October 26, 2004
President's Letter
Dear fellow shareholders of New Visual Corporation:
Hello, HelloSoft.
I am glad to tell you that New Visual has taken a major step forward. HelloSoft is a company that we are proud to be associated with. They have attributes that I look for, qualities that are desirable, in a partner. Let me describe them to you.
First, they get things done. A quick read of the press release section of their website will reveal that they regularly deliver finished software to their clients. This ability to consistently, reliably finish what they started will become very important to us as we move Embarq to market. New Visual requires a string of predictable, consistent deliveries and we believe that HelloSoft can give them to us. They get things done.
Second, they are in it for the long haul. They did not enter into this strategic partnership lightly. Let me tell you about the extensive research that they did before we committed to each other. All of the way back in April 2003 New Visual began talking with Bangalore-based software development firms. The HelloSoft engineering team immediately stood out. And to them, Embarq™ stood out from all of the other projects that they were looking at. Tom Cooper and I met the US-based corporate headquarters team for the first time in San Jose in October 2003. We had an extensive set of meetings where we talked about everything - the technology, the capabilities of HelloSoft, the corporate cultures, expectations, goals, resources - that we needed in order to figure out if we could work, and win, together.
In November 2003 HelloSoft and New Visual jointly went to Newton, MA to the headquarters of Adaptive Networks, Inc. to review the algorithms, software and hardware with Dr. Michael Propp. During this trip, Adaptive answered every question satisfactorily and provided a great deal of follow-up information, including estimations of time and resources required to finish the FPGA prototype and ultimately the ASIC. Also in November, HelloSoft came to Portland to delve further into the technology and into the business relationship with New Visual. They looked into our marketing and production plans. In all of this activity, both of us felt strongly that the other party was capable of winning, and that a great corporate fit was in the works.
In March 2004 we signed a development agreement with HelloSoft that was a big step forward, but also a complicated one. The way it is structured, the body of the deal outlines all of the business relationships, duties, "what ifs" and details that you would expect to see defined in a new Strategic Relationship. But it was silent as to the most important piece, which is the list of exactly what it is that they were to do, and how much it would cost. That information was moved to an attachment, and then left open to be defined later. The reason that we did this is that we on our side were simply not able to commit to beginning the program. But, we wanted to hold our "place at the table" until we were ready to commit. This complicated arrangement ended up working out great, and in fact this March 2004 is the main agreement to this day.
In April 2004 Dr. Propp from Adaptive visited HelloSoft in San Jose and gained a strong level of comfort that HelloSoft was capable of continuing with the development of Embarq™. He requested and received HelloSoft's Design-Verification Guideline, sample Verification Test Plan, sample High-Level design, sample RTL Design document, sample C Code and sample Verilog code, that showed the level of quality that HelloSoft brings to the projects that they work on. All of them passed Adaptive's rigorous scrutiny.
At last, in October 2004 New Visual was ready to define and sign the first amended step of the work that HelloSoft is to do. We announced it last week to all of you, and have received many positive comments and quite a few questions. Perhaps the most common question is a natural one, 'how many more steps will there be with them, how much is it going to cost, and when will the FPGA and ASICs be released?' In other words, many are wondering how the rest of the story will play itself out. I want you to know that many of these questions have been answered in the private relationship between HelloSoft and New Visual, but that I am not ready to release them to you yet. I can say that HelloSoft is capable of not only delivering the FPGA, but they can also take us to the ASIC and even beyond into other products. HelloSoft is committed to the long haul.
Finally, they are committed to our success. Back in March when Krishna Yarmalgatta, their Founder, Chairman and CEO, and I began discussing a relationship in earnest, he posed the question, "what can HelloSoft do to really help New Visual?" HelloSoft agreed to receive half of its payment in cash, and half in shares of common stock subject to Rule 144 for the final stages of development of Embarq™. Mr. Yarmalgatta jumped at the chance, because he believes, like we do, that New Visual stock will be eventually worth more than the cash would ever be.
By receiving stock, HelloSoft is putting itself in the same place that you, I and the other stockholders are. They will make their money when, and only when, NVEI is worth more than it is now. They, like me, believe that it will be.
By receiving stock, HelloSoft is making an investment in New Visual. Many shareholders have asked me over the last two years, "if New Visual's technology is so good, then why isn't a technology company making an investment in it?" Here is our answer. HelloSoft is a smart technology company. They have lots of money in the bank. They are growing and adding new clients all of the time. This investment in New Visual's future, which could ultimately be valued above a million dollars, is a very big deal. They are committed to our success.
You can see that HelloSoft gets things done, is committed to the long haul, and is committed to our success. This new relationship has been carefully crafted to take Embarq™ to the next level, and I am excited about it.
Please join me in saying hello to HelloSoft.
Sincerely,
Brad Ketch
President and CEO
New Visual Corporation
AI
