Tricorder - by zho, 20th April '99 (Part 3 of 3)

HISTORY
Tricorder was formed in 1994 by Dr Guy Fowler (CEO) and Christopher Flockhart (Technical Director). £1m was raised at the time of the OFEX flotation in 5/97, with a further £1.75m being raised in 2/98 from 3i Group, Amadeus I (a VCT backed by Microsoft and Bank of America) and others. The company graduated to AIM last June, and a further round of fundraising last November bought in almost £3m. They have made losses of £6,000 (sic) to 3/97, £828,000 to 3/98, and the current rate of cash burn will be 2.5 to 3 times this now that they are in a position to put extra resources behind development and marketing. Losses to 3/99 should be mitigated now that sales of static products have begun, but it is reasonable to expect a loss of around £2m before the company moves into operating profit towards the end of the current fiscal year.

BUSINESS PLAN
The November offer document outlines a dual-focus strategy with one strand "aimed at direct entry into the film and broadcast market. [This is].. intended to ensure that the market potential is more fully exploited and revenue grown more rapidly than would otherwise be possible for a young company possessing a widely applicable technology."

The second strand focuses on licensing the technology for application in other areas, and the offer document says that the company is in "discussions with many potential customers, distributors and licensing partners."

Recent newsflow suggests the likelihood of a greater probability of success in medical and forensics areas than was suggested in the offer document, and it might well be that the company will decide it wise to further investigate and promote these areas.

BOARD
Board members are surprisingly heavyweight for a company capitalised at around £11m at the current share price of just over 50p.

Chairman Dr. Gerry Thomas was President and CEO of LSI Logic Europe Plc (1987-93) and President and CEO of Schlumberger World Group (Systems, Instruments, Transducers) (1980-87). Previously he was President of Fairchild Europe Inc and MD of ITT Semiconductors Ltd.

Sales Director Michael Fleming is the MD of the Printed Picture Company Ltd., a Carlton Subsidiary, and was previously International Sales and Marketing manager of Quantel Ltd.

Financial Director Charles Bunker is the principal of Chartered Accountants Kerburn Rose, and was previously the head of Corporate Finance at Moores Rowland.

Non-executive director Ann Glover is the co-founder and MD of VCT Amadeus I.

Non-executive director Dr. John Forrest is Chairman of Brewton Group, a non-executive director of 3i Group Plc, and VP of the Royal Academy of Engineering. He previously led the privatisation of IBA Engineering and held posts of CEO and Deputy Chairman of the new company, NTL, between 1991 and 1996.

Non-executive Dr. Robert Hawley was CE of Nuclear Electric Plc and CEO of British Energy Plc. He is also the President of the Institution of Electrical Engineers.

SUMMARY
All investment involves risk, and investment in early stage technology companies carries far more than most. That said, I think that the potential for this company is startling. I have researched both the company and competing technologies as thoroughly as I can, and I find no exaggeration in the Company's claim that "Tricorder Technology is a world leader in advanced 3D imaging systems and software.". They are simply streets ahead in registration technology, and were they to be listed on Nasdaq, analysts and investors would be beating a path to their door. As it is, the current lack of interest in small companies and our apparent lack of comprehension of technology companies condemn Tricorder Technology to an unrealistically low valuation. I would not expect this to be the case for too long.

POSTSCRIPT
Many people find it hard to digest a lot of technical detail in one go, and I have simplified these sections to keep them readable. I have written in greater detail on these aspects in the past, and these pieces can be found by using the search engine on UKShares or the HemScott Information Exchange at http://www.hemscott.com/infoex/exchange.htm. You should also be able to find notes from last year's AGM and EGM, together with more in-depth discussion of target markets.

Tricorder is headquartered at Harefield, Middlesex, and company reports, the November offer document, and a press pack can be obtained by e-mailing mail@tricorder.co.uk or by phoning 01895 820920. The website at http://www.tricorder.co.uk carries recent newsflow, and pdf copies of the offer document and last annual report. In other respects the website is less than adequate, but I have been told that it will soon be redesigned.

zho 20th April '99

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