Principal Products and Services.

Cadmium telluride and cadmium zinc telluride are semiconductor materials used in electronic equipment such as infrared detectors, weapons guidance systems, satellite surveillance, solar cells, deep space communications, infrared night vision devices, tumor detectors, nuclear radiation and gamma detectors, spectrometers for chemical identification, nuclear medicine, astronomy and related applications. (Whitaker, T., Picture This, Compound Semiconductor, Vol. 4 Number 4, 17-20, May 1998).

A Discover Magazine article cited a July 1997 award to Sandia National Laboratories for development of a compact cadmium zinc telluride sensor. The following is quoted from the award citation: "Since these sensors are compact and work at room temperature, they could be used not only for monitoring plutonium but also for detecting environmental radioactivity, exploring for minerals, and helping doctors find tumors."

Cadmium telluride can be used in high capacity solar cells. (Galloway, S.A, Characterization of Thin Film Cds/cdte Solar Cells Using Electron and Optical Beam Induced Current, Solar Energy Materials and Solar Cells, Vol. 57 pp. 61-74, 1999.) Cadmium telluride can also be used in high temperature infrared and near infrared sensors. (Mullins, J.T., Carles, J. and Brinkman, A.W., High temperature optical properties of cadmium telluride, Journal of Applied Physics, Vol. 81, No. 9, pp. 6374-6379, 1997.)

Cadmium telluride, cadmium zinc telluride and cadmium mercury telluride are difficult to grow in high quality crystalline structures, but are popular in spite of these limitations because of their superior properties in infrared sensing applications. (Whitaker, T., Picture This, Compound Semiconductor, Vol. 4 Number 4, 17-20, May 1998), (Rogalski, A. Optical Engineering. Vol. 36, Pg. 1994.)

Most of our target markets are in the United States, but potential opportunities are global. The major areas of concentration outside of the United States are Japan, Taiwan, China, Korea, the United Kingdom, Germany, France and Italy. (Private Communication with Sanghamitra Sen, Santa Barbara Research Center, Raytheon, Goleta CA, August, 1998).

Presently, the only suppliers of specialty semiconductor materials such as cadmium telluride are supplying at extremely high prices and in very small and inconsistent quantities. (Private Communication with Sanghamitra Sen, Santa Barbara Research Center, Raytheon, Goleta CA, August, 1998). Users of this material have expressed a desire for additional suppliers to supplement or improve their current sources of material. (Private Communication with Sanghamitra Sen, Santa Barbara Research Center, Raytheon, Goleta CA, August, 1998). Our goal will be to provide cadmium telluride materials in wafer form at lower cost and in larger amounts than other suppliers. If we are successful in doing this, we expect the interest in cadmium telluride material to increase not only in military and aerospace applications but also in a number of non-military applications, the most notable of which is the medical imaging device area.

While the military and aerospace markets continue to be attractive markets for us because of the high prices being paid for the cadmium telluride material for focal plane arrays, these markets appear to be less robust and growing at a lower rate than the non-military and non-aerospace markets. While the civilian aerospace demand is growing, the military requirements have been dropping on a year-to-year basis due to cutbacks in government military spending. As a result, we believe that our product will allow us to compete effectively in these important markets where cost and quality are increasingly important.

The medical imaging market is undergoing a dramatic change and moving beyond X-film technologies. This change involves the use of floroscopic techniques that reduce the x-ray dosage to the patient while providing high definition images. The high degree of clarity in this technology allows the equipment to be used in cardiac procedures on a beating heart as well as standard vascular procedures. Currently, cesium iodide receptors are used in this application. The problem with cesium iodide is that receptors made from this material can only be used in a curved receptor that distorts the image and requires special correction of the image to allow the physician to perform the procedure. Even with correction, the image remains distorted to some degree.

Cadmium telluride has several advantages over cesium iodide. A flat panel receptor is possible with cadmium telluride detectors. These detectors produce a receptor with reduced size, thickness and weight. A true flat image receptor gives a more constant amount of illumination and is a much better detector for medical procedures. The potential market for devices using this type of receptor is about $750 million dollars per year, with the semiconductor material used in the receptor device being a large part of this value. (Private communication, Market Analysis report-Medical Imaging Market, Ross Riches, Consultant, Angola, IN, May 2000).

Distribution Methods of the Products or Services

In the military and aerospace markets, companies such as Rockwell; Raytheon (Santa Barbara Research); Texas Instruments; Hewlett-Packard; ITT; McDonnell Douglas; General Electric and NASA have done work in cadmium telluride device development or production. Each of these companies would be a potential customer for Galtech. In the medical imaging area, companies such as GE Medical Systems; Philips Medical Systems; Siemens Medical Systems; Fischer Imaging; Fluoroscan Imaging Systems; Lunar Corp.; Ziehm International Medical Systems and Xiscan Medical are all potential customers and users of this semiconductor material. (Private communication, Market Analysis report-Medical Imaging Market, Ross Riches, Consultant, Angola, IN, May 2000).

Bill Tunnell, Investor Relations: 623-825-2550
Questions or Comments:
management@galtech-corp.com
P.O. Box 1953  Orem, Utah 84057
Tel: 623-825-2550

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