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Microcap & Penny Stocks : Microphonics Inc. (mrps) -- Ignore unavailable to you. Want to Upgrade?

To: Jeff who wrote (729)	2/28/1999 11:16:00 AM
From: Kevin McKenzie	Read Replies (2) \| Respond to of 8189

Here's a paraphrased transcription of the January 19 interview. Note that this is not verbatim. I did the best I could to capture the meaning. I hope this helps anyone who is unable or unwilling to listen to the interview. It also helps me, personally to be able to read the interview and scrutinize it. Wall Street Reporter -- Jimmy Gayle - Microphonics interview: January 19,199 Q: How did MRPS get started? A: Evaluate tank bearings for MI tank, using ultrasound. Developed way to process signal and convert signals to audible. Determine if bearing is good/bad. Expanded into staggering different areas for evaluating mechanical failure using acoustical analysis. Automotive industry to use 40,000 Hz category to evaluate crank bearings, rod bearings, valves, vacuum leaks etc. Looking at the diagnostic area of the automotive industry is where microphonics has made its headway. That brought us into the NASCAR Winston cup to help regulate the safety by predicting failures of engines, transmissions and other on board mechanics. Q: So how does it work? The more turbulence the system detects, the less smoothly the bearings, seals, etc are running – Is this correct? A: Correct. When a mechanical system operates perfectly, the sound will "hum smoothly". As parts deteriorate, we can detect sound similar to "rolling over Frosted Flakes". As decibels and frequency go up, we can determine when the mechanism is going into failure cycle. Before use of microphonics, you would listen for audible indications of failure. By the time the problem was audible, it was usually too late. Using acoustical ultrasound you can detect when a part starts to develop its first imperfection, before it begins to fail. Q: What hardware/software does the technician need for detection? A: The hardware side is what we're getting into the market now. MRPS provides hardware to all of the automotive industry for diagnostics. The industrial side we provide it for bearings, electrical shorts, hydraulics and vacuum leak detection. Both of those entities are just hardware systems. Soundlogic, the third division of MRPS developed software to evaluate what that ultrasound meant. The software removes the human from the decision making and allows the machine to interpret the data and make the diagnosis. This gives us two entities for hardware. One in the automotive industry, which is staggering in size, as is the industrial market. Then the software entity pulls the other entities together, and allows us to "signature" each sound, just like voice analysis. So, for example, we can identify rod bearings on Chevrolet engine or a crank bearing on a Caterpillar Diesel. And that gives us an advantage. Q: Turn to current events. The supply contract with Ford. Is this indicative of your business model and growth. Are you primarily targeting OEMs or are you targeting Tier I's and Tier II's? A: We are primarily targeting OEMs right now. We have some other agreements coming in the near future. Basically they're all looking for the same thing, so that's what gives us an advantage in the automotive industry. We will eventually target the professional mechanic, then go to the shade-tree mechanic. Q: Tell us about the demonstration, beta and commercial process. A: We performed training seminars for interested parties to demonstrate the product capabilities. With these demos, the various companies came up with other uses. We did a demonstration for the Corps of Engineers. Once every four years they have a seminar for the chief engineers. MRPS was one of only three companies invited from the U.S. We spoke about the ability of ultrasound to predict mechanical failures. Only one of the 300 engineers was knowledgeable about using ultrasound to test mechanical integrity. Obviously the word has to get out about this technology; it's spreading like wildfire. They were extremely receptive to the technology. One of the most exciting projects we worked on was in helping the Olympic bobsled team test the efficiency of the runners on the ice. By analyzing the ultrasounds of the runners on the ice, we can tune the runners and make the bobsled go faster. The Olympic Committee was also able to use our technology to catch being using transmission signals to heat-up their runners. So they IC is using our technology to police the sport. Q: So is your technology going to become the standard for that sport? A: Yes it will. And it's also becoming the standard for NASCAR. For all the teams in all the divisions (truck, Busch, everything) Ultrasound, and our equipment will be used by all NASCAR divisions. Q: Ultrasound has been used for years in submarines and military. How did your product evolve from this earlier technology? A: In the earlier technology you would bounce a sound off another and listen for the return sound. We actually convert the return sound into signature frequencies and interpret the meaning of those return sounds. Q: Is it easy to train the technician to use the equipment? A: Yes. When we first started, our philosophy was to make the handheld device usable by just a high-school graduate with some mechanical ability. Usually within a day, people can become proficient. You turn the machine on, it calibrates itself and is ready to use. Q: This strategy seems to mesh with the way the world is moving toward turning high-tech equipment into appliances. A: That's what we learned in the beginning. At first our devices had all the little knobs and bells and whistles. We saw people didn't want that. They wanted to just turn it on, flip one switch; the device calibrates itself and it's "rock and roll". That really catapulted us off into the training, and the process really seems to be simple now. Q: Jimmy, lets talk about growth areas for your business. So far we've talked about auto mechanics. But you said the technology originated in the military, so it seems to me that the military must just have an (abundance) of vessels and ships that they need to be maintained. A: That will continue to be an area and it will probably have more growth than we would like for it to have. After our speech to the Corps (which maintains many of the army facilities), it looks like military will be an area that we're going to have to really hustle just to keep up. Q: Jimmy one final question:Tell us about your background and the background of the rest of management team. A: I have a chemical engineering background. A German gentleman devloped the way to interpret the data. He was contacted by the military. They only wanted to work on the military contract. I wanted to go domestic and put it out the public. They wanted me to move to Germany. I declined, so they sold me their patents and equipment. I hired Joe Roberts, who has an electrical engineering background. Then Bill Stodlemeyer. We've gone through five generations of the product, and taken it to the state-of-the-art it is today.