To OTC Journal Members:
 

NuTech Digital (OTC BB: NTDL): Will Deliver Best Quarter in Company's History

After a mildly disappointing 1st quarter, NuTech Digital looks like it is going to live up to my previous expectations for exciting and explosive growth in both sales and earnings.

Today, just after the market closed, NuTech announced it had delivered $600,000 of its previously announced largest order in history, and those revenues would flow to the June quarter results.

Moreover, NuTech revealed the company was on track to deliver its normal $1 million in ongoing business, and therefore deliver the best top line quarterly revenues in corporate history. At this time, I expect NuTech to deliver at least $1.6 million in the June quarter, and as usual be cash flow positive from operations.

It looks like NuTech is going to take its bite out of the burgeoning market for DVD content. At the end of 2003, it was estimated 59 million US households owned DVD players. DVD sales in the US alone are forecast to be $14 billion in 2004, with a surge to $21 billion in 2005.

Assuming the $1.6 million number is achieved, NuTech will deliver by far the best top line quarter in corporate history. If the company can continue to deliver at this level, the annualized growth rate over 2003 will stand at 60%. However, as Chairman Lee Kasper suggests in the press release, NuTech's newly established growth trend should continue for the remainder of 2004 and into 2005, potentially placing us on the front end of a much steeper growth curve.
 

NTDL: Over Sold Bounce Imminent

I can't help but believe the risk/reward ratio on shares of NTDL at this time is outstanding. Those of you who have been following the situation since I first introduced it will fondly remember the surge over the initial few days. The stock more than doubled to the $1.50 level. The memory of the subsequent sell off after the effective registration statement from the January funding is far more painful.

I believe the demand/supply ratio has finally adjusted in favor of the long side. The stock clearly has no energy to trade much below the $.40 level, suggesting all the private placement shareholders who wanted to sell have done so. The supply side has completely dried up at these levels.

Furthermore, June's revenues would suggest this company has now achieved an approximate annual run rate of $6.4 million. With about 21 million shares I&O, the whole market value (market capitalization) of the company stands at $8.4 million. This company is worth at least two to three times revenues, which would suggest an upside of about $.90.

The $.40 floor on the stock is no coincidence. It is the price investors paid in the private placement. $.90 is a sensible upside target, as there are about 13 million warrants with a conversion price of $.75. Therefore, I believe it is reasonable to expect some technical resistance once the stock eclipses the $.75 level.

In light of today's news, coupled with diminished supply of stock and the oversold condition, I believe a bounce could be in the cards for NTDL. $.50 to $.60 is probably a good short term target, with higher levels in the cross hairs this summer if the company delivers new projects in either the concert DVD side of their business, or they do something high profile with their DRM (Digital Rights Management) Technology for viewing movies over the internet.

Here is the complete text of today's news release for your review:
 

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