GloTech Industries, Inc. (GTHI)
Interview with:
Heinz Fraunhoffer, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
electroluminescent (EL) technology application for products, primarily designed for the vehicle safety and safety apparel markets, including GlowBike™, GlowVest™, GlowLogos™ and the Wedge™.

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GloTech Industries, Inc.’s goal is to replace reflective materials on safety vests with their electroluminescent (EL) lamps.  Recent testing with the Louisville Police Department provided positive feedback and the first order for GlowVests

Technology
Electro-luminescence
(GTHI-OTC)

GloTech Industries, Inc.

2153 SE Hawthorne Road, Ste. 112
Gainesville, FL. 32641
Phone: 352-334-7245


Heinz Fraunhoffer
President and
Chief Executive Officer

Interview conducted by:
Lynn Fosse
Senior Editor

CEOCFOinterviews.com
September 2003

Company Profile:
GloTech Industries, Inc. (GTHI-OTC) is a technology-based company whose goal is to provide the best visibility possible in today’s market. Based on a patent pending electroluminescent (EL) technology application that was developed by the University of Florida and their own research team, GloTech has created various illumination systems under the Signature Illumination™ brand.  The company develops, manufactures and markets proprietary products, primarily designed for the vehicle safety and safety apparel markets, including GlowBike™, GlowVest™, GlowLogos™ and the Wedge™.

The GlowBike allows your bicycle to be visible for up to 1600 feet, letting all surrounding drivers and pedestrians to be aware of your presence. GlowVest products are designed for joggers, walkers, law enforcement personnel, construction crews, airport ground operators, the military and others who need to be highly visible at night. Electroluminescent strips are attached to the front and back of a lightweight mesh vest and activated by the Company's standard power pack.

Additional innovations are under development, and the Company's goal is to become the leading developer and marketer of EL safety products.

CEOCFOinterviews: Mr. Fraunhoffer, please give us a brief history of GloTech Industries, Inc. and the products you provide.

Mr. Fraunhoffer: “GloTech Industries started out with an idea by a professor who used electroluminescent (EL) lamps on bicycles in the form of strips that attach to the tubes. Electroluminescence has been around for 20 plus years and was first used in backlighting for watches. GloTech Industries took the idea, formed a business plan and finally got funding from   private investors. After that, we developed a number of other products in the business-to-business and the consumer segments. One of these products is the GlowVest Pro™, a safety vest for law enforcement and construction workers. We have added electroluminescence strips, so these vests become visible at night from any angle, no outside light source is needed. The lamps are battery driven and emit a bright neon-like light.”

CEOCFOinterviews: What is electroluminescence, and why is it superior to other forms of  lighting?

Mr. Fraunhoffer: “Electroluminescence (EL) is a phenomenon that occurs when you apply an electric current to phosphor. The molecules of the phosphor become excited and emit a bright light. The phosphor itself is in a powder form and you can sandwich it between thin sheets of polyester, thus creating an electroluminescent strip or an EL lamp. The lamps are as thin as a sheet of paper. The phosphor is sealed and is UV resistant. It does not break unless you really want to break it. It has many advantages over a   traditional lamp, a neon  light or an LED light. The lamps themselves have a life of 5 years and beyond. The only thing that wears out is the battery.”

CEOCFOinterviews: Do you have patents on the process or products?

Mr. Fraunhoffer: “We have application patents on the bicycle and other motor vehicles, rollers or motorcycles. We have also applied for a patent for the vest and other products we develop.

CEOCFOinterviews: Who are the consumers for the GlowBike™ and how is it sold?

Mr. Fraunhoffer: “The GlowBike™ has been around for awhile and has been featured on CNN and Business Week, and in many other international and national science magazines. What we typically do is go to bicycle accessory dealers, either retail or wholesale, that sell twenty thousand to fifty thousand items at once. It does take awhile to get into the wholesale cycle. We have qualified distributors that already have products in the big retail chains like  Toys R Us, Wal-Mart, Target and the different sporting goods outlets. We sign agreements with distributors to carry our product in their product line. This will give us immediate access to those markets through people that already have established channels.”

CEOCFOinterviews: What is the Wedge™?

Mr. Fraunhoffer: “The Wedge™ is an application very similar to the GlowBike™. What we are trying to do is take two electroluminescent strips with a very small power source the size of your thumb, which houses the battery and the electronics. You can  put the Wedge anywhere you need instant lighting. One of the most likely places would be a bicycle helmet or hard hats. We have even seen people wearing it on their shoulder going to a disco and weaving it into their hair. It creates a lot of light in the dark.”

CEOCFOinterviews: Please tell us about your major vest order.

Mr. Fraunhoffer: “We had a significant event recently with the first order for GlowVests™ from a professional institution. It was significant for us because we transition from the trial stage into the sales cycle with this vest. The vests are our leading product in the safety arena, whereas the GlowBike™ is our primary product in the typical consumer market.”

CEOCFOinterviews: How did you get the first order and what is driving this?

Mr. Fraunhoffer: “What is driving the vest and driving our products is the brightness and visibility of the product itself. This immediately caught the eye of law enforcement and particularly traffic police, because one of their biggest problems is being visible. They often get hit by motorists when they direct traffic. Therefore we had lots of interest from law enforcement agencies to use our vests in trials. We had great testimonials from the Louisville, Kentucky Police; they noticed that motorists behave very differently towards them when they wear that product. That was the reason why it had been so successful in a short time. We believe that this product can replace the reflective materials on vests."

CEOCFOinterviews: What is the cost difference between your product and the traditional reflective vest?

Mr. Fraunhoffer: “The GlowVest is about $ 20 more expensive than what they are using now. It depends how high you value the life and I think it is much more than twenty more dollars. I think it is a positive trade-off.”

CEOCFOinterviews: Do you work with police associations and workers, in addition to the employers?

Mr. Fraunhoffer: “We started out working with individual police and sheriff groups because we had quick access to them, but we are actually working with the sheriff associations, OSHA, as well as the standards committees for the vests. We are trying to go in at a higher level where we can make an impact throughout the whole  law enforcement arena.”

CEOCFOinterviews: Could this product become a standard for common activities done after dark?

Mr. Fraunhoffer: “Our product has the potential for setting the standard for after dark activities. We have had a great response from joggers, cyclists and even people who walk their pet at night. They want to be seen and do not want to be hit by a car when they walk their pet This technology can very easily be adapted to a pet collar as well, so when your pets are out at night, they will be highly visible and less likely run over by a car.”

CEOCFOinterviews: How have you been funding this effort?

Mr. Fraunhoffer: “We had several money raising events in the form of private placements As our product has literally hundreds of applications and we are trying to focus on those that can come quickly to the market as well as those that are viable in this market environment. If you want to compare us to the biotech sector industry, it takes six to ten years for them to bring out a product and we have developed a new application every 3 months. This is not a long-term process.”

CEOCFOinterviews: What about the manufacturing of the products?

Mr. Fraunhoffer: “We do something which we call ‘Rapid Product Development’, that is the same idea as rapid prototyping. We are working with local companies to get small sample quantities out as quickly as possible. These products are evaluated by our customers; we get instant feedback and implement that right back into the product development and design process, and change the product within days. Once a product has matured, we have a representative in Shanghai, who sources our materials and components. All of our products are pre-assembled in the Far East. Customization of our vests will be done locally because we want to retain the flexibility to customized vests according to customer’s specification. They might spell out the county’s name, sheriff department or what ever the case may be. To make rapid development feasible, we work right here in Gainesville, Florida, and the surrounding cities, but for larger orders we have overseas facilities in place."

CEOCFOinterviews: What do you do about competition?

Mr. Fraunhoffer: “Our competition for the vest is 3M Company and DuPont. Our goal is to replace reflective materials on vests with electroluminescent (EL) lamps. We believe this technology provides an added value and new level of visibility to the product because it does not need an outside light source and it does not need to be viewed from a certain angle.  We like to license our technology to vest manufacturers that put the vests together and do not see ourselves creating or manufacturing the vests. Our strategy is to enter into license agreements with those manufacturers to have them do what they do best, which is making vests and selling vests with GloTech technology.”

CEOCFOinterviews: What are your challenges going forward, and what is your strategy to deal with them?

Mr. Fraunhoffer: “Our biggest challenge is to get to the market quickly, and that implies that we have to have our financials and products in ready. There is always a trade-off between speed to the market and your financial capabilities, as well as being a very efficient organization. Another challenge for us is that there is usually a half-year sales cycle for retailers and wholesalers and we just have to hit the right times.”

CEOCFOinterviews: Why should potential investors be interested and what should they know that perhaps they don’t realize when they first look at the company?

Mr. Fraunhoffer: “Potential investors can know everything about our company from our financial statements filed with the SEC as well as from press releases we send out regularly which indicate significant events for GloTech Industries. I think the opportunity with this technology and company is that we have a shining product, which stands out and provides a genuine value to a group of people that work in a low-light environment or are consumers who are about after dark or before dawn. We have the management structure in place, the financial capability and a strategy that allows us to grow at a fast pace. We do not want to go into manufacturing ourselves, but rather to enter into license agreements and market our products via TV ads in order to have a quick market penetration. We envision that within three to five years, we will be a triple-digit million-dollar company and we are on the look out to acquire companies or technologies that fit into our product portfolio.”

CEOCFOinterviews: Your products and concepts seem very easy to comprehend!

Mr. Fraunhoffer: “Having a product that is basic and easy to understand has been the attraction for investors so far. We have had investment bankers, venture capitalists, and investors that looked at it and said “This is a no-brainer” and we hear this term used all the time. Not only is the product easy to understand, but also the value and use of the product is evident. There is hardly any city or person in the U.S. that has not had a tragic but avoidable accident within the last involving visibility at night. Visibility is something that concerns everyone. There is nothing out there that comes close to our technology in terms of visibility. We apply our technology to products that make sense.”

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