Immersion stockholders meeting

a report on the stockholder meeting by bfrankusa on the IV MB:

>>Here's a summary from the meeting:

• I was bullish on IMMR before the meeting, and I'm even more bullish after the meeting.
  

• Two board members and selection of audit firm ratified.
• Tone of meeting was upbeat and positive.
• Clent gave a shortened version of a presentation he has been making to investors. Here's the long version
  http://tinyurl.com/lnjgxj

• He made the point that he started as CEO on 4-28-08. At that time, IMMR had 5 lines of business and 12 executives. Today, it has 2 lines of business (Medical and Touch) and 7 executives.
• Q1 '09 revenue was 36% Medical and 64% Touch. Going forward, they expect the split to be more like 40% medical and 60% Touch.
• In Medical, they had not introduced a new procedure for 2 years. They are now launching new products.
• I got a demo before the meeting of the lung cancer diagnostic procedure that was launched in March of this year. The demo was impressive, and it is hard to imagine any physician not wanting access to this training before doing a procedure on a human for the first time.
• Dan Chavez, Senior VP of Medical, said during the demo that IMMR has identified 300 procedures that are candidates for simulation. Business model includes adding new procedures to existing customers' machine by adding software and interchangeable attachments.
• Back to the meeting, Clent showed a short clip of a BBC video on medical simulation in which IMMR machine was being used and Immersion was mentioned by name.
• On the automobile business, Clent mentioned that Toyota is using haptics in its high-end Crown model in Japan. He said historically, many features that start out in the high-end autos eventually work their way to the main stream. He used as an example BMWs use of haptics in its 7 series to begin with, and that technology is now in its 5 series and 3 series.
• Clent talked about the growing use of touchscreens in mobile and other devices and how haptics improves the user experience. Says IMMR can build a great business by getting 5, 10, and 25 cent royalties by increasing penetration of haptics on touchscreens.
• Clent showed a Samsung commercial in Korean where the use of haptics was featured and even the phone model had the English word "haptic" in it.
• He believes that Korea sets the trends in the world for new mobile phone innovations and that "haptic" is now part of the lexicon in Korea.
• Both Samsung and LG have announced that by 2013, all of their phones will be touchscreens (I don't think he said how many will have haptics).
  
• Discussed integrating haptics into chips. This helps solve IP piracy issues in places like China and India, and it gives IMMR amazing distribution for its technology.
• Clent repeated information from the last conference call--$81M in cash as of 3-31-09; debt free; expect small cash burn in Q2 and expect to end the quarter with $75M in cash. For the second half of '09, expect to be cash neutral. This will be achieved by reducing expenses and getting a small increase in revenue.
• Said there will be some announcements of important deals over the next 2 quarters but can't say anything right now. Can't talk about things until IMMR's customers announce them first.
• There was a discussion about how to increase revenue from Touch line of business. Clent said they have identified 8 categories of segmentation for touch screen effects. For different levels, they believe they will be able to charge higher prices.
• Clent mentioned that there has been a lot of recent high level publicity for IMMR, including a Wall Street Journal article, a demo at the D7 conference, and a demo on Fox News.
  
• He talked about the D7 conference (video here http://tinyurl.com/ravln4) and said that significant interest was generated among the heavy hitters in the industry who attended the conference. He mentioned names like Ballmer (Microsoft CEO), Bartz (Yahoo CEO), and Mossberg (conference organizer and technology columnist for the Wall Street Journal).
• Someone asked how IMMR got invited to D7 conference. Clent said that it was the fruit of new PR efforts started shortly after he became CEO.
• Clent said the most significant thing about the D7 demo is that it was the first time IMMR had demonstrated dual-finger feedback to the public. This is the ability to have independent haptic effects for two different fingers on the screen at the same time (typing with two thumbs lets both thumbs feel different haptic effects simultaneously).
• Apparently, this blew away Walt Mossberg, who is a big iPhone user. His biggest complaint about the iPhone is its lack of haptics. His burning question was when he could get this on his iPhone. Of course, nobody at IMMR is saying anything.
• Clent was asked about the casino market and why things have not moved faster for haptics touch screens in that segment. Clent said that it is taking longer than expected for IMMR and 3M to build haptic-enabled touchscreens that can last in the very harsh environmental conditions of the casino. He didn't go into much detail on what the challenges are, but I can imagine that frustrated, inebriated gamblers might give the screen a pretty good thump if they lose too much money.
• IMMR's biggest mistake was to start talking about the casino opportunity too soon.
  
• He did state very strongly that this remains a very promising segment for IMMR. The opportunity is coming, and the company could start to see revenue from it sometime next year.He said that gamblers spend more money when the touch screen has haptics. His term was "directly impacts coin drop."
• Clent mentioned the following numbers--every haptic-enabled touch screen for casino gambling needs 4 motors that they sell for $12 each. I took that to mean that IMMR gets $48 in revenue for each touchscreen, and I'm guessing about 80% gross margins.
• Clent was asked about competition. He said its different in the two lines of business.
• In Medical, IMMR is one of three market leaders. IMMR is suing the other two, Mentice and Simbionix, for patent infringement. If/when those suits are settled in IMMR's favor, the company should become the clear market leader.
  
• For the Touch line of business, the biggest competition is a "good enough" user experience without advanced haptics. He believes that as more users experience the type of effects only Immersion can offer, that they will find their previous user experience unsatisfactory. He likened it to, "Once you've seen Paris, most other cities pale in comparison." Once you've used Immersion, "good enough" will no longer be "good enough."

That's all I have in my notes.