3/30 Investor Call Transcript (Part 2 of 4)
Prior to accepting any government funds, the company submitted disclosures for more than 50 inventions to our patent attorneys. They’re all in various stages of patent preparation. A few of them filed and pending. An independent knowledgeable third-party has determined that the majority of these submissions are both novel and necessary for the development and use of our technology.
Military planners and the major defense contractors have estimated that the 5 to 7 year market for LIPC technology is over 12 Billion dollars. The total market for all directed energy weapon programs over the next 5 or so years is expected to exceed 100 B.
Ionatron will protect and use its intellectual property and trade secrets together with the company technical and business expertise to fully develop and commercialize this new technology at a rate similar to that of a commercial business venture. Not the typical military industrial weapon development cycle of 10 to 20 years.
Our accomplishments in the past 2 years are substantial. For example, we invented and successfully demonstrated a completely novel directed energy weapon technology. We are considered the leaders within the government scientific community, including those who play instrumental roles in past Star War programs.
With the help of government contract specialists we were able to establish government DCAA rate approval in only a few months. The normal process takes a year or more. These rates are prerequisite to accepting government contracts.
We have committed to the new DOD spiral development approach using their ACTD, which is Advanced Concept Technology Demonstrator methodology, and we have been able to take advantage of the streamline procurement guidelines to further fast-track LIPC to the field.
We built our current Ionatron facility to meet all necessary US government clearance requirements and national security guidelines. To date we have received all appropriate certifications.
The 2004 US Defense Budget included funding for Ionatron at the modest level of 3.4 M. The fact that we received any funding at all impressed many familiar with the process, since at the time all new line items were being left unfunded and all non-essential money were being shifted to support the war in Iraq. We were told that Ionatron received its appropriation because our new technology was so novel and has so much potential. We expect congressional support for Ionatron in the 2005 DOD budget to be substantially greater than in 2004.
We also have under development an electro-optical sensor utilizing the LIPC technology. Since our new lasers have bio-chem detection capabilities, that technology also allow them to have the ability to identify electro-optical enemy sources such as cameras and laser rangefinders. Our laser source will provide a counter measure to render electro-optic systems inoperative. This technology will ultimately be incorporated into our LIPC systems to provide true autonomous sensor shooter capabilities for our future weaponry.
Our management team include individuals experienced in envisioning new technologies and bringing them to market in an efficient, rapid, and profitable way. Our chairman has had over 50 years of experience in developing new technologies and producing cutting edge products in several high-tech industries. I, personally, has had over 20 years of experience in the high power laser development area. I was one of the founder of Opto Power Corporation, now Spectra Physics Laser; and just prior to Ionatron, I founded LaserTel, a high power gallium arsenide semiconductor manufacturer. I’ve also acted as consultant to the defense industry in the directed energy weapon area. Collectively, the management team has experience in commercial and military product development, manufacturing, optic and laser physics, plasma physics, atmospheric chemistry, advanced computer modeling, and military operations.
In closing, we believe that our LIPC technology changes the military rules of engagement in dealing with the new terrorist threat as well as the overall management of the battlefield. We believe that many versions and offshoots of our proprietary technology will be incorporated into numerous novel defense related products and other commercial applications. We have all the ingredients to succeed and look forward to our stockholders sharing in that success. Thank you. Bob and I are ready to take any questions you may have.
(13:10)
Joe Pratt (AG Edward): Tom, there was a March 26th New York Times article titled “Missile Defense for Airlines is Possible Soon, Makers Say”, and it states that three contract groups have been selected by the Department of Homeland Security in January to develop antimissile devices to protect the airlines from portable, short fired missiles of the type used in the November 2002 incident which almost hit an Israeli passenger jet on takeoff at Mombasa, Kenya. The article states that Homeland Security is setting aside $100 millions to determine if any antimissile devices could be installed on passenger planes with prototype built this year or in 2005. Are you going to play any role in that situation?
Dearmin: Joe, good to hear from you. The one thing I’d like to state there is that we are currently involved in that technology and I think that is about as far as I can go.
Pratt: Second question. Can you explain to us a little bit about how Ionatron technology is either similar or dissimilar relative to Taser?
Dearmin: That is a fairly easy one to answer, Joe. The technology is fundamentally very different. The taser simply shoots out a couple of wires and conduct electricity down those wires. Whereas, we are using a low average, high peak power laser beam to actually create a conductive channel in the atmosphere to our target. Fundamentally very, very different. You know, we rheostatically control the amount of energy we can put down that tube to the target and that just a big, big different.
Pratt: Could your technology be adapted for civilian applications?
Dearmin: It was always our intent to look at commercial applications. We envision that there will be facility-type protection applications, but also commercial applications…if you simply just think about being about to transfer electrical energy from point A to point B, there’s a lot of applications in the commercial world that we envision possibly could use that.
Paul Greenwall (? Capital): Could you tell me, when you say you talk about basically the method of getting to the target is different, but the net result in term of what the target receive, if it was to be used in civilian or police use, would it be a similar voltage amperage type shock where there is a long history of what the effect is short and longer term on the human body? Secondly, you mentioned that you had been named for reasons of national security as a sole source procurement contract. Could you explain what that means a little?
Dearmin: Let me go back to your first question. As I’d mentioned in the call, we rheostatically control the amount of voltage that we put down our channel. But that’s about all the details we can go into. And as to the second part, I think it’s fairly self-explanatory we were under a sole-source procurement for national security guidelines we had a contract awarded.
Oscar Penn (UBM Financial Services): I want to know if you guys have any plans of getting listed on the NASDAQ exchange. Thank you.
Bob Howard: We are going to try to do that as soon as we can. We have to accomplish the name change and the symbol change first.
Kevin (Maxim Group?): Hi, how are you today? I’m trying to get a grasp of, I started to look at your company and I’ve followed your work, Mr. Howard, when you got involved in Presstek and my client and myself have done real well with that. I know you have, I’m looking at, you have a product, a gun, that stops vehicles. Does it have to be approved number #1, what’s the process and when are you looking to get contracts? When are you looking to put revenues up? And I think, do you have to have a certain amount of revenues to be listed on the NASDAQ?
Howard: We can’t comment on the effects of our technology at all. So that there’s no comment on the first part of your question. As far as revenues are concerned, we have revenues now and hopefully that will continue to grow. |
