Patagonia Capital Corp. Initiates Investment Coverage Of:
Omicron Technologies, Inc. (“OGPS” on OTC-BB)
Suite 400 114 Magnolia Street Bellingham, Washington 98225
Toll-Free: (877) 903 - 2288
Website: omicrontechnologies.com
Omicron has acquired the revolutionary APS digital imaging technology (developed by NASA), and is designing / developing consumer products for a rapidly-growing, multi-billion dollar market !!
OGPS also offers investors a play on Internet gambling - the company's first online casino is about to begin operations !!
Omicron is also developing a full-service financial information website that will offer free, real-time quotes on all US & Canadian stocks !!
A significantly undervalued company, OGPS is recommended to investors seeking exceptional capital appreciation over the medium to longer term!!
COMPANY PROFILE & PRODUCT LINE
Omicron Technologies, Inc. (“OGPS” on the OTC-BB) offers investors a rare ground floor opportunity to participate in two new, high growth industries – digital imaging and Internet gambling. Each of Omicron's business lines are capable of driving the stock to much higher levels, and if both the Internet gambling and the digital imaging are successful, well, who knows how far the stock could go…
Omicron's management believes that opportunities for rapid growth lie in bringing new technologies to market as popular consumer products. The company's website (http://www.omicrontechnologies.com) has a wealth of information on the technical aspects of OGPS business lines. The Omicron discussion thread on Silicon Investor can be accessed at: www3.techstocks.com ; for Raging Bull: ragingbull.com .
OMICRON's ACTIVE PIXEL SENSOR (APS) TECHNOLOGY
On October 16, 1998, Omicron entered into a joint venture with ViaSpace Technologies LLC to develop new imaging systems based on Active Pixel Sensor (APS) technology. OGPS owns 40% of the JV, and has a first right of refusal to acquire an additional 40% interest in the technology.
Developed by NASA's Jet Propulsion Laboratory (JPL) and CalTech, the APS technology is a light-gathering system or “eye” that utilizes amplified pixels or picture elements in a semiconductor chip. This technology allows for the miniaturization of a full-motion video camera to the size of a microchip!
Presently, most electronic imaging products are based on a sensor technology known as charge-coupled devices (CCD), which was developed by Bell Labs in the late 1960s. Basically, CCD's operate an array of cells, with each cell representing a picture element or pixel that converts light into an electrical charge of varying intensity. CCD's work well, but are difficult to produce and consume a good deal of power. APS technology, on the other hand, contains an amplifier in each pixel – the net result being superior performance, with greatly reduced power consumption, thereby facilitating miniaturization.
APS digital imaging systems are smaller, have superior video imaging capabilities, cost about one-fifth as much as existing CCD's, while using 100x less power than CCD products (imagine a camcorder battery that lasts for a week between charges, rather than just an hour or so), Other features of APS include the capability for wireless transmission of real-time video over distances of up to one kilometer, and significantly higher image and sound quality.
THE MARKET FOR CMOS APS TECHNOLOGY
The InStat Group estimates that the digital imaging chip market is growing by 60% annually, and could be a US$20+ billion dollar market by 2002. Peripheral Insight estimates that the potential market for digital imaging chips will be 100 million units in the year 2002.
Omicron intends to adapt its CMOS APS digital imaging technology primarily for new consumer products. The quicker that Omicron can get its products to market, the greater the share of this multi-billion dollar market it is likely to control.
INTERNET GAMBLING
Internet gambling is a rapidly-expanding business that began with a handful of players in 1996. Today, Christensen/Cummings estimates that there are about 25 million Internet gamblers; by 2001, upwards of 40 million people are expected to be gambling online.
In terms of dollar amounts, Christensen/Cummings and DataMonitor estimate total worldwide Internet gambling revenues of US$811 million this year, increasing to US$1.52 billion in 2000 and US$10.2 billion in 2002. To put these numbers into perspective, last year American spent about US$600 billion on baseball, movies and Disney products.
Millions are now using Internet gambling to wager on everything from sporting events to slot machines, table games and even the success of the new Star Wars movie. Australia and Antigua have licensed Internet gambling and several European countries are taking a closer look at it. Many public companies are participating in the growth, including some high-powered software firms and credit card processors.
What's happening now, and why growth in this industry so large now, and why will it be so great in the future, is simply the growth of the Internet. Currently there are 147 million people online worldwide. By the year 2005, experts predict that over 500 million people worldwide will be online, thus making the Internet a truly global medium.
OMICRON's INTERNET GAMBLING VENTURES
Over the past six weeks, OGPS has made two major Internet gambling software acquisitions, as well as announcing the launch of the Lucky Eight Casino. Collectively, these agreements have firmly established Omicron as a preferred supplier of online gaming systems and a leader in the Internet gaming industry. In the future, Omicron intends to develop and operate numerous casino websites targeting various market niches worldwide.
LUCKY EIGHT CASINO - On June 10th, Omicron Technologies announced the impending launch of the Lucky Eight Casino, targeting the Chinese speaking communities in Hong Kong, Mainland China, Singapore, Malaysia; the site will also be available in Japanese, Korean and five other languages. The Lucky Eight Casino website is intended for use by Asian web browsers and operating systems.
Many industry experts perceive the Asian market as "an untapped gold mine" for online gaming, with an estimated five million Internet users in China. Computer Economics Inc. projects that by 2005, China will have 37.3 million Internet users, second only in usage to the United States. More importantly, total gambling turnover in Asia is the highest in the world, surpassing US$600 billion in 1997.
OGPS projects that the Lucky Eight Casino website will begin generating earnings within 90 days of start-up; income to Omicron will be based on a percentage of the total net revenues generated, reaching 75% when total monthly net revenues are over US$1,000,000.
ONLINE GAMING SOFTWARE ACQUISITIONS & JOINT VENTURES - The Lucky Eight Casino announcements were followed by a joint venture agreement with Double Mastery, Ltd, a private Nevis, West Indies corporation on June 29th.
Double Mastery and Omicron will each own 50% of the joint venture company, which will license the premier turn-key Internet gaming software available to those interested in entering the online gaming industry. Each licensee would be supplied with a customized, full-service Internet gaming system, including virtual casino games and sports betting. Customers would be able to place wagers via a secure, online financial transaction system.
The gaming technology will be licensed to independent operators in exchange for a percentage of the net revenues generated by their casino websites. The joint venture expects to license over 50 casino websites within the next six months generating in excess of US$10 million in total revenues and over US$1 million in pre-tax income to Omicron.
On July 6th, OGPS acquired Cyberweb Systems Inc., a private company specializing in Internet gaming software development.
Cyberweb's programming and systems expertise complement the development and operations of Omicron's "Lucky Eight Casino" (particularly their online contact directory for Asian businesses and individuals). In addition to its focus on Internet gaming software development, Cyberweb also hosts and designs websites; the company is currently hosting fifteen websites and has the hardware capabilities to host thousands of websites.
As part of the acquisition, Omicron also gains control of a new, full-service financial information website developed by Cyberweb. This site, which Omicron will bring on line very shortly, will include free real-time quotes on all US & Canadian stocks, Java charting, COMTEX news and a free portfolio tracking system that will send an email when a stock price reaches a high or low parameter set by an investor.
With the addition of Cyberweb, Omicron is strategically positioned to expand its worldwide gaming and Internet-based business through software and website development.
Lastly, OGPS announced on July 13th that it had begun formal negotiations to acquire a private company engaged in the development of "next generation" BINGO software for Internet gaming Web sites.
Internet BINGO business is in the early stages of its development, with very few active gaming Web sites that provide the opportunity to play the game of BINGO for money. Analysts familiar with the worldwide gaming business predict that gross revenues from Internet Bingo could exceed US$4 billion over the next two years.
The unique BINGO software under development will not require the downloading of software and will not use computer generated numbers to play. Omicron's Bingo Web site will display, in real-time using a JAVA-based camera system, a "Live Bingo Hall" from three different angles showing the hall itself, the number board and the Bingo balls as they come out of the machine. With an average of 100 people playing per hour, the gross revenues generated could exceed US$26 million, of which Omicron would receive 40% of the gross.
NATIONAL CAPITAL MERCHANT GROUP
On July 15th, Omicron announced that it had entered into a financial consulting services agreement with National Capital Merchant Group, Ltd. (“NCMG”); NCMG will provide Omicron with advisory services regarding investment banking & capital sources, mergers & acquisitions, capital structures, financial transactions, broker/dealer & institutional investor relations, and reporting & disclosure.
The NCMG agreement is a significant accomplishment for Omicron, and will benefit the company in many ways!
First and foremost, NCMG is a well-capitalized fund that structures direct equity investments, mezzanine financing, or commercial lending. The NCMG fund was established to provide debt or equity financing to micro-cap or small-cap companies such as Omicron; NCMG will become a strategic partner of OGPS, and be very involved in the company's future development and growth.
We believe that Omicron's association with NCMG and the National Capital group of companies virtually assures OGPS' success in completing a significant equity financing(s) in the near future.
As an active Omicron market maker, National Capital will strive to ensure an orderly liquid market for OGPS shares. NCMG will also work within its nationwide network of broker/dealer and investment banking firms to promote Omicron as an attractive emerging growth company investment opportunity.
Lastly, NCMG and its Fast Track SEC Reporting Program will assist Omicron in preparing the necessary documentation to become a fully reporting company; OGPS expects to file its registration statement in August.
WHY YOU SHOULD CONSIDER ADDING OGPS TO YOUR PORTFOLIO !!
OGPS has a great future, and we recommend the company based on its strong potential for significant capital appreciation over the next six to twelve months.
We believe that Omicron offers investors a ground floor opportunity to participate in two new, high growth industries – digital imaging and Internet gambling. Each of OGPS' business lines are capable of driving the stock to much higher levels, and if both the Internet gambling and the digital imaging are successful, well, who knows how far the stock could go…
Omicron is well-positioned to take advantage of the explosive growth in online gambling. The company's Lucky Eight online casino is scheduled to begin operations in August, and will be a source of significant revenues. Over the past six weeks, OGPS has made two significant Internet gambling software acquisitions, with the goal of establishing Omicron as a preferred supplier of online gaming systems. In the future, Omicron intends to develop and operate numerous casino websites targeting various market niches worldwide.
Though the money from the Internet gambling is huge, the CMOS APS technology is a “company-maker” product that will drive the growth of Omicron for many years to come.
The number of applications for the digital camera-on-a-chip technology are almost limitless, and we believe that Omicron is correct in emphasizing development of consumer product and digital imaging applications for this revolutionary device. OGPS is well-positioned to achieve a dominant position in what will become a multi-billion dollar industry in just a few years.
With the involvement of National Capital Merchant Group, we believe that OGPS is virtually assured of completing one or more significant equity financings in the near future.
From our perspective as an independent third party observer, all signs do point to the fact that OGPS must be very, very close to locking up a multi-million dollar financing. Omicron has stepped up its marketing campaign in recent weeks, while continuing to aggressively build its Internet gambling business through acquisitions and joint ventures. We don't believe that OGPS would be moving so aggressively on acquisitions and IR unless the financing was nearly in place…
OGPS has all of the fundamentals in place – and now, with investors concerns about financings answered by the NCMG relationship, we believe that Omicron will have a very solid future, and that OGPS shares should return to trading at levels seen earlier this year (US$4+)
We view OGPS as a STRONG BUY at current prices, with exceptional potential for capital appreciation over both the medium and longer term.
CAPITAL STRUCTURE & TRADING RANGE (as of July 14, 1999)
Issued & Outstanding (fully-diluted): ~ 24.17 million shares
Est'd Float: ~ 2 million shares
1999 Trading Range: US$0.47 (low) by US$7.50 (high)
Current Bid & Ask: US$1.00 by US$1.13
Last Trade (July 14, 1999): US$1.12
For more information, please contact:
Gary Robinson or Rick Klassen - Investor Relations
Toll-Free: (877) 903 - 2288
E-mail: info@omicrontechnologies.com
DISCLAIMER
Patagonia Capital Corp. (“Patagonia Capital”) is not a Registered Investment Advisor or a Broker / Dealer. Patagonia Capital has independently prepared this report, drawing upon a range of public news and information sources. This report reflects opinions from Omicron Technologies, Inc. (the “Company”). Readers are advised that this report is issued solely for information purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy. The opinions and analysis included herein are based on sources believed to be reliable and in good faith but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. This information is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. The foregoing discussion contains forward-looking statements that are based on current expectations and differences can be expected.
The information contained herein has been provided by the Company to Patagonia Capital for information purposes only; in addition, the information contained in this report is not intended to be a complete discussion of information regarding some of the current and/or intended business activities of the Company. Readers are urged to consult with independent financial advisors with respect to an investment in the shares mentioned herein. Investors should review a complete information package on the Company which should include, but not be limited to, the Company's annual report, quarterly report, press releases, as well as all regulatory filings. All information contained in this report should be independently verified with the Company mentioned herein. Any opinions expressed in this report are statements of judgment as of the date of publication (14 July 1999) and are subject to change without further notice, and may not necessarily be reprinted in future publications or elsewhere. Neither Patagonia Capital nor its officers, directors, partners or employees / consultants accept no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
In order to be in full compliance with the Securities Act of 1933, Section 17(b), Patagonia Capital advises the readers of this document that it has received a fee of 1,500 free-trading common shares of Omicron Technologies from an unrelated third party as compensation for its efforts in researching, writing and presenting the information contained herein. Prior to Patagonia Capital issuing this report, the Company reviewed and approved the contents hereof. Patagonia Capital, its officers, directors, partners and employees / consultants may profit in the event the shares of the Company increase in value. These positions may be liquidated from time to time even after Patagonia Capital, its officers, directors, partners and employees / consultants have made positive comments on the Company.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. We encourage U.S. readers to review the investing information available with the Securities and Exchange Commission ("SEC") at sec.gov and/or the National Association of Securities Dealers ("NASD") at nasdr.com The NASD has published information on how to invest carefully at its website. Omicron Technologies is not yet a fully-reporting company with the SEC. The process is expected to be completed later this year, at which time, readers can review public filings (including financial information at the SEC's EDGAR page freeedgar.com.
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