I had the opportunity to visit the company yesterday morning and am very pleased:
The product that the company has produce for Lanier is 1st rate.
It took longer then first planned by Lanier and NCI. But Lanier kept
coming back with changes and what ifs to improve the product.
Also, it took NCI longer too, to engineer some of the changes. The
company, as a result of this has learned a lot more and will benefit
by the knowledge gained on future work (Intel).
A picture is worth a 1000 words, I will not do justice in explaining this product, but here goes.
When you turn it on, it speaks. On the model that was demonstrated
to me, it had a Bar Code Scanner, key pad, and other buttons to operate the unit. LDS screen to show the operation. It had a bar line that moved during playback or rewind to show location. (Like when you are downloading a program). I am almost positive that it led the Dr. through its' set up program a little, like input his ID, then the code number of treatment and finally the patent's ID (can be scanned in or use key pad). The model was in soft plastic. The production model with be in hard plastic. It has removalbe flashcard
slot on the side.
The cradle has ports so that it can be connect to the computer for down load and a scanner (to read the bar code into the computer).
As reported, the company has in hand orders worth $3 million from Lanier. From my understand, that represents 5 months production. NCI will have a two month lead time and it will be with "firm" orders from Lanier. Indications are that the profit margin is at least 30%.
The company is currently talking with a manufacture to produce the product. They are ISO certified, as are their suppliers. Company indicated they would announce who the manufacture is when it is all done and completed.
Shipment to Lanier is scheduled for 1st Calendar quarter 1999.
Intel:
Company could not go into details as to what the produce is to do. InTel wants 100 units to demo to its customers. Company indicated that right now that you can download a book (text) off the internet into voice. So, I guess it has to do with something along those lines. The money is less then Lanier, as the development is further along. But if it successful and sooner to market, then the company can get Lic and Royal fees from the product(s).
Music.
Lucent has gave NCI the use of its' compression
technology, if NCI would provide a "box" to it for its' demo's. Which it did. Not a bad trade off. Currently, the company has three (3) boxes with one provided to Lucent. The news release of Oct 23, 1998 from Lucent regarding "live Los Angels-New York Internet event" did not mention that the device that played the music was from the NCI "box". Maybe one of these days NCI will get a little line in one of Lucent's press releases mentioning that little fact. Wishful thinking.
Company did indicate that two companies has ask NCI to submit bids on
building music players. Will one or both bids get accepted is any bodies guess.
The July97 Demo was without compression, and the tune/song played for 84 sec's to took about 15 megs. With Lucents' decompression, NCI can get 1 meg of "CD quality" (not close to CD quality) per tune/song. Company believes the industry will go with Lucent as it is considering/protects all players. The downloading of a song off the hard drive onto Flashmemory and then played in NCI's music box was very easy and sounded excellent. Then shown how it can be deleted off
Flashmenory card. Again, very easy and quick. Within secs for both download and delete.
Company overhead is now running at about $100,000 (+ or -) depend on SEC filings/lawyers and consultants). This should drop somewhat once
production starts (no need for consultants). Did any one know that the fees required of a public Company to be paid for all the stuff required to file with the SEC is out of hand. I believe that the company could show a profit in the 1st Calendar quarter of 1999 and there after just with the Lanier contract. If Intel deal(s) bears fruit. That goes to further the profits of the company, then you have the Music box/technology which the company believe is the true money maker for it.
Stock price, company believes all the pre-paid warrant holders will be done/gone by yearend. That is part of the ugly history of the company.
The company indicated that Fred will be a guess on a local radio show on Nov 23. The station is KCEO 1000 AM on the dial. I will post the exact time, but it is in the morning and I am thinking 0800.
I did get to see and speak with Mr. Putnam (Robert) for a short time. I am very satisified with the results of our discussion. We all make mistakes and based on hind sight, thing would/could of been done differently. We all learn during the trying times. I am at peach with Robert.
Bottom line in all this, company is moving forward and it has been slow and painful for some of us long term investors. But we still need to be patience a little long for the cream to rise to the top.
I hope I have provided some useful information to all of you. If any of you have questions, by all means ask them.
The Annual Shareholders meeting is in the planning stages and looking like it will be in Jan99, 1st or 2nd week of the month.
Jim
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