HiEnergy to Launch CarBomb Finder Counterterrorism Product; Navy Contract Not Granted on Financial Grounds
IRVINE, Calif., June 12 -- HiEnergy Technologies, Inc. (BULLETIN BOARD: HIET) today announced that it has submitted a solicited bid for its CarBomb Finder(TM), a new series of remote, clandestine detectors of bombs in trunks, seats and engines of parked or moving vehicles, to a counter-terrorist agency of a major European country. The CarBomb Finder uses HiEnergy's patent pending stoichiometric explosives detection technology and is designed for use in police cars to decipher the chemical composition of the contents of other vehicles.
"The CarBomb Finder is of significant national importance because of the recent terrorist attacks in which Americans were killed in Casablanca and Riyadh by car bombs which contained large amounts of explosives," said Dr. Bogdan C. Maglich, Chairman, Chief Executive Officer and Chief Scientific Officer of HiEnergy Technologies. "We believe that these car bombs could be relatively easily detected through the metallic walls of both the police car and the target vehicle using HiEnergy's technology," he said.
The CarBomb Finder will be priced at $250,000, $450,000 and $750,000 for the Microsenzor, Minisenzor and SuperSenzor models respectively. "We are pleased that one European country has already expressed interest and we plan to market the product to governments throughout Europe, the Middle East and Africa, " Dr. Maglich said. The Company expects to have a completed prototype by the end of the summer.
The Company announced separately that it has not been granted the $200,000 contract with the Contract Office of the Naval Surface Warfare Center (NSWC) discussed in a press release on April 30, 2003 because it did not meet the condition of having a cash position of $1.8 million at the outset.
"We chose not to raise the remaining capital required to obtain this contract through a share offering at this time because of the already relatively low stock price," Dr. Maglich said. The Company also does not believe that such a cash position would be necessary to complete the first phase of the project, which was to conduct a scientific feasibility study of the SuperSenzor for use in detecting biological and chemical weapons in sealed containers. The Company is pursuing all options available to obtain a contract solely for the feasibility study, and Dr. Maglich has appealed the NSWC's decision to Secretary of Defense Donald Rumsfeld.
"Our cash position is maintained at sufficient levels for running our current operation," Dr. Maglich said. The Company has a staff of approximately 12 employees.
In other news, the Company reported that its MiniSenzor, a smaller version of its SuperSenzor explosives detection product, scored 100% in blind field tests conducted at the Indian Head, Md. Naval base. The primary goal of the tests was to determine if HiEnergy's MiniSenzor could differentiate explosives from inert substances in steel artillery shells or other containers, which it could in 100% of cases. The MiniSenzor scored 80% on its ability to determine the chemical composition of the explosives and inert substances. Two of the explosives were too similar in chemical composition to be distinguished exactly.
The Company also continues to perform testing and development on the SuperSenzor technology for an anti-tank landmine detection system under a $780,000 contract with the Department of Defense Small Business Innovation Research. Work on this two-year contract, originally scheduled for testing in November of 2003, began on January 15, 2003 and is currently ahead of schedule.
ABOUT HIENERGY TECHNOLOGIES, INC.
HiEnergy Technologies, Inc. has developed patent pending stoichiometric explosive detection technology that remotely determines the chemical formula of concealed substances, including explosives, biological weapons, and illegal drugs. 'Stoichiometric' means detection that deciphers the chemical formula of unknown substances through barriers in a short period of time. The systems HiEnergy is developing have applications in several markets, including airport security screening, bio-weapons detection, landmine detection, and contraband detection, in addition to chemical and petrochemical industry applications. HiEnergy's technology has been developed through several years of research and under grants from the Department of Defense and the US Customs agency. The shares of the company are publicly traded under the symbol HIET.
RISK FACTORS CarBomb Finder
A proposal may not result in any revenues, and we may not be able to recover any of the costs we may incur in connection with the proposal.
Our products to be accepted may need to be tested, which may be time consuming. Acceptable performance may require modification to our designs or components.
We depend on a single supplier for our neutron sources. If this supplier ceases to provide its components, our ability to deliver products will be seriously impaired. The supplier is involved in a re-design, requested by us, and this has led to delays recently in delivery to us of components we now have on order with it.
We are inexperienced in doing business in the European Union, and we may encounter local rules and regulations that impede our ability to contract or perform.
NSWC Contract
Large projects are often up for bidding and we may be hampered from participating in those projects by our own financial position being considered inadequate. Government contracts may be slow in coming.
Our government contracts are on terms that provide the government proprietary rights in technology that is developed in the project.
Ultimately, we would need more financing in order for our financial position to satisfy stringent requirements that would apply in obtaining a long-term full production contract.
Field Tests
Our interpretation of test results as successful is not necessarily the opinion of any governmental agency.
The expected financing to support our new initiative has not been completely identified or committed.
Our plans may rely on leveraging the skills of strategic partners. Presently no strategic partners are identified or committed.
Our management is important and the loss of Dr. Maglich's services would be materially adverse. He is presently our sole executive officer, and the expected product may require additional time, effort and skills in management which might exceed our present capacity. We do not have significant experience with product initiatives such as the one proposed, and we are undertaking this initiative in reliance upon current management. We may experience unexpected difficulties.
Our financial position may make it more difficult for us to attract and retain good personnel.
FORWARD-LOOKING STATEMENT
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Any statements set forth in the news release that are not entirely historical and factual in nature are forward-looking statements. For instance, all statements of belief and expectations are forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.
For further information, please contact: Investor, Melissa Payne-Smith of Roth Investor Relations, +1-732-792-2200, hienergy@hienergyinc.com; or Media, Carrie Gray of HWH Public Relations, +1-212-355-5049, both for HiEnergy Technologies, Inc.