Third-Order Nanotechnologies (OTC: TDON.PK)

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Symbol: OTC: TDON.PK

Address:
Third-Order Nanotechnologies, Inc.
2601 Annand Dr. Suite 16
Wilmington, DE 19808
(302) 998-8824

www.third-order.com

Top Investment Highlights

Third-Order Nanotechnologies, Inc. is the originator and sole producer of thirdgeneration electro-optic polymeric materials, with applications in telecommunications and the medical and defense industries.
Following fifteen years of development, the company's patent pending solutions appear to have solved the industry-wide molecular instability issues (thermal, photo-chemical, etc.) surrounding electro-optic polymers, which opens the door to mass-commercialization of plastic-based optical products.
In addition to its demonstrated molecular stability and high performance, the company's technology is highly scalable and less expensive to manufacture than competitive technologies.

Company Overview

Third-Order Nanotechnologies, Inc. is a developmental stage company focused on the research and development of electro-optic polymers, material systems and components. The company is the originator and sole producer of thirdgeneration electro-optic (EO) polymeric material, which is the core active component in many advanced, current, and projected broadband telecommunication networks, high-speed computer systems, and sophisticated military hardware. Management believes that its revolutionary proprietary EO polymer could define the 21st century in much the same way silicon defined the 20th century. Its architectures provide a faster, more costeffective alternative to the traditional materials used in fiber-optic ground, wireless, and satellite communication networks. Third-Order is on the verge of initial commercialization and will be focused initially on the 40Gb –100Gb modulator market and military/intelligence-based hardware. In addition, it recently announced its KerreneTM polymer material expected to form the basis of All-Optical Transistors (AOT), where light, instead of electricity, controls light. The company was recently a recipient of the prestigious Frost & Sullivan 2006 North American Electro-Optic Materials Technology Innovation of the Year Award.

History

Inspired by Dr. Frederick Goetz and his scientific discoveries from more than a quarter of a century ago, PSI-TEC Corporation, now known as Third-Order Nanotechnologies, Inc., was officially established in 1991 and incorporated in 1994.

As a developmental stage company, Third-Order Nanotechnologies began working with the Intelligence Community and Department of Defense in 1998, and was invited to move its operations to laboratory space provided by the U.S. Army on Aberdeen Proving Ground. The company then entered into multiple contracts and/or advisory relationships with the National Reconnaissance Office, the Defense Advanced Research Project Agency (DARPA), the Air Force Research Laboratory, the Naval Air Warfare Center, Army Missile Command, and the Army Research Laboratory.

Today, Third-Order is located in Wilmington, DE. It operates a fully functional organic synthesis and thinfilms laboratory that contains state-ofthe-art equipment to produce next-generation fiber-optic organic materials. The company recently changed its name from PSI-TEC to Third-Order Nanotechnologies. The name "Third-Order" represents its focus on the technological evolution into optical processing, or "beyond-next-generation" electro-optic materials and products.

Electro-Optic Plastics

The first EO plastics were developed at Bell Labs in the 1950s and 60s, and by the 80s many major corporations were heavily invested in the development of these materials. Based on their perceived advantages of being smaller, faster, cheaper, lower power consuming, and scalable to high volumes, these materials were envisioned for a variety of new products and markets (especially emerging Internet technologies). Electro-optic plastics were quickly coined the "holy grail" of telecommunications. Venture capital poured into dozens of EO polymer centric start-up companies during the Telecom and Internet "bubble days" of 1996 – 2001.

Despite this initial optimism, development came to a screeching halt as scientists discovered a paradox in the atomic chains of its molecular structure: The longer the atomic chain, the higher performance of the material; however, the longer the chain grew, the more unstable the material became. As a result, nearly every program in electro-optic plastics was cancelled, and those remaining, continued efforts to stabilize the materials that had already been created. Third- Order Nanotechnologies chose to continue moving forward under the premise that if the scientific community had successfully stabilized many other plastics, there was no reason that electro-optic plastics could not be stabilized as well. Founder Frederick J. Goetz took a novel approach to the challenge of stability: instead of taking an EO active polymer and trying to make it stable, he took a fundamentally stable polymer and made it EO active. The result is called Cyclic Surface Conduction (CSC) Theory and has enabled Third-Order Nanotechnologies to demonstrate several stable polymers materials, including one that was independently verified to perform 650% better than the best competitive materials. The company's unique revolutionary material platform exhibits tremendous stability and, coupled with extraordinarily high performance, represents a quantum leap in technology.

Market Opportunity

"The average consumer is likely to never see our materials firsthand, much less purchase them directly, but that doesn't mean he or she won't use them every day," explains the company's CEO, Ron Genova. "For instance, few people would go out and buy a nice, big, block of Teflon™, but there are so many products that use this material, from non-stick pots and pans to control valves on NASA's Mars rovers Spirit and Opportunity," he says. Potential applications for EO plastics include broadband (fiber-optic) communications, high speed computing (optical interconnect technologies), biomedical imaging/diagnostics, and security/defense.

Telecommunications

There are approximately 300 million kilometers of installed fiber-optic cable in just the United States, and this number more than doubles world-wide. Only a small fraction of installed fiber optic cable's theoretical bandwidth is being utilized, primarily because of optical component technological limitations. Faster (wider bandwidth) telecommunication devices and systems will allow worldwide telephone, Internet, and cable service providers significant room to grow, while providing a substantial cost advantage over traditional materials. Third-Order's next-generation EO polymers are expected to be directly integrated into this market, most likely through partnering with companies that are already working toward the integration of modulators in transceiver, transponder, and optical communication system level products. At present, bandwidth demand is increasing 50% to 100% per year, while bandwidth costs are only falling 25% to 40% per year. Despite the high demand for greater bandwidth, the migration from 10Gb to 40Gb has not yet been implemented on a large scale, due to excessive cost at 40Gb. Support exists for a new generation of IP backbone routers and switches needed to relieve high capacity network bottlenecks, but excessive costs make the migration unattractive. Because bandwidth cost savings are not keeping up with demand growth, an opportunity exists for a technological innovation. Third-Order's materials will offer the strength and price advantages telecom providers desperately need. Management anticipates that its fiberoptic polymers will become the industry standard worldwide.

Government

Third-Order Nanotechnologies has worked with various government agencies over the years to develop next-generation electro-optic systems. Organizations such as the National Reconnaissance Office (NRO), a member of the Intelligence Community that operates all "spy" satellite systems for the U.S. Government, require the fastest (widest bandwidth) telecommunication systems to acquire immediate images with the highest-resolution possible. In the interest of advancing these and other technologies, government organizations such as the Army Research Laboratory (ARL), the Air Force Research Laboratory (AFRL) and the Defense Advanced Research Project Agency (DARPA) were formed to support novel and promising technologies for application in military equipment. These organizations have provided material, financial and/or advisory support to Third-Order Nanotechnologies over the past six years in the pursuit of high-speed electrooptic materials. Despite a tumultuous past, industry experts anticipate that the fiber-optic communications industry alone will grow to $1.8 trillion by 2009. Management believes that their plastics will greatly improve the clarity and reliability of vital national defense technologies, including real-time satellite reconnaissance.

Medical Imaging

Third-Order Nanotechnologies applications may also extend to the medical field, where the Company's unique polymer designs can provide a pathway for safer alternatives to X-ray procedures for skin cancer and dental patients. According to the American Cancer Society, more than one million new cases of skin cancer will be diagnosed in the United States each year.

Corporate Strategy

Third-Order Nanotechnologies is on the verge of initial commercialization, which will include circuit board applications and chip-to-chip interconnects. Following this initial stage, the company will then focus on the 40Gb – 100Gb modulator market. According to a Triple Play Communications market survey, the 40Gb optical modulator market for telecom systems alone may grow to $440 million by 2011. Industry experts speculate that the 100Gb datacom modulator market may exceed $500 million in that same time period. In the future, the company will likely seek strategic alliances with leading transceiver, transponder, and optical switch companies. According to a Triple Play Communications' market survey, 40Gb (OC-768) telecom transponder sales are projected to grow from $16 million in 2006 to $80 million in 2009. Third-Order is proceeding with joint development negotiations with several high profile industry leaders. Additionally, the company continues to search for new strategic partners and licensing agreements with component and device manufacturers.

Management

Mr. Ron Genova: Interim CEO
A veteran within the electro-optics industry, Ron Genova provides strategic and managerial discipline to Third-Order as it embarks on its critical product and commercial introduction phases. Genova brings nearly thirty years of executive management and advanced optical technology experience from his tenure with Bell Labs, Lucent Technologies, AT&T, JDSU, and several technology start-up ventures.

Dr. Frederick J. Goetz: Chief Scientist
Dr. Goetz has dedicated his life to the advancement of electro-optics. An industry-wide recognized expert in polyheterocyclic organic chemistry, Dr. Goetz founded Third-Order in 1991 with the belief that his vision would revolutionize industries dependant upon electro-optics and advance the telecommunications industry.

Mr. Andrew Ashton: Vice President
Andrew Ashton manages chemical development at the organic synthesis lab. His scientific career began at the Army Research Laboratory on the Aberdeen Proving Grounds where he helped to design and implement computer interfaces for composite analyses. As one of the first members of the Third-Order team, Mr. Ashton was instrumental in securing government funding, Third-Order's sole financial source until 2003.

This corporate profile is based upon information provided by management of Third-Order Nanotechnologies, Inc. The information is not intended to be and shall not constitute, an offer to sell or solicit any offer to buy securities. It is intended for information only and to increase awareness of Third-Order Nanotechnologies, Inc.'s services. Safe Harbor Statement: The statements in this document relating to future product availability, collaboration and partnership, and positive direction are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some or all of the aspects anticipated by these forward-looking statements may not, in fact, occur. Factors that could cause or contribute to such differences include, but are not limited to, contractual difficulties, demand for Third Order Nanotechnologies, Inc.’ products, the future market price of Third-Order Nanotechnologies, Inc. common stock and the Company's ability to obtain necessary future financing. EQUITIES Magazine was paid by Third-Order Nanotechnologies, Inc. to write and print this profile. Before investing in any security, you are strongly advised to review all public filings of the issuer of such security, which can be found at www.sec.gov, as well as the warnings published by the Securities and Exchange Commission at http://www.sec.gov/investor.shtml.