produce the NCII products.
Regarding the source of financing that Steve mentioned -- it came from private placements of stock. Had the company borrowed money in the conventional ways, it would have had to make loan payments, plus it would have been stuck with millions of dollars of debt on the balance sheet. As it is now, there is NO debt. NCII has a clean balance sheet. You can check these things out for yourself on EDGAR. Yes - there is still more to be worked out regarding details of the Voice It merger, additional capital needs, etc., but the company is in better shape now than it has been in a LONG time, and there is a business plan and good leadership. Bob Root deserves a lot of credit for what he's accomplished. I don't think any of us realize how much he's really done.
Betty |
