JAWS TECHNOLOGIES INC.
(JAWZ-OTC BB)
www.jawstech.com/ir
1013 17th Avenue S.W.
Calgary, Alberta T2S 0A1
Phone: 1-888-301-5297 or (403) 508-5055
Fax: (403) 508-5058
Investor Relations: Barrie Einarson
Shares Issued: 12.5 million
52-Week Price Range: US$4.25-US$0.125
Current Price: US$2 31/32
With billions of dollars at stake, protecting crucial corporate data is quickly becoming a fundamental element of business operations. The expansion of e-commerce and internet applications is creating a strong need for corporate security and data encryption products. Calgary-based JAWS Technologies has developed an impressive suite of data encryption products designed specifically to protect sensitive information from unauthorized users. JAWS products allow users to secure all types of electronic files or even entire directories.
KEY PRODUCTS
JAWS Desktop Encryption
- enables users to easily encrypt desired files and directories of their computer's hard drive
JAWS Palm Pilot Encryption
- allows users to encrypt their Palm Pilot memo files
- now being sold through more than 60 on-line cyberstores for US$19.95
- expecting sales of more than US$2 million during the next 18 months
JAWS X-Mail Encryption
- designed to enable corporations and individuals to protect sensitive information contained in email messages
- to be launched on June 9 at the CATA convention in Calgary
- information contained in email, which has emerged as a mainstream communications channel for both corporations and individuals, is especially prone to unauthorized access
- works with popular email programs including Microsoft Outlook/Express, Netscape Messenger, Eudora, and Pegasus Mail.
Each of JAWS' data encryption products is driven by the company's proprietary 4,096-bit encryption algorithm which is believed to be the most powerful technology of its kind ever developed. Currently, the most common private and public encryption key lengths range from only 40 to 128 bits. 56-bit encryption provides 72 trillion possible combinations. The scientific community has not defined or named the number of combinations made possible by 4,096-bit key encryption. That number would be more than 1,200 digits long. An encryption algorithm is used to transform plain text into a code equivalent for archiving or transmission purposes. The encrypted text is subsequently decoded or decrypted into meaningful data by an authorized recipient. The algorithm uses a binary number or "key," that locks the data by combining the bits in the key mathematically with the data. At the receiving end, the key is used to unlock the code restoring it to its original format.
As an expression of its confidence in its algorithms and to bolster industry awareness and acceptance of its technology, JAWS challenged computer hackers worldwide to try to decode a message encrypted using the 4,096-bit encryption. A $5 million award was available to the first person to crack the encryption, however, despite the efforts of more than 600 hackers from 35 countries, nobody was successful in penetrating the code during the three-month challenge last year. The success of the test quickly attracted the interest of the U.S. and Canadian military as well as major corporations worldwide.
In addition to selling its encryption products, JAWS also performs information technology security audits for corporations and government agencies wishing to determine systems weakness and vulnerability. Customers include large oil & gas concerns, banks, international insurance companies, technology firms including ISPs, and e-commerce ventures. Specifically, the division supports corporations in defining, implementing, and testing network security, security products, policies and procedures.
JAWS recently joined an international industry consortium founded by the likes of Cisco, Compaq, Microsoft, Ernst & Young, and IBM, which serves as an advocacy group dedicated to fostering a greater understanding of and developing guidelines for the application services provider segment of the computer industry.
COMMENTARY
While 128-bit encryption is satisfactory for most applications at present, the likelihood that much stronger encryption will be required by both corporations and individuals in the future is very high. Non-believers are reminded that not too long ago the business community was told that a 386 processor was the most powerful desktop computer they would ever need. Such technology was outdated several years ago. In recognition of the pace of technological change, JAWS is presently developing its next generation of information security products which will employ 16,384-bit encryption. Many industry analysts are forecasting massive growth in the data encryption industry given that information security is now the top information technology priority of large corporations behind Y2K compliance. Given JAWS' superior proprietary technology, the company appears well positioned to attract a significant share of this potentially explosive market. Management conservatively projects that year 2000 sales could top $15 million.
It should be noted that JAWS plans to apply for a NASDAQ listing later this year after becoming a full reporting issuer with the SEC.
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