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Gold/Mining/Energy : Global Thermoelectric - SOFC Fuel cells (GLE:TSE) -- Ignore unavailable to you. Want to Upgrade?

To: speculatingvalue who wrote (77)	6/8/1998 12:22:00 AM
From: speculatingvalue	Read Replies (1) \| Respond to of 6016

To clarify my last post, here's an excerpt from their prospectus. I'm not sure where I got the $18 million figure from. ____ The Corporation has been awarded a contract by the United States Army Tank-Automotive and Armaments Command ("TACOM") to develop and manufacture a new personnel heater for tanks and other military vehicles in accordance with TACOM's Phase II Heater Modernization Program. Canadian Commercial Corporation ("CCC"), a Canadian government crown corporation, serves as an intermediary between Global and TACOM as is usual in contracts between Canadian corporations and United States government entities. CCC has signed the heater contract with TACOM, and Global has signed a contract with CCC as the contractor to perform the work and supply the heaters required by the heater contract. The Corporation was one of only three companies selected by TACOM to compete for this contract. One of the other bidders was a large multinational organization. The heater produced by the Corporation is designed to use diesel fuel and to produce 60,000 BTU of heat per hour on high mode, and 30,000 BTU per hour on low setting. The high setting output is equivalent to about two-thirds of the heat put out by the average home furnace. The heater is designed to fit the mounting pattern of heaters currently used by TACOM so that it can be used in vehicle upgrades as a direct replacement for heaters provided by previous TACOM suppliers. The heater incorporates advanced electronics, including a dedicated microprocessor to allow monitoring of all critical parameters to ensure operator safety. The first phase of the heater contract is a fixed price arrangement under which the Corporation will build and deliver to TACOM a total of 2,000 heaters. Initial production of the heaters is now underway. Upon the completion by TACOM of a rigorous testing program at the Aberdeen Proving Ground in Maryland, full scale production of the heaters will commence. Initial production of heaters has commenced with delivery of the first 300 units expected to occur in the first quarter of fiscal 1999. The first phase of the contract, including the production and delivery of the first 2,000 heaters will result in revenue to Global of about $10.9 million. Approximately $3.6 million of this revenue has been booked as of October 31, 1997. After the first phase is complete, TACOM has an option under the contract to purchase an additional 2,000 heaters. TACOM may terminate performance of work under the contract in whole or, from time to time, in part if it determines that a termination is in the interest of the government of the United States. Upon doing so Global would be paid for all heaters supplied to the date of termination and would be entitled to a termination settlement that would be mutually agreed to by CCC, Global and TACOM. Marketing Strategy Global is conducting an aggressive marketing program for heater products. The Corporation has a full time sales force dedicated to contacting potential military customers around the world to inform them of the features and specifications of the heater being built for TACOM. Global believes that the market for its heaters outside the U.S. military is substantial, as many of the vehicles that have been sold into foreign markets were manufactured in the U.S. and use standard U.S. specifications and configurations. Marketing initiatives of the Corporation for its heaters include participation in major trade shows and personal contacts with key decision makers in other countries. The Corporation is also studying other markets where the heater technology developed for TACOM could be economically applied. Applications in commercial trucks, aircraft, and industrial markets are all being carefully examined. Competition In the past, TACOM purchased its vehicle heaters from a division of the Stewart Warner corporation, (purchased in 1995 by British Tire and Rubber) and from Hupp Industries (purchased in 1994 by the Dressen Company). In Europe, two large German organizations, Eberspacher and Webasto provide both air and engine coolant heaters. Although these companies are much larger than Global, they currently do not have a heater that has an output or technical specifications comparable to the heater being produced by the Corporation for TACOM. Until TACOM qualifies another supplier, Global will remain TACOM's sole supplier for the heater product. TACOM will have the right to ask for bids from other suppliers after the completion of the current contract. However, the Corporation owns tooling and designs for the heater product which should provide an advantage during future bidding.