SOURCE: Braintech Inc.

November 20, 2007 16:08 ET

Letter From the CEO of Braintech -- Rick Weidinger

VANCOUVER, BC--(Marketwire - November 20, 2007) - Braintech Inc. (OTCBB: BRHI)

To the Shareholders of Braintech Inc.:

I am proud and optimistic as I write to you as Braintech Inc.'s Chief Executive Officer for the first time and share my thoughts on the current and future opportunities of our company. We will always manage and focus our business toward the long-term creation of value for our shareholders, employees, customers and partners. We are fully aware that our road may be bumpy with many twists and turns, but we pledge to work hard every day and exercise our best business judgment with this value creation focus in mind. We intend to track our market capitalization and report the results in future letters. We will work hard to ensure these values increase.

Braintech Inc. is a United States, micro cap, high-tech software company established in 1994. The company has invested resources over the last 9 years into the research and development of an amazing line of vision guided robotic software products and technologies. To date our core patented Single Camera 3D (SC3D™) technology has been followed by eight other patent-pending technologies. To be sure, we feel that THE emerging technology in robotics is Vision Guided Robotics (VGR). Many experts state that 3D robotic guidance is the "killer application" and Random Bin Picking the "Holy Grail." Braintech has gained the commercial seal of approval with an operating and installed base of VGR software. Additionally, the company is expected to release a patent-pending commercial application of Random Bin Picking (RBP™) by year end 2007. With these deployments and developments, the industry is beginning to take notice of our company and its technology. In its recent 2007 study -- Advances in Machine Vision Systems -- Frost & Sullivan noted the following: "Braintech Inc. has emerged as a leader in 3D guidance to robots by deployment of its Single-Camera 3D (SC3D) on major robots from major global robotics manufacturers. The general trend in the robotic guidance industry is that vision systems that are integrated by the robot manufacturer for guidance solve problems more efficiently." Our products work. We have the right products for the right markets and the company is definitely headed in the right direction. The market size of VGR units (both 2D and 3D) is estimated to increase rapidly by as much as 2,000% from 5,000(1) sold units in 2007 to 100,000(2) sold units in 2010.

However, we cannot realize this growth alone. Partners are key. Significantly, in May 2006 after years of involvement and development, Braintech executed an important Channel Partner Agreement with ABB -- an Industrial powerhouse based in Switzerland with an approximate market capitalization of $60 billion. We believe this Partnership Agreement was the right agreement at the right time for both companies. With this arrangement, ABB has recently been able to develop and introduce a new line of vision guided robotics it has branded -- TrueView™. At the core of TrueView is our vision guided software. I was personally able to witness impressive examples of this vision guided robotic system in Chicago, during the June 2007 International Robot & Vision Show. At this international industry show, ABB prominently demonstrated its TrueView capabilities front and center in its impressive floor exhibit. To date, TrueView has been installed in 31 plants, on approximately 155 robots, running more than 50 different applications. Our VGR systems have been installed in some of the most advanced assembly plants and for some of the best names in quality such as Toyota, Ford, GM, Honda, Chrysler, Nissan, Johnson & Johnson and Harley Davidson. We are excited about the global momentum and traction that the TrueView Systems brand is beginning to create. We are seeing increased attention to marketing and selling of the TrueView brand by ABB. It is our hope that we will be developing many more software tools for our partner in this industrial space. It is one of our most important objectives to broaden and deepen our relationship with this awesome robot manufacturer. Hopefully, we can nurture our relationship with ABB from a channel partner to a strategic partner as we are fully prepared to support ABB in any way we can as a company. Choosing the correct partner is a very important thing to get right. I believe we have chosen the right partner for the Industrial space of robotics. I hope we prove our nimbleness, responsiveness and ingenuity every day to our most important partner.

It was not a smooth and easy road in 2006 for the automotive industrial robotic industry. The 2007 World Robotics Survey noted that the automotive industry, which in 2005 was the main engine of growth for robotics, reduced its total investment by 17% in 2006. Specifically, the automotive industry in North America reduced its overall robotics orders by 42%. Although we feel this will begin to turn around and accelerate, the business interests and objectives of our company expand beyond Industrial automotive robotics. Braintech Inc. will begin to examine how we can leverage our existing software technology and experience in other vertical markets and seek the best partners worldwide. These are exciting times for Vision Guided Robotics and opportunities abound. Today's $11 billion robot sector -- mostly industrial robots -- will double by 2010, according to estimates by the Japan Robot Association, and it should exceed $66 billion by 2025. Most of the growth will be in non-industrial applications and will be dependent on vision. Bottom-line, we will strive to make Braintech the technological "enabler" for vision guided robotics in the 21st Century and beyond. When industrial and consumer companies as well as the military look for intelligent vision guided software, they will think of us. We fully understand that achieving this market success is no small task. We will constantly strive to develop software tools that enable our customers to be more productive. The result: Braintech will make money because it enables its customers to make "more money." I know of no better attitude for business success.

We will begin to focus on the emerging Service Robotic Industry. The International Federation of Robots forecasts Service robots for professional use to almost double from 40,000 robots in 2006 to over 76,000 robots in 2010. Furthermore, Service robots for domestic use are forecasted to increase 39% from 3.5 million units sold up to 2006 to over 4.85 million units by 2010. We will need to make a difference early in this emerging market. For example, we are holding internal strategic discussions regarding how best to work with Microsoft to bring the power of our cutting edge technologies to a broad audience of robot product developers using the Microsoft Robotic Studio (MSRS) platform. This would be a great way to introduce our technologies to the Service Robotic Industry.

How will we accomplish these ambitious goals? By having the brightest minds and best people developing and deploying our software tools and products from conceptualization to application to successful market commercialization. Our employees will continue to be our greatest asset. We have tremendously talented and dedicated employees -- currently 14 scientists, engineers and software developers with Doctorate, Masters and Engineering degrees but more importantly representing over 162 technical years of experience -- and we will work hard to attract additional talented members to our team. These employees/co-owners are the gateway to our success. I pledge to you that Braintech will provide a stimulating environment to create new products and refine the products we have. We will: expect performance, measure performance and reward performance. This may be our most important daily task -- to identify, recruit and hire the best talent we can AND reward them with ownership. I grew up in a business environment where every single employee was an owner. It creates the correct motivations and culture where everyone from the receptionist to the CEO is working diligently towards the same goal: creation of shareholder value.

We will not stop at our successes. Product development will be a cornerstone for our continued success. After all, we are a software development company. We have outstanding products in development. We have great minds focused on these developments. The industrial robotics market will soon see Braintech's Random Bin Picking Commercial Application. Our VOLTS-IQ™ software library for robotic developers in the service market takes steps every day toward coming to market. We are researching products for military applications. As the son of a father who devoted his career to the United States Military, the Military is an area that has always been dear to me. It will become the third side of the business triangle we are focusing upon, joining our industrial and consumer efforts. This is the compelling reason why our future company headquarters will soon be in the Washington, DC area. However, our talented product development team will stay in Vancouver, BC.

On the corporate front, our plan is to see, think, do, and execute, execute, execute. Our first action in this regard will be to implement a new organizational structure to the company. We will identify and recruit talented Business Developers who will spend their day in the commercial field touching and assisting our customers, selling our products as well as identifying potential new customers by asking them what type of products they need to be more productive and therefore more successful. This will create a somewhat flat organization that will focus on marketing and sales as well as new business development in vertical markets. We have already begun this process with the new hire of Pete Manias as Senior Vice President of Business Development. Pete is a very successful businessman who I have known and respected for over ten years. He will be responsible for building the business development team and will be the architect of our Revenue Generation Plan. He has designed many lead generation programs, which will assist our company as well as our partners. We will add more business developers in the coming weeks. Additionally, a subject near and dear to my heart and experience, we will diligently look for strategic combinations to grow our company in order to help our business, customers and partners grow. We will focus our strategic combinations on revenue, technology and resources. If we do not locate synergistic combinations, I am positive we can grow our business organically. The combination would only serve as a kick start to this growth.

We recently made two important announcements that I want to emphasize. On November 14, 2007 we announced the appointment of Rusty Lewis and Tien Wong to our Board of Directors. They bring vast entrepreneurial experience and success to Braintech. I am very pleased to have them on our team. In selecting these new directors, I was guided by the words of a wise man from Omaha, Nebraska who stated that Board members must be owner-oriented, business-savvy, interested and independent. I say we got all four of these in spades with Rusty and Tien. It is all about "business judgment!" We will add a seventh director by June 2008. This director will have a military background. Secondly, on November 15, 2007 the company announced its 2007 Third Quarter Financial Results. It was a historic result for our company. It was the first quarter of profitability for Braintech Inc. No doubt, this is fantastic news and represents a true turning point for our company. However, I believe in the old adage "under promise and over deliver." We should not expect this period of profitability to continue into the Fourth Quarter of 2007. Why? We are focused on growing our business and creating value. That is why we are here. We have begun to deploy growth capital and have begun to implement plans to deploy resources in an effort to make our company broader, deeper and thus generate revenue in the areas of our expertise. The Fourth Quarter of 2007 will not be profitable, the result of incurring these growth expenses. The day we decide to turn off our growth spigot, we can return to profitability. It is my firm belief that we need to wisely spend (now) the growth resources that will generate an increase in our revenue for 2008 and beyond while tightly managing the business in order to sustain our impressive operating margins. Although we cannot guarantee these results, as shareholders like you, we will work hard everyday and use our best business judgment to realize these goals.

As a closing point, I reflect that early in my business career, I was fortunate to be part of the sweeping changes in the telecommunications industry that brought fiber optics, the Internet, and the digital world to the forefront of American society. This new wave of intelligent vision guided robotics and the advancements, commercialization and value creation it will produce feels exactly like it felt in the telecom wave of the 1980s and '90s. As Yogi said: "Its deja vu all over again."

I cannot predict our future results with certainty nor can I tell you exactly what our company will look like in two to five years. I can tell you we will work diligently every day to make a bigger and stronger company that we all can be proud of. Prosperity is never guaranteed, but we will have the people, products and plan to take us there.

I want to wish you all a happy Thanksgiving. It is one of America's greatest traditions from its beginning as a celebration of the harvest almost 400 years ago and an annual reminder that we all have much to be thankful for in our lives.

Best regards,

Rick Weidinger
Chief Executive Officer
Braintech, Inc.

Disclaimer

Statements in this document that are not purely historical are forward-looking statements and reflect the current views of management with respect to future events and are subject to certain risks, uncertainties and assumptions. Forward-looking statements in this document include; the statement regarding the release of a commercial application of Random Bin Picking by year end 2007, the expectation of the development of more software tools for our partner in the industrial space, and the general and specific comments regarding the future of the industrial, consumer, service and military markets for vision guided robotics. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include risks and uncertainties such as technical difficulties in developing the products, competition from other suppliers of similar products, pricing that may not be acceptable to potential markets, and many other known and unknown factors. Readers should also refer to the risk disclosures outlined in the Company's 10-KSB and 10-QSB Forms filed from time to time with the SEC.

(1) 2006 UN Report on World Use of Robotics
(2) Anecdotal

Contact Information

  • Contact:
    102 - 930 West 1st Street,
    North Vancouver, BC
    Canada V7P 3N4
    T 604-988-6440
    F 604-986-6131
    www.braintech.com