Yes - I got it and I will post it here so those that are not on the E-Mail mailing list can read it. It also sounds like they are doing work for companies that had not sign an OEM agreement yet but need the company's expectise. It is only a matter of time (IMO) and we will be in the black. Jim
To: investor@norriscomm.com
From: Wendy Ravenel <wendy@norriscomm.com>
Subject: Letter to Shareholders
Dear Norris Communications Shareholder:
This letter is intended to inform you of the current status of the
business
and operations of Norris Communications and present management=92s vision
of
the strategic direction of the Company.
In January, a substantial restructuring of the Company took place that
included the installation of a new management team. At that time I was
named
President and now oversee the day to day operations of the Company. By
way
of background, I have been an officer and an employee of Norris for more
than two years. I was formerly the Vice President of Business Development
and in that role was instrumental in securing our agreements with Sanyo
and
Lanier. Founder Elwood G. ("Woody") Norris has once again become an
active
member of management and is presently serving as the Company=92s Chief
Executive Officer. Since these changes took place, management has been
working more closely than ever with the board of directors in addressing
the
strategic direction of the Company.
The foundation for our business is based on our proprietary technology
leadership. The technology designed into the Flashback and our VoiceLink
product has positioned us as experts in the use of Flash media for
storing
data, such as sound, pictures, and even video. The development of our
proprietary MicroOS=D4 for both of the industry standard Flash memory
formats---Intel=92s Miniature Card and CompactFlash---positions us as one
of
the few companies in the world with experience developing for both. In
addition, Norris Communications has been granted a patent on the use of
removable Flash media as storage for our hand-held digital voice
recording
device. We believe other companies will need this ability in order to
develop viable consumer products.
Recently, two Norris Communications products were selected as Innovations
=9297 winners at the 1997 International Winter Consumer Electronics Show.
We
believe that this prestigious achievement has opened several doors that
had
previously been closed to us and is a testament to the value of our
technology. With our cutting edge knowledge in the field, other
companies
needing this technology have approached us to work on developing new
products for them based on our technology. Norris Communications recently
announced contracts with two major companies--Sanyo and Lanier. These
companies are the foundation of our new strategic direction.=20
Sanyo recently signed a multi-million dollar OEM (Original Equipment
Manufacturer) contract with the Company in which they agree to private
label
our existing digital voice recording and editing products, to complement
their existing analog voice dictation product line. Sanyo has the
infrastructure, brand recognition, marketing muscle and expertise
required
to be successful in retail channels and is better suited to sell our
products. Their dealer/distributor network is already in place. The
product
is currently shipping in the U.K. and we are currently negotiating to
expand
the sales territory into the rest of Europe.
=20
Lanier Worldwide, Inc. also has signed a multi-million dollar OEM
contract
with Norris Communications. Under the terms of the agreement, Lanier is
funding the development of exclusive Lanier products based on advancement
of
our MicroOS operating system and other proprietary recording technology
that
the Company has developed. These are but the first of what we anticipate
will be multiple products developed under the agreement. Our relationship
with Lanier adds credibility and is expected to open doors to other OEM
opportunities.
The detailed terms of these contracts are not being made public because
to
do so might jeopardize the competitive status of the products involved.
Other OEM contracts are under discussion with other companies seeking to
penetrate the digital voice recording industry and we look forward to
future
announcements as they materialize. The reason these companies are now
interested in discussing development contracts with us is our withdrawal
from retail sales and our new focus on developing OEM products. This
allows
us to directly market our products to OEM customers that otherwise would
compete with us in the same retail channels.
=20
These various contracts generate revenue for the Company in a number of
ways. First, the Company still controls production of these products and
will receive revenue from product sales. In the case of new products
being
developed, we receive non-recurring engineering fees ("NRE") that pays
for
development. In the case of operating systems or patents, we will receive
licensing fees and/or royalties.
With respect to manufacturing, our OEM agreements and our relationships
with
Sanyo and Lanier have allowed us to negotiate and obtain very competitive
rates from outside contract manufacturing companies. This opportunity
has
allowed us, as a key part of our restructuring, to cut our overhead
considerably. Our decision to outsource manufacturing has enabled the
Company to reduce its workforce and slash its monthly "Burn Rate" by 55
percent (a figure the Company hopes to further reduce by an additional
10-20
percent in the near future). This decision also has enabled us to
generate
some badly needed cash by selling off unneeded manufacturing equipment.
We
also are currently negotiating with our landlord and hope to relocate to
smaller, less costly space in the very near future. =20
It is our belief that when Norris Communications originally developed the
Flashback, it was ahead of its time. Now, at long last, the consumer
market
is demanding this new type of dictation and voice processing device. We
are
forming technology alliances and conducting pioneering research in speech
recognition to develop next generation products. Traditional dictation
companies recognize that they must keep up with rapidly changing
technology.
Hence, companies like Lanier, Sanyo and others recognize that it is
faster
and less expensive to acquire technology from third party companies such
as
Norris rather than to develop it from scratch themselves. This fact more
than anything else is what is driving the new vision of Norris=
Communications.
It is no secret that the Company faces several challenges if it is to
survive and prosper. That being said, we believe that the Company has
taken
the right steps and can be most successful as an OEM provider. With this
strategic direction and our award-winning technology, we can become a
profitable technology leader. We look forward to your continued support
as
we serve you, our shareholders.
Sincerely,
=20
Fred Falk
President
Wendy Ravenel, Investor Relations/Public Relations
American Technology Corporation & Norris Communications Inc.
12725 Stowe Dr.
Poway, CA 92064
(619) 679-1504 or (619) 679-2114
(619) 486-3922 (FAX)
wendy@norriscomm.com=09
ATC Web Site - atcsd.com
Norris Web Site - norriscomm.com |
