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In August 1998, it underwent a restructuring, with my old friend Ed Molina taking over as president. Since that time, it has moved quickly to emerge from a strictly R&D company with technology ahead of its time to the practical commer-cialization of that technolo-gy. That technology comprises full-screen, full-motion Video-on-DemandÔ with unlimited scaling. It provides high-speed, high-quality video over the Internet using existing Internet technology. The licensed content it offers consumers is fully digitized & fully self-contained. It does not require plug-in or other special equipment. Sales, contracts, diversified partnerships, & other key announce-ments are scheduled to take place this year. These should strengthen the company & further improve its competitive position. Another goal of USVO is to consolidate its Canadian & U.S. exchange listings & move to a more senior exchange before the end of 1999. Business USVO's business strategy is to: (1) Establish synergistic strategic alliances; (2) Increase Internet applications; (3) Establish sales, contracts, & other income-generating licensing agreements; (4) Increase market awareness; & (5) Diversify into related areas. Strategic Alliances: USVO is in active negotiations with several companies to establish partnerships & other alliances of mutual benefit. These include alliances with: (a) Large cable TV service providers in the U.S., Canada, South America, Asia, & Europe; (b) Internet & intranet service providers, sites & enterpris-es; (c) Manufacturers of set-top cable TV boxes; (d) Manufacturers of cable modems; (e) International server & other computer hardware manufacturers; (f) International security firms; (g) U.S.-based airline companies; (h) Sports-related enterprises; (i) Colleges & universities; (j) Public & regional school systems; & (k) Content providers in the fields of education, corporate & motivational training, movies & other entertainment. A recently announced strategic alliance involved the addition of high-end, state-of-the-art wavelet-based compression technology to USVO's Video-on-DemandÔ technology. This allows full-screen, high-speed, high-quality streaming video & video-on-demand via the Internet using existing telephone lines & standard TV-cable. It also allows USVO to optimally utilize fiber-optic cable, which is being installed worldwide. The addition of wavelet compression to USVO's technology provides video images significantly faster & at a higher degree of resolution than previously available methods. The wavelet compres-sion being incorporated by USVO was developed on a proprietary basis for the U.S. Navy & is just now becoming available for commercial use. When incorporated into the USVO technology, it significantly overcomes bandwidth restrictions & eliminates the blockiness & slowness of current technologies, all at a lower cost. It allows extremely high compression ratios while retaining broadcast quality, an essential feature of USVO's technology. USVO also will use the wavelet technology in creating & encoding digitized content that is self-contained, & thus does not require a plug-in or other special equipment by the user. Internet Applications: USVO's technology has been demonstrated in Internet applications & provides full-screen, full-motion, high quality video & audio faster & with much greater resolution than that demonstrated by competitors. Although consumers have become accustomed to slow downloads of blocky & often dark & hazy video, the USVO technology makes these shortcomings a thing of the past. Not only can it provide fast, real-time streaming video without blockiness or interruptions, it can provide instant access to digitized content stored on servers. This opens limitless opportunities to advertisers who wish to show brief interactive video clips on the Internet instead of static banners. It also applies to sports franchises that transmit video & other data to several locations using satellites & other technologies where bandwidth is both limited & expensive, & to cultural, social, entertainment, & other providers that are concerned about the quality of the video they transmit to their audiences via the Internet & that wish to increase capabilities while lowering cost. Sales, Contracts & Licensing Agreements: USVO already has several computer servers with its patented Video-on-DemandÔ technology in successful deployments & agreements in a variety of applications. These include an agreement with one of Canada's largest telecommunications companies, Metronet, to provide Video-on-DemandÔ to its system; & a deployment at Project LEARN in Connecticut, which supplies technology & innovation to 34 regional school systems & most other public school systems in the state. USVO is actively negotiating licensing agreements with major "content" owners & providers to digitize & encode content on a royalty-fee basis. This avoids the prohibitive up-front costs to content providers usually associated with this process & dramati-cally increases the amount of digitized content available to targeted audiences. Because USVO's technology includes a self-contained encoder & decoder, consumers do not need to purchase or download a plug-in or other device to view the digitized content. Market Based on the current value of the home video & related markets, the Video-on-DemandÔ market is potentially worth well in excess of $20 billion; the Internet market for true Video-on-DemandÔ is virtually incalculable. USVO has the patented technology to significantly participate in these & related markets. Marketing has replaced R&D as the company's primary focus; greater emphasis is being placed on bringing increased public, industry, & market awareness to the exciting capabilities of the its technology. Markets targeted include education, entertainment, training, & e-commerce. Education includes colleges, universities, & K-12 where video can be delivered to rooms or offices & viewed on desktop computers or TV. With instant digital access to enormous libraries, instructors will be able to create specialized video programs in a matter of minutes; students will be able to access material at their convenience; the inefficient current method of copying, mailing, & logging videotapes will be eliminated.
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Entertainment includes residential access to movies, sports, & other entertainment resources at the user's convenience, eliminat-ing the time restrictions & limited choices of pay-TV & pay-per-view TV. Additionally, people will have instant access to regional information services such as weather, traffic conditions, sightseeing, etc. Training includes corporate & motivational training; procedures & other instructions needed by workers in any profession from medical & surgical to architecture & design to factory & construction workers. E-Commerce will be greatly enhanced by true, high-quality Video-on-DemandÔ. Research has shown that interactive video is far more "sticky" than static banners or other advertising currently deployed on the Internet. Markets are virtually limitless & include books, music, videos, travel & hospitality, clothing, & many others. The transmission vehicles targeted for USVO's technology are the Internet, Intranet systems, cable TV, wireless, & satellite. Although optimally designed for fiber optic cable, currently being installed worldwide & which provides almost unlimited bandwidth for video & data transmission, the USVO technology provides fast, high-quality, full-screen, full-motion video & audio using even existing twisted pair technology & common home modems. Management Edwin Molina is president. He owned several communications-related businesses in CA & CT, & has been with USVO in a variety of functions since 1990 & was named to his current position in 1998. .... Daniel J. Sciro is VP. He was president of two NY telecommunication companies. He developed & deployed global telecommunication technologies for clients including the U.S. government, supplying ship-to-shore communi-cation technology during the Gulf War. .... Ronald L. Patton is COO. He served for 20 years as VP of integrated performance decisions at Analysis & Technology, & as senior VP of R&D at Sonalysts, Inc. He worked with a team from Paramount Pictures to create special audio effects for "Hunt for Red October," which received an Academy Award for sound effects. .... Stephen Kutner is president of the Programming Division. He has more than 25 years in entertainment programming, including serving as VP of MGM Studios. .... Anton J. Drescher is a consultant to USVO. He is a Certified Management Accountant & has been in private practice since 1980, & is a director &/or officer of several public companies. .... Kevin T. Yorio is investor relations director. He has been a financial & investment consultant, heads a number of Investment Clubs, & is completing a degree in Finance at the University of Connecticut. .... Anthony J. Castagno is strategic media, investment, & marketing communication counsel. He is president of The Rowe Group, an independent consulting firm, & has more than 15 years corporate public relations & marketing experience. He teaches Mass Media & Communications at the University of Connecticut, & has authored numerous articles & reference materials. Financial Status (9/30/98) Since USVO is just emerging from R&D status to commercial-ization of its technology, it has not as yet had significant revenues. Revenue production is expected during the next two quarters. When data is made available, I will include it in updates.Recommendation I recommend USVO for both midterm & long-term apprecia-tion. This situation is at an ideal point in its history for those of you who like to get in on emerging growth situations before the investing public is very aware of the significant potential involved. They are beginning to become aware -- the price has moved from $0.07 to $0.25 in the past few weeks. But this situation is really just at its very beginning in terms of future potential. When you have a company that has an emerging technology that the market wants & needs, you have a potential long-term winner. I like the fact that USVO plans to diversify by establishing different applications of its technology. Some of its long-term plans include:
Will all of these things be implemented within the next few months? I doubt it, but knowing Ed, I suspect they will all happen at some point. He's done a good job of turning this situation around so far -- I predict he'll continue the task with great vigor. USVO just announced it received preliminary approval of its European "Store & Forward Video System" patent application. This system is based on the U.S. patented system covering the transmitting of video programs to remote locations over a switched telephone network. I particularly like the potential alliances that COO Ron Patton is negotiating, any one of which could result in very attractive cash flow. Contact Call Kevin Yorio at 800-625-2200, fax him at 860-572-7753, or write USVO at 70 Essex St., West Mystic, CT 06388. e-mail: kyorio@usa-video.com www.usvo.com ...continued on next page, click here |
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