how fast can coii grow?
Let me answer your assumptions one by one
#1 You think that it would be impossible to ramp up to produce 1200 computerized breast imaging systems the first year.
I agree that a ramp up would be necessary, but 1200 systems the first year is quite possible.
Each computerized breast imaging system is made up of 5 major components which are integrated together into a system.
1. The supercomputer
2. The infrared camera
3. The examination table
4. The optical memory card reader/writer
5. The software to differentiate between benign and malignant breast lesions
1.They buy the supercomputer now from Silicon Graphics, Inc. SGI. I belive that his is an excellent choice. COII will never be able to make a computer with as much power at a price lower than they can get from SGI.
sgi.com
Let me tell you some things about SGI. They are a multibillion dollar company and they also make the worlds fastest computer called Blue Mountain for Los Alamos Laboratories used to analyze the safety and reliability of the US nuclear weapons stock pile among other things.
2. They buy the cameras from a company by the name of Bales Scientific, which specializes in the design and production of infrared cameras.
balesscientific.com
3. If I were in charge at Computerized Thermal Imaging, I would also outsource the production of the examination table to be built to COII's specification. One possible source would be Hillrom, located in Batesville, Indiana. The advantages of buying from someone like Hill-rom is that their facility and processes are currently approved to the FDA's GMP standards and they are the largest or one of the largest producers of hospital exmaination tables and beds in the US. This means that they can produce the examination tables to COII's specifications very inexpensively due to their economies of scale.
hill-rom.com
4. They buy optical memory card reader/writer from Drexler Technology, Inc. located in Mountain View, CA. The optical memory card reader/writer currently sells for about $3500 each. COII is a VAR for Drexler Technology which allows COII to buy these reader/writers at a discount.
lasercard.com
5 .Last but certainly not least. COII has created their own software which is the key to the system, because it is what allows the system to differentiate between benign and malignant breast lesions base on a very sophistigated algorithm. Once this program is developed it is vertually free to install.
Your assumption #2 is a 35% margin is high. That may or may not be true. You say that their SG&A costs will be quite high. I doubt that. They sould only need a staff of about 150 to 200 people given the outsourcing of most of the production. They only need to do the systems integration, testing and verification and installation. Sales is not difficult. We may find that they will sell the machines through another company. ie. their relationship with TSET.
Your assumption #3 is that they will have to issue additional shares in order to get additional capital for production.
This does not sound at all like their original plan. They planned to get about $200,000,000 through a line of credit from a bank ro investing company. I'm quite sure that if they told any large bank that they had orders for 1200 systems, the banks would be happy to provide them with a line of credit worth $200,000,000 for say 6.5% to 7% interest.
ftp://ftp.primenet.com/users/s/stkscty/Reports/CompImage/CompImage.TXT
or
click on the text copy on the right hand side of this page
stkbrkscty.com
I hope that this convinces you that my numbers are possible.
Of course, I could be right or I could be wrong. Everyone should make their own investmant decisions.
Good luck and God bless,
George
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