Applied Visual Sciences (OTCBB: APVS)
is providing an update of ongoing business
activities as of June 1, 2011:
Dear Valued Shareholder,
I recognize that the decline in the APVS share price, on
extremely small trading volumes, has caused you a great deal of
consternation, and I assure you that I share in your concern. The
current share price is neither indicative of the business
development opportunities or revenue prospects currently being
pursued nor does it reflect current product development activities.
I remain adamant in my belief that success is within our
foreseeable future.
Before providing you with an update on the company's ongoing
business activities, I would like to express my sincere thanks to
those individuals who looked beyond the share price, understood the
near-term potential of the Company, and backed their belief with a
financial investment in APVS, as well as many of you that continue
to hold your APVS investment. I also want to extend my utmost
gratitude to the Company's employees, who continue to financially
sacrifice and persevere through the Company's working capital
challenges, yet remain dedicated, energetic and productive.
South Africa
Many of you have expressed your concerns over the South African
clinical trial performance of Signature Mapping TBDx. Universally
the biggest concern has been the protracted duration of the
clinical trial. While there have been 'bumps in the road' outside
of our control that have prolonged the completion of the clinical
trial, at no time have any of those been associated with the
performance of TBDx. As with any new healthcare product or
cutting-edge technology, the scrutiny of the scientific community
demands that we demonstrate evidence-based science grounded in
sound peer-reviewed research. Conducting the clinical trial
thoroughly, and in accordance with established standards, will
eliminate international challenges to the presented data and
diminish speculation about the technology's performance. We
currently have employees in South Africa and we are very close to
the culmination of the clinical trial. While the timeline has
expanded, the performance of TBDx has remained consistent with our
expectations, based on our considerable prior internal testing.
In parallel with the clinical trials marketing and sales efforts
are underway in South Africa. An initial TBDx system has been
purchased, with installation and training in progress at the NHLS
re-check laboratory in Johannesburg. Potentially, within the next
sixty days, an additional TBDx system or two could be purchased to
handle the large volume of slides processed by the re-check
program. In addition, we anticipate receiving an order for one TBDx
system, to be placed in Braamfontein Hospital, as part of the South
African Government's technology evaluation program. The system
would be used initially in a 30-day evaluation program to determine
workflow adjustments and potential deployment strategies, such as
centralized versus decentralized slide processing. Results of the
workflow evaluation will determine the size of the initial
order.
Our collaborative research partner, Aurum, has submitted a grant
request to a U.S.-based healthcare funding agency to purchase five
TBDx systems as a part of a larger proposal to outfit mobile vans
with full laboratories. The mobile vans are intended to treat
patients in the most rural areas of South Africa. We expect verbal
notification in June with final written notification and funding in
the August-September timeframe.
Upon completion of the clinical trial and deployment by NHLS,
our sales agent in South Africa will commence sales efforts to all
of the remaining Sub-Saharan African countries and private
laboratory systems.
India TBDxV System
Our R&D efforts have remained very active while awaiting the
completion of the clinical trial in South Africa. Significant new
technological approaches have been developed that have resulted in
new visualization applications and a derivate TBDx product TBDxV.
TBDxV assists microscopists in decision-making on the most
difficult of cases through the application of visualization tools
and digital imagery to enhance diagnostic accuracy. The new tools
are applicable to the visualization of both Auramine-O and
Ziehl-Neelsen (ZN) staining processes.
Our research staff has also solved what many experts have
explained to be the most difficult challenges in working with ZN
slides: the elimination of the need for oil immersion and the
ability to digitally focus and acquire images. The combination of
the newly created suite of visualization tools, with the ability to
acquire and display high-quality digital images of ZN slides, has
allowed us to introduce the new TBDxV product in India.
It has only been 30 days since the launch of TBDxV and our sales
agent in India Mr. Anoop Kaul has already generated tremendous
interest among the Federal and State health agencies within India.
To-date, Mr. Kaul has received soft commitments for more than
twenty systems, as well as firm commitments for five systems. We
are diligently working on completing the contracts, establishing a
banking relationship in India, and providing technical support for
his efforts.
The imbedded base we are establishing for TBDxV will form the
initial market for the TBDx automated ZN detection product, when
completed and available. Establishing a reference base in India is
extremely important as most of the world relies on ZN staining as
opposed to Auramine-O. China, Indonesia, and other Southeast Asia
countries are being targeted for both the TBDxV and the TBDx ZN
products.
Wellcome Trust
The Wellcome Trust grant program, Affordable Healthcare in India
Initiative, discussed in previous updates is taking longer than
expected, but I'm pleased to inform you that the process is moving
towards a successful conclusion. All indications from our Indian
agent, as well as our Indian partner -- The Institute for
Tuberculosis and Respiratory Diseases -- point positively towards
submission of final contract documents and oral presentation. We
anticipate this will result in approximately $2.5 million in grant
funding to transfer our existing automated detection technology
from Auramine-O to ZN with an August contract award and funding
commencement in October 2011.
Business Collaboration - Breast Cancer
Detection Products
Over the past three years, when research time was available, we
have worked on the development of a suite of breast cancer
detection applications for mammography and ultrasound modalities.
These applications include sophisticated visualization
capabilities, lesion quantification processes, and the automated
detection and characterization of breast cancer lesions. All of
these breast cancer detection applications have reached a technical
readiness stage whereby, in less than 180-days, we could commence
clinical trials and submission of an FDA application. A major
hurdle to the advancement of these technologies has been the
availability of working capital to complete the necessary work,
clinical trials, and FDA process.
We have been pursuing a business partner to advance this
initiative for the better part of a year. Our efforts have led us
to a potential business partner. The parties have recently
exchanged comments on a Letter of Intent that would create a
jointly-owned Company to finalize the product development and
establish product marketing and sales. The potential business
partner brings working capital, domain knowledge expert
radiologists, market awareness, and a sales force. Completion of
negotiations and formation of this business entity could
potentially be completed by yearend.
Product Branding
Over the past year we have been actively promoting the Company
and its products. We have submitted articles for publication, and
have been published in technology and medical journals. We have
presented at various conferences and participated as invited guests
at U.S. Government technology symposiums. We have reached out to
the international infectious disease diagnostic community and have
made numerous presentations to agencies such as NIH and NIAID.
Promoting the value of our products has led to a number of parties
interested in developing grant proposals to expand the scope of the
technology to other infectious diseases. We will pursue these
opportunities, as well as any new opportunities we uncover.
PinPoint
We have been actively involved in three wide ranging U.S.
Government proposals. We have teamed on two of the proposals with
large, well-known defense contractors and a federally funded
research laboratory. The teamed proposals were submitted to the
Department of Defense and the U.S. Navy, while the third project
was a direct submission to the Department of Homeland Security,
Science and Technology Directorate. On each of the projects we have
received extremely positive feedback and interest. Unfortunately,
all three projects have been deferred due to the Federal Continuing
Budget Resolution and operational uncertainties within the funding
agencies. At this point in time, we have no sense that any of these
projects will be funded this fiscal year or until the next budget
cycle.
In closing, we feel our technology is much more valuable than
the market is recognizing and we know it is incumbent upon us to
generate revenue to realize the vast potential and shareholder
value. We have built a growing base of support from governments
that need our technology and business partners that believe in our
technology, and we are within sight of seeing these relationships
come to fruition. As the leader of the Company, I can assure you
that we will continue to execute timely on those matters we can
control and we will manage, to the extent possible, those matters
outside our control. There is no doubt we will be successful, the
stakes are too high and we've come too far and sacrificed too much
to settle for anything less.
I encourage you to follow our business developments on our
Executive Blog, Facebook, and Twitter. You can connect to each of
those media via our website at www.appliedvs.com. Your continued
support is very much appreciated. The future for APVS is now, and
from my perspective it's very positive. I am firmly committed to
reversing the direction of the share price and to regaining your
unconditional support and belief in APVS.
Sincerely, Michael W. Trudnak Chief Executive Officer
Safe Harbor statement under the Private
Securities Litigation Reform Act of 1995: Statements in this
news release looking forward in time involve risks and
uncertainties, including the risks associated with the effect of
changing economic conditions, trends in the markets, variations in
the Company's cash flow, competition, celebrity programs, business
development efforts, technology availability and cost of materials
and other risk factors. Factors that could cause actual results to
differ materially are discussed in the Company's most recent
filings with the Securities and Exchange Commission.
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CONTACT: For Applied Visual Sciences: Michael Trudnak
703-464-5495 For Public Relations: Julie Shepherd of Accentuate PR
815-479-1833 Email Contact
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