Current Technology Corp. (CRTCF)
Interview with:
Robert Kramer, CFO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
patented electrotherapeutic device which reduces excessive hair loss and can stimulate hair regrowth.

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Current Technology Corp. – finding their technology for reducing hair loss applicable to women taking chemotherapy for breast cancer as well as men

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Healthcare
Spa Industries
(CRTCF:OTC)

Current Technology Corp.

 800 West Pender Street - Suite 530
Vancouver British Columbia, Canada V6CZVG
Phone: 800-661-4247

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Robert Kramer
Chief Financial Officer

Diane Reynolds
Co Publisher

CEOCFOinterviews.com
September 2003

Bio:
Robert Kramer is the co-founder of Current Technology Corporation along with his wife Anne Kramer.  The company was formed in 1987 to research, develop and commercialize eletrotherapeutic products for the treatment of hair loss.  Mr. Kramer has more than 25 years experience in mortgage, corporate and securities financing.  Prior to co-founding Current Technology, he was a joint venture partner in an enterprise that raised funding for approximately 20 public mining companies conducting exploration activities in Western Canada.  He has served as Chief Financial Officer and Director of Current Technology since its inception.  A graduate of the University of California at Berkeley (B.A. Economics), he is a member of the Canadian Institute of Chartered Accountants and earned his designation as a Certified Public Accountant in 2000.

Company Profile:
Current Technology Corporation  has developed a patented electrotherapeutic device which reduces excessive hair loss and can stimulate hair regrowth in those who suffer from androgenetic alopecia (common baldness).  ElectroTrichoGenesis, or ETG Treatment, the regrowth of hair by means of electrical stimulation, promotes the “healing” of hair follicles that are dormant, but not dead.  Research has recently been conducted to expand the indications for ETG.  For example, a single center pilot trial to assess the efficacy of ETG in the reduction of hair loss in patients with breast cancer undergoing CMF chemotherapy has been completed with encouraging results.  Psycho-Oncology, a peer reviewed medical journal, published the results in the May/June 2002 edition (p.244-248)

Over the years, researchers and clinicians have discovered that certain electrical frequencies and current values stimulate healing responses in various parts of the body.  For example, a research paper published in The Journal of Bone and Joint Surgery in May 1990 by J. W. Sharrard, M.D., University of Sheffield, concluded that electrical stimulation significantly influenced healing in non-union fractures.  In addition, a report published in the British Journal of Dermatology in 1992 presented evidence on the healing of recalcitrant venous ulcers by means of electrical stimulation.  Electrical stimulation is now an accepted medical treatment in a number of specific areas.
The company has focused on developing a treatment for common baldness using electrical stimulation.  It has identified the electrical parameters that reduce excessive hair loss and stimulate hair regrowth, and it has developed the treatment program.  As hair loss progresses, the hair follicle produces hairs in the normal growing-resting-shedding cycle that are progressively thinner and shorter.   Ultimately only “peach fuzz” type hair is produced and then the hair follicle goes into a dormant state prior to its demise.  ETG Treatment alters this dormant state by stimulating the production capability of the follicle and thereby reducing excessive hair loss and encouraging regrowth.

CEOCFOinterviews: Mr. Kramer, please describe your company and what it is doing today. 

Mr. Kramer: “Current Technology Corporation was founded in 1987 by my wife Anne Kramer and I.  The name of the company was chosen quite specifically to reflect our primary interest in electrotherapeutic products as well as to reflect  the current or up to date nature of our technology. We have for a number of years devoted ourselves to developing a patent protected technology platform that is centered on a product called ElectroTrichoGenesis (ETG) that delivers a proven treatment for hair loss.”

CEOCFOinterviews: Exactly how does this work?

Mr. Kramer: “Over the years it has been known in medical literature that the use of electro stimulation on the human body has various positive affects. For example, there are several eletrotherapeutic products today out in the marketplace that are used to treat subcutaneous ulcers or bed sores and other products that you may be familiar with that are used in physiotherapy applications to treat, amongst other complaints, muscle-related issues.  We have focused on the issue of hair loss and have delineated the specific frequencies and current values in an electrotherapeutic product that has been proven to stop excess hair loss and stimulate re-growth.”

CEOCFOinterviews: How many treatments would one need to see some results?

Mr. Kramer: “Good question. The first thing that one must understand is that this is a treatment and not a cure so you have to keep taking treatments to maintain the benefits.  When you  start the process you would expect to see the early signs of less hair in the shower or less hair on the pillow in the two to three month range. Typically by the third or fourth month, you would start to notice some new growth.”

CEOCFOinterviews: Does it work for all patients?

Mr. Kramer: “Nothing works for everyone but our therapy has been subjected to multi centered clinical trials and the results have been published in peer reviewed medical journals.  By the way, this is very important for your readers to understand. It has a very high level of success from a statistical standpoint.   For example, in one of the clinical trials that have been published, over 96% of the participants in a double blind study who were taking the active treatment either had no further hair loss or an increased hair count at the end of the 36 week clinical trial.”

CEOCFOinterviews: Will insurance companies cover this process?

Mr. Kramer: “Typically the answer to that is no. ETG treatments fall into the general realm of elective procedures and insurance companies do not typically cover those types of treatments. Interestingly enough, one of the areas that we have recently done some work in that your readers may be interested in, is the use of ETG to treat women who are undergoing CMF chemotherapy treatment for breast cancer. This work was done in New Zealand at the St Marks Breast Centre.  We have found that if we were able to start treating the women before the CMF chemotherapy regime began, continued to treat them all the way through and stuck with it after they completed chemo, in most cases it stopped their hair loss. That is the kind of thing that may be covered by insurance in some countries.”

CEOCFOinterviews: Where is your ETG device used, in a hospital setting, offices or clinics?

Mr. Kramer: “It actually varies considerably. Our device in most instances is treated as a medical product. We have clearance in countries like New Zealand, Mexico, Australia and Canada as a medical product.  It is typically available in a clinic type setting, not necessarily in hospitals but sometimes in conjunction with doctors’ offices or stand alone facilities that are dedicated to this type of treatment process.”

CEOCFOinterviews: You have centers in ten countries around the world.  Where is the majority of growth coming from right now?

Mr. Kramer: “Historically we have focused on countries outside of the US and we are certainly anxious to continue that process, but we have very recently developed a product for the U.S. market and that product is called CosmeticTrichoGenesis (CTG) or the CTG Mark 5 unit. Now, I’m sure that you are aware, the United States is the largest market for cosmetic type products in the world.   Recent statistics reveal that about two and half billion dollars a year is spent on hair related solutions in the US. A recent study that was done for the International Spa Association conducted by Pricewaterhouse Coopers, has indicated sales in the spa field in the ten billion dollar range and growing.  So, we are very excited about entering the market in the United States with our cosmetic product. We are just at the front end of that. We have delivered units into Florida and Washington State and have participated in a couple of shows in the US and are most anxious to see things grow very quickly.”

CEOCFOinterviews: So, the CTG Mark 5 is not being marketed overseas?

Mr. Kramer: “Right, the CTG Mark 5 is marketed in the United States. Our plans call for seeking FDA approval for our ETG medical device and we plan to do that initially for an indication for treating hair loss that has been induced by chemotherapy treatments.  But as far as the here and now is concerned the CTG cosmetic product is available.”

CEOCFOinterviews: Has all of the turmoil in the world affected the company?

Mr. Kramer: “Well, you are certainly correct about that.  There is a lot of turmoil in the world today.   We are a small company, a micro-cap company, trading on the bulletin board and certainly the last several years, as your readers undoubtedly know, have been  tough ones in the marketplace especially in the last 40 months or so. Things have picked up very recently, but it has been tough to raise money.  In fairness, I would have to say the constraints we face have been related to both gathering the proper financial resources and on economic difficulties globally. For example, ETG was growing rapidly in Argentina some years ago when our product was introduced there with a very loyal group of clinic operators who were doing extremely well. However, they were very adversely affected by the difficult economic circumstances there such as bank closures, the levels of unemployment and major devaluations of the currency.  They are hanging in there but they have unfortunately seen a situation turn 180 degrees from one of a very rapid growth to just holding on with their fingernails.”

CEOCFOinterviews: The ETG device, when it is placed in the treatment centers, who services them? When the technology starts to evolve, who updates them and replaces them?

Mr. Kramer: “These are very good questions, the types we are asked by potential operators. I think we have developed an answer to that which is rather unique and one that your readers would be interested in. Recognizing that we would not have the ability to build a global infrastructure as we are a small company, we have devoted our talents on the front end to developing a communication system that allows us at our head office to communicate with the device all around the world via a modem.  Once it is hooked up, there are signals that are sent from the control processing unit which is the brain of the unit to our computers here in our head offices. We are then able to read all of the historical treatments that have been given to determine that they have been given in the appropriate manner. It will carry out a full systems check and if there is something wrong it identifies exactly what the problem is and allows us to direct a fix on a remote basis. It is quite an interesting system. It is security controlled and it is working extremely well for us. Also I think your readers will be interested to note that this allows us to in most instances  participate in downstream revenue.  Therefore we not only generate revenue from the sale of an ETG device at the front end but in most cases participate on a per treatment basis downstream. We are able to monitor that by monitoring the equipment through the process that I just described.”

CEOCFOinterviews: How much time do you focus on the security issue?

Mr. Kramer: “Security is a big issue there is no question about that. I think that it would be foolish in today’s world to say that something is absolutely one hundred percent fool proof.  However, it is not an open system receiving random internet messages that could be dangerous, but rather a closed system focused on communication between two known points, A and B. This allows us to be specific in terms of the way this security system was designed and basically if the two points can’t satisfy each other that the proper protocol has been reached or achieved then the system simply shuts down. To date we haven’t had any problems.”

CEOCFOinterviews: Where are you in the financial development of the company?

Mr. Kramer: “Well, we have not yet achieved break even.  The development cycle has been funded by the usual means of debt instruments and private placements to raise required financing. As I have communicated earlier, we are at the front end of our entry in the marketplace in the US. We are hopeful that as the pace picks up and as we move forward into the next fiscal year that we will achieve break even and the wonderful point of profitability so that those earlier development stage issues will be a thing of the past.”

CEOCFOinterviews: The company was founded in 1987 and you and your wife Anne have been there since the beginning. What has been the biggest challenge that the two of you have faced?

Mr. Kramer: “Being very candid about it, one has to recognize that when you have a product that is primarily focused in the area of treating hair loss there is very understandably a high level of skepticism and that is something that we expected. When we first heard about the technology and decided to get involved we were highly skeptical but we also recognized the other side of the coin is tremendous upside if you get it right. So we recognized very early on that we had to attract a very talented group of people around us. We also felt that we had to subject the technology once it was fully developed to our satisfaction to independent clinical testing and when that testing was completed we would attempt to have very credible people write up the results submit those results to medical literature and hopefully achieve peer reviewed publication. We have done that and we feel very strongly that these publications combined with the patents that are issued and pending around the world form the basis for the company as a whole.”

CEOCFOinterviews: Where is your ETG device manufactured?

Mr. Kramer: “It is manufactured here in British Columbia where our head office is located. We are working with a company that has major customers like General Dynamics (NYSE: GD) and General Motors. (NYSE: GM) We were actually just going through a process of having all of the drawings and manufacturing input information reviewed and brought up to date to today’s technologically advanced standards and are ready to push the button on a pre-production run that will apply new and more sophisticated manufacturing techniques. That is not my area in the company as chief financial officer but it is one that I am aware of because of its financial implications.”

CEOCFOinterviews: I think more and more people, especially here in the US, are more attracted to natural remedies vs. chemical or invasive ones.

Mr. Kramer: “You are absolutely right. This is totally non-invasive situation, there is no sensation and it does not involve the use of chemicals or anything like that and people today are very much directed towards things that are natural.  This is very important to us in terms of product acceptance.”

CEOCFOinterviews: What would you say to a potential investor looking at this company for the very first time?

Mr. Kramer: “That is a great question and one that we hopefully have a good answer for. We are at the front end of what we see as a successful launch of our cosmetic CTG Mark 5 product into the largest market for cosmetic products in the world. In the world today you have two things that are converging that I think are very exciting for Current Technology. The first is you have a population generally but most typically in the United States that is very sophisticated and aware of concepts of wellness and physical appearance and as people get older, they want to maintain their youthful look and feel as long as possible and we are a part of that. Secondly, looking at it from an operator standpoint, we live in a world today where individuals who are in business are searching for different areas of revenue that may be available to them for modest investments and we feel we really fit the bill. There are a number of different situations that we could describe where we could see someone who is now involved in the aesthetics field adding CTG Mark 5 to their particular situation, substantially increasing the amount of revenue generated and therefore, their own bottom line. So I see this driven by those two factors and therefore see this as being a very exciting point for someone looking seriously at Current Technology as an investment based on the fact that we are right on the front end of what we believe to be a significant growth of revenues.”

CEOCFOinterviews: In closing, what would you say is the most significant change in the marketplace?

Mr. Kramer: “When my wife and I co-founded the company, we saw this technology platform as one to be directed at males and I think that was probably a reasonable assumption on a first look basis. However, as we have gotten further into it we feel it is going to be significant for women and are very excited about its prospects. Definitely on the cosmetic side, this relates to how concerned women are of any issues relating to the appearance of their hair.”

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