THE WALL STREET TRANSCRIPT

 

Questioning Market Leaders For Long Term Investors


THOMAS F. KRUCKER - ELAST TECHNOLOGIES - (ESTG)
CEO Interview - published 10/16/00

DOCUMENT # KAZ617

THOMAS F. KRUCKER, Esq., is President, Chief Executive Officer, Director of Elast Technologies, Inc., Mr. Krucker graduated from the University of Arizona in 1962. He lettered in college football and swimming at both the Universities of Illinois and Arizona, and held a world record for the 50-meter freestyle. He received a Juris Doctorate degree from Pepperdine University in 1969. Initially a US Federal Agent, he later shifted to the business world, where he has had a varied and universal record of success as a manager and entrepreneur. He spent a number of years working for Toyota Motor Sales, USA, rising to National Import Manager. During that time Toyota became the largest selling imported auto brand in the US auto market. Later in his career, he developed a branded, fast-food pizza concept that was sold to the Host Division of Marriott Corporation and was placed in all 55 of their airport locations. More recently, he was Chief Operating Officer of Fun City Popcorn, Inc., a private Nevada corporation which recently changed its name to Tone Products. He left Tone to become President of Elast Technologies. As can be seen from his lengthy record of business successes, Mr. Krucker has very strong management skills with a unique experience in start-up companies and bringing those start-up companies to the public sector.

Sector: Medical Supplies

TWST: Would you give us a brief overview of Elast Technologies, Inc.?

Mr. Krucker: Elast Technologies is a technology development company in the medical equipment field, based in Las Vegas. Elast stands for Electronic Allergo Sensitivity Test. This is an allergy sensitivity testing instrument whose technology is based on the flow of electricity in the human body. We have a patent on the invention and we believe that this will, when finally completed — and it is nearly there — will change the way medicine is practiced. We are a fully SEC reporting company, incorporated in 1996 in Nevada. The reason why we are in Nevada is because the inventor of the Elast Device™, Robert Milne, who is a rather famous medical doctor here, is the Founder. He specializes in family practice. He is board certified and he practices family integrated medicine. Dr. Milne learned pretty early on that people were having reactions to food, especially food items in the grocery stores, interestingly enough. He was called out on several emergency cases where people would collapse in a food aisle. It was always around the sugar area, maybe the cookies, or the sodas, or in the chemical aisle, dishwasher soap, detergents, or in the wheat aisle, the bakery goods. These were people who were really having an anaphylactic type of reaction. When he arrived he would assume that they had a heart attack or some kind of fatal situation. When he gave them all the tests, these people were totally normal and as soon as they got away from the aisle and outside to where the ambulance was waiting, the people would walk away saying, “There is nothing wrong with me.” He had about 19 incidents over a short-term period of his practice and determined that there had to be some kind of loss of energy when people were coming in contact with something to which they were so violently allergic. Sure enough, four years later into our research and development, and we now can see a reaction on the PC screen. Basically, we hook you up to what used to be a dual sensor, but now we are on a solid electrode circuit that records the body’s voltage. The data is transferred to another board, and finally to a PC computer for the software analysis. We are able to see and sense the body’s energy loss in real time. We process the signal and then document and graphically provide an accurate real time assessment of your sensitivity. That means that you or me or anybody else has a little battery inside and it’s a voltage. This is something that we proved when we got the device to a fairly sophisticated state and took it to MIT Draper Labs. They certified that in fact we were seeing the body’s energy, but it was not clear. Since then we have an absolutely clear signal. We actually can see you and graph you. In this respect, typically I run about a quarter of a volt and if I am in close proximity to something to which I’m allergic I can see a spike. For the real anaphylactic people, it looks like the New York skyline, with all kinds of spikes coming off. Eventually, those come back down to the original body voltage once the food or the medicine is removed from the person. It’s very quick. It’s recorded and seen in real time and it’s the alternative to the barbaric way of testing people with blood pricking and all the rest of these test that take weeks and are painful and invasive. This is noninvasive; it’s like an EKG. The difference between Elast’s and all the other machines that you’ve seen out there, including an EKG, is that we don’t put energy in to get energy out. It’s strictly your battery kicking off the electronic signal to the PC.

TWST: How do you go beyond that?

Mr. Krucker: We have another division that I want to talk about later, which is interesting because we’re not going to just watch the grass grow, which most R&Ds do. We have been going on to sophisticated levels, but still aren’t ready to take it out to the doctors. However, when it’s ready we’ll take it out to the hospitals or the doctors or the emergency areas and it will be a special PC. It will be in the doctor’s office. It will be hooked up electronically to a data center and, much the same as over the Internet, the signal will be recorded and the data will be gathered for us. This will eventually become the most valuable part of the whole company. That data will come back to the doctor’s office within seconds and it will give the doctor a chart, another tool, another aid to determine what’s wrong with this patient. Why does that patient’s nose stop up when they eat certain things? Why do they have no energy in the afternoon after they eat lunch? Those are the kinds of diagnostics we’re perfecting now. Those are minor issues, perhaps. We can see much of the anaphylactic activity if you are really going to die because you take that medicine or ate shellfish or peanut butter. We can see that very dramatically. Then, we were approached recently by an organization and an individual in the organization of a very, very large chiropractic group. They saw our work as an unbelievable way to ratify and endorse the way chiropractic is practiced. We’ve had several tests now where we have the individual back on the screen, just like we would with the medical aspect. However, in this case, the chiropractor gives the patient an adjustment and we can actually see a dramatic rise in the energy level after the adjustment had taken place. I personally was clocking at .188, .189 for three minutes or so. Then I got an adjustment to my neck, which I have some problems with, and it jumped to about 220. It stayed there; it wasn’t a spike. I talked about the spikes with the medicine or the food allergies, but this was an absolute increase in the energy level and it stayed there. I had a new energy level. There’s nothing that went in that could have been distorted to come back out. We even use fibre optics and so there’s no way that an antenna could be interpreted in this process. Our scientists absolutely endorse it as being what it is. We’ve created this division, so that we can start obtaining some cash flow and we have some interesting cash flow analysis with just a very minor few of these chiropractic devices being placed in a chiropractic community of 70,000. I think our numbers show that if we just picked up 500 of those in the first year, we’d be generating about $5 million, very conservatively, not even using the machine 20% of the time. So we believe that it’s a good stock value from that standpoint, a good shareholder value. Most of our constituency is still in place. Most are doctors, colleagues, friends or patients who truly believe that this is necessary, something that will really help people.

TWST: What does the physician do with the assessment of the patient’s sensitivity? What does he do with that information?

Mr. Krucker: First of all, you have to realize the typical physician is trying to find out what’s wrong with Mrs. Jones. You might as well flip a coin, because even the blood tests that come back are less than 50%. They are in the 40% range. I’m a good example. I supposedly was not allergic to milk or wheat and it never showed up in a blood test. When we did our assessment of me, I definitely was because I was feeling stopped up when I had milk products. I have a history in my family of being allergic to milk products and when I went off the milk products I started breathing again without having to use nose drops. So there is a tremendous number of cases that go undetected, especially from prestigious places like Mayo and Scripts. Dr. Milne probably has 70% of his practice from out of state because of really severe cases — Mrs. Jones is told she is not allergic to such and such and we find that she is. So as far as the doctor receiving our particular device, it’s in the office, the patient knows by the time they leave what the problem is, as opposed to flipping a coin and two or three weeks and thousands of dollars later. I’ll give you an example. Dr. Milne had a patient who turned out to be one of our investors. She had gone through a full-blown Mayo testing for $10,000 after she had had headaches for 10 years. This lady was told that she had a reaction to perfume and the lady doesn’t wear perfume. She came to Dr. Milne, and he determined she was allergic to chocolate and a couple of other things. Well, she hasn’t had a headache for the last four months. He’s written books on this, too. Basically, it’s a medical, scientific situation. The chiropractor was an offshoot. We hadn’t even thought about it. They really got excited about it, because they’ve always maintained that they are helping the people in their energy and the nerves, releasing all of the constriction by adjustment. To see it graphically gets them very excited.

TWST: Where would you like to see ELAST in three years?

Mr. Krucker: It all depends on how soon the breakthrough comes. We always ask the science team, how are we doing?, and they make good strides, as I indicated. I started off talking about how we were using dual sensors. We’re using a single sensor and we were always measuring one meridian point. Now we can actually, with some algorithms that they’ve developed, measure 34 points in your body at the same time and average them. From the time that they complete the medical part, the cash flows are so tremendous they are really scary and I don’t want to put ourselves anywhere near the Microsoft thing. You are going to take all the testing that’s been done and change it. We had a team from Japan here not too long ago and they claim to be the second largest medical device distributor. They indicated to us that the blood test that they give there — they call it the RAST test — was probably 40% effective. And they do in the range of 120 million — but let’s just use 100 million — tests a year. That’s not the dollar. You have to multiply that number by a factor. So if you are only making $10 on the test … and that’s just Japan. We can talk about Europe, which has as many doctors as the United States. We are contacted all the time. We just received another one in from Korea. We’ve had them in from China and already have somebody signed up for Australia. It’s a huge, huge situation, but it’s never been done. I believe that there will be a Nobel prize awarded here when it’s finally completed. This is what I believe. When you talk to the doctors about it, they say that if we really have what we have, it’s absolutely staggering. So we have made some major, major accomplishments. To be able to see your body’s energy on the screen for the first time, to our knowledge has never been known. We researched the patent area and it’s totally open because we’re in an area where we’re not putting energy in to get energy out. Even the EKG does that. This does not do that. It just measures your body voltage kicking out at the time of measurement.

TWST: What significant changes do you expect in your markets over the next several years?

Mr. Krucker: We don’t see anybody in our market. In the snack food business, you are going to be competing against FritoLay for shelf space and you are going to be paying for shelf space. Then someone is going to knock your product off and you’ll have something pretty close to it. In our case, we don’t see anything in there relative to the patent area that could duplicate it. The patents are so significant in the area that I don’t believe that we will see any competition once we get this thing going for years and years and years. That’s the best I can predict. It’s not like somebody has some part of the area and they can expand. There’s nobody else. It’s difficult because our guys are trail blazing every day. There’s not a lot of research or technical stuff they can go to. A lot of time they’ll need some parts, like this multiple algorithm I mentioned earlier, where we’re now measuring, I believe it’s 34 meridian points at once. Well, they had to invent every part of the process to put it on the board and then create the board. In that respect it’s really a difficult situation but at the same time this progress that we’ve now reached is actually a nice application for the chiropractic community.

TWST: Assuming all goes well, when do you expect Elast to be on the market?

Mr. Krucker: We’re in the market now. We’re on the Bulletin Board, as I indicated earlier. We’re a fully reported SEC company. As far as the device itself, we’re putting the device on the market within three months. We believe we have a device that adapts to just about anything in chiropractic offices. As I indicated, our first thrust was in the medical area, and then we discovered that this had an absolute scientific validation for the chiropractic community. Accordingly, we’ve had many strategic discussions with some top people in the chiropractic field and we believe that we can take this out there and within three months start the 12-month projected revenue stream that I indicated earlier of somewhere around $5 million very conservatively.

TWST: Will acquisitions play a part in your future?

Mr. Krucker: We’ve attempted and “nosed around” a few. It’s just that we don’t feel that it’s necessary, when we get down to the final analysis, to give up a tremendous amount of the company because we’re so unique. In other words, we really believe that our particular status in the scientific world and the impact it will have are so staggering that it doesn’t make a lot of sense unless we obviously were acquired by somebody who could expedite it exponentially. One of our objectives is to do a secondary offering and get on one of the bigger exchanges. We just returned from a big investment conference not too long ago and had some tremendous interest. In that respect I think it’s going to be good for the company and good for the shareholders.

TWST: How is that company using the Internet to its advantage?

Mr. Krucker: We would use it from the standpoint of a communication link. We’ll establish a data center in Nevada and then electronically, the PCs in all the particular patients’ areas, doctors’ offices, etc. will be linked to the data center. It’s not exactly e-mail, but it’s along those lines.

TWST: Do you have a Website?

Mr. Krucker: Yes, we do. It is www.elast.com. As I indicated, it will bring everybody up to speed on the company, as well as any of the advances. We try to stay current, educating our shareholders to the breakthroughs.

TWST: What are the risks or general concerns regarding Elast Technologies?

Mr. Krucker: It used to be, because you’re in the field where nobody has ever done it, it just depended on how much money you had. In this case we didn’t have that and it was a doctor’s dream and any other scientist or top medical physician who was in the field was extremely frustrated with the state of the art. So this is something we were doing that had never been done, and we heard from a lot of people that it couldn’t have been done. We actually visited National Science Labs earlier, hoping they could help us, and we received a lot of rejections because it hadn’t been done and a lot of the scientists weren’t trained in that area. They would come back and say to us, “How do you know what kind of energy is in that little jar of wheat that you are testing somebody on? It wasn’t scientific in that respect, so they would reject it. Now I think it’s turned around — amazingly so, because the universities that we’ve taken it to, especially on the West Coast (all very prestigious universities), have all ratified and validated where we are scientifically. They are amazed at what we have, and that we really can see an individual’s body energy on the screen at any point in time. So now, because of the interest that the chiropractics have, it makes it a lot easier. We can see the body’s energy. They are telling us that this is something that their Founder, a fellow by the name of Palmer, was trying to do back in the 1930s. They are basically saying that this is something they’ve been looking for in order to verify that people are getting healthy when they have their manipulations. So it’s an income stream for us and that, obviously, is something you always worry about. This is not a flashy stock, you are not going to double tomorrow. But it could go, who knows? It could be a triple-digit stock if we got the final stuff done. So now that we have an income stream coming in, we believe with a chiropractic, I believe that other division will keep the whole division healthy. And hopefully we’ll get our underwriting finished, and we’ll be on a higher exchange, maybe the American or the NASDAQ, instead of the Bulletin Board, and it will give people a little better shareholder value.

TWST: As President, where are you spending your time in the company?

Mr. Krucker: Most of my time, especially in the early days, was creating awareness about the company, assisting a doctor — who still is in a full-time practice — in all phases, whether it was getting this into a particular university or a science lab or raising money. Raising money is an important thing when you are in research and development, and lately it seems like I’m still raising money because we’re expanding in an area that’s going to return some money back instead of just going into the research hole. Most of my time is spent talking to the investor community, the financial community, and it’s basically keeping them up to speed on what our science people are doing. Speaking of the scientists, they are so outstanding that just recently we were given the only available vacancy in the incubator lab, the famous incubator lab down in San Diego that is a joint effort of NASA, the State of California and the City of San Diego and that goes after high-tech companies they believe have some great impact and great future. They gave us the access to a lot of equipment that we wouldn’t be able to afford — lasers and those kinds of things, as well as some of the students if we need some help on a big project.

TWST: What should investors look at in your financial reports?

Mr. Krucker: We have people who get all excited and think, “Wow, this thing’s going to be a real big hit,” and then they get disillusioned after a while because maybe some of the sharp guys come in and short us because we’re not a big company and we don’t have a lot of horsepower. But then we have another group which is, as I indicated before, the core group that was with us from the very beginning, and those people still have really good value because they took a chance. I think they are really loyal. I take a look at the shareholder list frequently, and I see the same names there that have been with us for four years. And the other ones that come in and think they have a big deal and then they get disillusioned after a month or so, they come and they go. But I would have to say a good 55% to 60% of the original investors are still in the company, including, obviously, the doctor and myself. I think up until now it’s been just a typical research and development company. They lose money every month. And maybe that’s too harsh of a word, but let’s say we invest money every month. But at any rate, it is a hole that’s gone into and there’s not anything to really look at from the standpoint of revenue. However, that’s changing now. That’s why we’re really excited about this coordination we have going with the other division. We have a fellow who has written several books in the chiropractic field, Dr. Terry Rondberg, who is the Publisher of the largest journal for chiropractors. I think it goes to somewhere in the vicinity of 70,000 chiropractors, and he’s heading up our chiropractic division. He’s very positive about it and feels that it validates what he and his associates — and for years, the chiropractics — have been saying, that it does help you. It does increase your energy by releasing the energy or the restriction that you have when you go in there and get adjusted. This particular aspect of the device is something that we developed and didn’t really even know what the impact would be. They are extremely excited about it and so in that respect, I think we’re really looking forward to that revenue stream while we continue to work on the other aspect of the device for the doctors in evaluating the drugs and the food allergies.

TWST: How do you feel about your current stock price?

Mr. Krucker: I think it’s very underrated. I think we’ve been as high as $3 and again, I think we received the whipsaw effect of, as I indicated before, the guys who come in and out. We’ve had some very fine investment research done on us. Xcel Associates did an extremely good report, and their Director of Research, Bill Wally, is a CFA, he’s a four-time member of Institutional Investor magazine’s All-American Research Team. He wrote a very fine article, did extensive research — this is not a one-pager, this is about an 18- or 19-page report that went into the field— and went into the background, the libraries, our science department, and the incubator lab. And National Capital did a very fine report back in late May. They also had some very nice things to say, recommending buy. The Donner Corp. International of Santa Anna, CA also gave us a buy recommendation. So as far as credibility is concerned, as far as the science and the status of where we are is concerned, compared to anything else that’s an alternative, there’s no comparison.

TWST: What two or three additional reasons would you give investors to buy stock in Elast Technologies today?

Mr. Krucker: I think right now, especially with the new division for chiropractors, there is a great opportunity. Number one, you get your cake and your ice cream. You’ve got the original dedication and objective of change in the way medicine is practiced, as far as evaluating people’s reactions to food items and medicines. I should underscore the medicines a little more, because right now the only way that you know you are going to react to a medicine if you haven’t had it — and there are so many new ones coming out — is invasively, and we wait to see whether or not you are going to fall down and maybe die. And don’t forget, of the people who are 60 years and older, 90% are taking more than one medicine, and there’s a major problem with interacting medicines. So you have the one medicine, maybe for blood pressure, and then you’ve got another problem and the doctor gives you another medicine, and you don’t know if it’s a safe medicine or not, other than the fact that it’s going to interact with the one you are already taking. So from that standpoint, the potential for a huge return on an investment is good because we’ll be the only one in the field with that type of a situation. And on the other side, you’ve got a cash flow situation where you are going to finally see some revenues coming in. So from that standpoint I think you’ve got your cake and your ice cream.

TWST: Is there anything I’ve missed or overlooked that you’d like to bring up?

Mr. Krucker: We’re moving along on this latest division and are still working hard. When we do get our new funding, which we expect to do very quickly, we’re going to add personnel and accelerate both sides — the medical side with a couple more algorithms fellows, probably some programming people, and another scientist, and then as far as the other one, it will be more operationally oriented.

TWST: Thank you. (RF)TWST: Would you give us a brief overview of Elast Technologies, Inc.?

Mr. Krucker: Elast Technologies is a technology development company in the medical equipment field, based in Las Vegas. Elast stands for Electronic Allergo Sensitivity Test. This is an allergy sensitivity testing instrument whose technology is based on the flow of electricity in the human body. We have a patent on the invention and we believe that this will, when finally completed — and it is nearly there — will change the way medicine is practiced. We are a fully SEC reporting company, incorporated in 1996 in Nevada. The reason why we are in Nevada is because the inventor of the Elast Device™, Robert Milne, who is a rather famous medical doctor here, is the Founder. He specializes in family practice. He is board certified and he practices family integrated medicine. Dr. Milne learned pretty early on that people were having reactions to food, especially food items in the grocery stores, interestingly enough. He was called out on several emergency cases where people would collapse in a food aisle. It was always around the sugar area, maybe the cookies, or the sodas, or in the chemical aisle, dishwasher soap, detergents, or in the wheat aisle, the bakery goods. These were people who were really having an anaphylactic type of reaction. When he arrived he would assume that they had a heart attack or some kind of fatal situation. When he gave them all the tests, these people were totally normal and as soon as they got away from the aisle and outside to where the ambulance was waiting, the people would walk away saying, “There is nothing wrong with me.” He had about 19 incidents over a short-term period of his practice and determined that there had to be some kind of loss of energy when people were coming in contact with something to which they were so violently allergic. Sure enough, four years later into our research and development, and we now can see a reaction on the PC screen. Basically, we hook you up to what used to be a dual sensor, but now we are on a solid electrode circuit that records the body’s voltage. The data is transferred to another board, and finally to a PC computer for the software analysis. We are able to see and sense the body’s energy loss in real time. We process the signal and then document and graphically provide an accurate real time assessment of your sensitivity. That means that you or me or anybody else has a little battery inside and it’s a voltage. This is something that we proved when we got the device to a fairly sophisticated state and took it to MIT Draper Labs. They certified that in fact we were seeing the body’s energy, but it was not clear. Since then we have an absolutely clear signal. We actually can see you and graph you. In this respect, typically I run about a quarter of a volt and if I am in close proximity to something to which I’m allergic I can see a spike. For the real anaphylactic people, it looks like the New York skyline, with all kinds of spikes coming off. Eventually, those come back down to the original body voltage once the food or the medicine is removed from the person. It’s very quick. It’s recorded and seen in real time and it’s the alternative to the barbaric way of testing people with blood pricking and all the rest of these test that take weeks and are painful and invasive. This is noninvasive; it’s like an EKG. The difference between Elast’s and all the other machines that you’ve seen out there, including an EKG, is that we don’t put energy in to get energy out. It’s strictly your battery kicking off the electronic signal to the PC.

TWST: How do you go beyond that?

Mr. Krucker: We have another division that I want to talk about later, which is interesting because we’re not going to just watch the grass grow, which most R&Ds do. We have been going on to sophisticated levels, but still aren’t ready to take it out to the doctors. However, when it’s ready we’ll take it out to the hospitals or the doctors or the emergency areas and it will be a special PC. It will be in the doctor’s office. It will be hooked up electronically to a data center and, much the same as over the Internet, the signal will be recorded and the data will be gathered for us. This will eventually become the most valuable part of the whole company. That data will come back to the doctor’s office within seconds and it will give the doctor a chart, another tool, another aid to determine what’s wrong with this patient. Why does that patient’s nose stop up when they eat certain things? Why do they have no energy in the afternoon after they eat lunch? Those are the kinds of diagnostics we’re perfecting now. Those are minor issues, perhaps. We can see much of the anaphylactic activity if you are really going to die because you take that medicine or ate shellfish or peanut butter. We can see that very dramatically. Then, we were approached recently by an organization and an individual in the organization of a very, very large chiropractic group. They saw our work as an unbelievable way to ratify and endorse the way chiropractic is practiced. We’ve had several tests now where we have the individual back on the screen, just like we would with the medical aspect. However, in this case, the chiropractor gives the patient an adjustment and we can actually see a dramatic rise in the energy level after the adjustment had taken place. I personally was clocking at .188, .189 for three minutes or so. Then I got an adjustment to my neck, which I have some problems with, and it jumped to about 220. It stayed there; it wasn’t a spike. I talked about the spikes with the medicine or the food allergies, but this was an absolute increase in the energy level and it stayed there. I had a new energy level. There’s nothing that went in that could have been distorted to come back out. We even use fibre optics and so there’s no way that an antenna could be interpreted in this process. Our scientists absolutely endorse it as being what it is. We’ve created this division, so that we can start obtaining some cash flow and we have some interesting cash flow analysis with just a very minor few of these chiropractic devices being placed in a chiropractic community of 70,000. I think our numbers show that if we just picked up 500 of those in the first year, we’d be generating about $5 million, very conservatively, not even using the machine 20% of the time. So we believe that it’s a good stock value from that standpoint, a good shareholder value. Most of our constituency is still in place. Most are doctors, colleagues, friends or patients who truly believe that this is necessary, something that will really help people.

TWST: What does the physician do with the assessment of the patient’s sensitivity? What does he do with that information?

Mr. Krucker: First of all, you have to realize the typical physician is trying to find out what’s wrong with Mrs. Jones. You might as well flip a coin, because even the blood tests that come back are less than 50%. They are in the 40% range. I’m a good example. I supposedly was not allergic to milk or wheat and it never showed up in a blood test. When we did our assessment of me, I definitely was because I was feeling stopped up when I had milk products. I have a history in my family of being allergic to milk products and when I went off the milk products I started breathing again without having to use nose drops. So there is a tremendous number of cases that go undetected, especially from prestigious places like Mayo and Scripts. Dr. Milne probably has 70% of his practice from out of state because of really severe cases — Mrs. Jones is told she is not allergic to such and such and we find that she is. So as far as the doctor receiving our particular device, it’s in the office, the patient knows by the time they leave what the problem is, as opposed to flipping a coin and two or three weeks and thousands of dollars later. I’ll give you an example. Dr. Milne had a patient who turned out to be one of our investors. She had gone through a full-blown Mayo testing for $10,000 after she had had headaches for 10 years. This lady was told that she had a reaction to perfume and the lady doesn’t wear perfume. She came to Dr. Milne, and he determined she was allergic to chocolate and a couple of other things. Well, she hasn’t had a headache for the last four months. He’s written books on this, too. Basically, it’s a medical, scientific situation. The chiropractor was an offshoot. We hadn’t even thought about it. They really got excited about it, because they’ve always maintained that they are helping the people in their energy and the nerves, releasing all of the constriction by adjustment. To see it graphically gets them very excited.

TWST: Where would you like to see ELAST in three years?

Mr. Krucker: It all depends on how soon the breakthrough comes. We always ask the science team, how are we doing?, and they make good strides, as I indicated. I started off talking about how we were using dual sensors. We’re using a single sensor and we were always measuring one meridian point. Now we can actually, with some algorithms that they’ve developed, measure 34 points in your body at the same time and average them. From the time that they complete the medical part, the cash flows are so tremendous they are really scary and I don’t want to put ourselves anywhere near the Microsoft thing. You are going to take all the testing that’s been done and change it. We had a team from Japan here not too long ago and they claim to be the second largest medical device distributor. They indicated to us that the blood test that they give there — they call it the RAST test — was probably 40% effective. And they do in the range of 120 million — but let’s just use 100 million — tests a year. That’s not the dollar. You have to multiply that number by a factor. So if you are only making $10 on the test … and that’s just Japan. We can talk about Europe, which has as many doctors as the United States. We are contacted all the time. We just received another one in from Korea. We’ve had them in from China and already have somebody signed up for Australia. It’s a huge, huge situation, but it’s never been done. I believe that there will be a Nobel prize awarded here when it’s finally completed. This is what I believe. When you talk to the doctors about it, they say that if we really have what we have, it’s absolutely staggering. So we have made some major, major accomplishments. To be able to see your body’s energy on the screen for the first time, to our knowledge has never been known. We researched the patent area and it’s totally open because we’re in an area where we’re not putting energy in to get energy out. Even the EKG does that. This does not do that. It just measures your body voltage kicking out at the time of measurement.

TWST: What significant changes do you expect in your markets over the next several years?

Mr. Krucker: We don’t see anybody in our market. In the snack food business, you are going to be competing against FritoLay for shelf space and you are going to be paying for shelf space. Then someone is going to knock your product off and you’ll have something pretty close to it. In our case, we don’t see anything in there relative to the patent area that could duplicate it. The patents are so significant in the area that I don’t believe that we will see any competition once we get this thing going for years and years and years. That’s the best I can predict. It’s not like somebody has some part of the area and they can expand. There’s nobody else. It’s difficult because our guys are trail blazing every day. There’s not a lot of research or technical stuff they can go to. A lot of time they’ll need some parts, like this multiple algorithm I mentioned earlier, where we’re now measuring, I believe it’s 34 meridian points at once. Well, they had to invent every part of the process to put it on the board and then create the board. In that respect it’s really a difficult situation but at the same time this progress that we’ve now reached is actually a nice application for the chiropractic community.

TWST: Assuming all goes well, when do you expect Elast to be on the market?

Mr. Krucker: We’re in the market now. We’re on the Bulletin Board, as I indicated earlier. We’re a fully reported SEC company. As far as the device itself, we’re putting the device on the market within three months. We believe we have a device that adapts to just about anything in chiropractic offices. As I indicated, our first thrust was in the medical area, and then we discovered that this had an absolute scientific validation for the chiropractic community. Accordingly, we’ve had many strategic discussions with some top people in the chiropractic field and we believe that we can take this out there and within three months start the 12-month projected revenue stream that I indicated earlier of somewhere around $5 million very conservatively.

TWST: Will acquisitions play a part in your future?

Mr. Krucker: We’ve attempted and “nosed around” a few. It’s just that we don’t feel that it’s necessary, when we get down to the final analysis, to give up a tremendous amount of the company because we’re so unique. In other words, we really believe that our particular status in the scientific world and the impact it will have are so staggering that it doesn’t make a lot of sense unless we obviously were acquired by somebody who could expedite it exponentially. One of our objectives is to do a secondary offering and get on one of the bigger exchanges. We just returned from a big investment conference not too long ago and had some tremendous interest. In that respect I think it’s going to be good for the company and good for the shareholders.

TWST: How is that company using the Internet to its advantage?

Mr. Krucker: We would use it from the standpoint of a communication link. We’ll establish a data center in Nevada and then electronically, the PCs in all the particular patients’ areas, doctors’ offices, etc. will be linked to the data center. It’s not exactly e-mail, but it’s along those lines.

TWST: Do you have a Website?

Mr. Krucker: Yes, we do. It is www.elast.com. As I indicated, it will bring everybody up to speed on the company, as well as any of the advances. We try to stay current, educating our shareholders to the breakthroughs.

TWST: What are the risks or general concerns regarding Elast Technologies?

Mr. Krucker: It used to be, because you’re in the field where nobody has ever done it, it just depended on how much money you had. In this case we didn’t have that and it was a doctor’s dream and any other scientist or top medical physician who was in the field was extremely frustrated with the state of the art. So this is something we were doing that had never been done, and we heard from a lot of people that it couldn’t have been done. We actually visited National Science Labs earlier, hoping they could help us, and we received a lot of rejections because it hadn’t been done and a lot of the scientists weren’t trained in that area. They would come back and say to us, “How do you know what kind of energy is in that little jar of wheat that you are testing somebody on? It wasn’t scientific in that respect, so they would reject it. Now I think it’s turned around — amazingly so, because the universities that we’ve taken it to, especially on the West Coast (all very prestigious universities), have all ratified and validated where we are scientifically. They are amazed at what we have, and that we really can see an individual’s body energy on the screen at any point in time. So now, because of the interest that the chiropractics have, it makes it a lot easier. We can see the body’s energy. They are telling us that this is something that their Founder, a fellow by the name of Palmer, was trying to do back in the 1930s. They are basically saying that this is something they’ve been looking for in order to verify that people are getting healthy when they have their manipulations. So it’s an income stream for us and that, obviously, is something you always worry about. This is not a flashy stock, you are not going to double tomorrow. But it could go, who knows? It could be a triple-digit stock if we got the final stuff done. So now that we have an income stream coming in, we believe with a chiropractic, I believe that other division will keep the whole division healthy. And hopefully we’ll get our underwriting finished, and we’ll be on a higher exchange, maybe the American or the NASDAQ, instead of the Bulletin Board, and it will give people a little better shareholder value.

TWST: As President, where are you spending your time in the company?

Mr. Krucker: Most of my time, especially in the early days, was creating awareness about the company, assisting a doctor — who still is in a full-time practice — in all phases, whether it was getting this into a particular university or a science lab or raising money. Raising money is an important thing when you are in research and development, and lately it seems like I’m still raising money because we’re expanding in an area that’s going to return some money back instead of just going into the research hole. Most of my time is spent talking to the investor community, the financial community, and it’s basically keeping them up to speed on what our science people are doing. Speaking of the scientists, they are so outstanding that just recently we were given the only available vacancy in the incubator lab, the famous incubator lab down in San Diego that is a joint effort of NASA, the State of California and the City of San Diego and that goes after high-tech companies they believe have some great impact and great future. They gave us the access to a lot of equipment that we wouldn’t be able to afford — lasers and those kinds of things, as well as some of the students if we need some help on a big project.

TWST: What should investors look at in your financial reports?

Mr. Krucker: We have people who get all excited and think, “Wow, this thing’s going to be a real big hit,” and then they get disillusioned after a while because maybe some of the sharp guys come in and short us because we’re not a big company and we don’t have a lot of horsepower. But then we have another group which is, as I indicated before, the core group that was with us from the very beginning, and those people still have really good value because they took a chance. I think they are really loyal. I take a look at the shareholder list frequently, and I see the same names there that have been with us for four years. And the other ones that come in and think they have a big deal and then they get disillusioned after a month or so, they come and they go. But I would have to say a good 55% to 60% of the original investors are still in the company, including, obviously, the doctor and myself. I think up until now it’s been just a typical research and development company. They lose money every month. And maybe that’s too harsh of a word, but let’s say we invest money every month. But at any rate, it is a hole that’s gone into and there’s not anything to really look at from the standpoint of revenue. However, that’s changing now. That’s why we’re really excited about this coordination we have going with the other division. We have a fellow who has written several books in the chiropractic field, Dr. Terry Rondberg, who is the Publisher of the largest journal for chiropractors. I think it goes to somewhere in the vicinity of 70,000 chiropractors, and he’s heading up our chiropractic division. He’s very positive about it and feels that it validates what he and his associates — and for years, the chiropractics — have been saying, that it does help you. It does increase your energy by releasing the energy or the restriction that you have when you go in there and get adjusted. This particular aspect of the device is something that we developed and didn’t really even know what the impact would be. They are extremely excited about it and so in that respect, I think we’re really looking forward to that revenue stream while we continue to work on the other aspect of the device for the doctors in evaluating the drugs and the food allergies.

TWST: How do you feel about your current stock price?

Mr. Krucker: I think it’s very underrated. I think we’ve been as high as $3 and again, I think we received the whipsaw effect of, as I indicated before, the guys who come in and out. We’ve had some very fine investment research done on us. Xcel Associates did an extremely good report, and their Director of Research, Bill Wally, is a CFA, he’s a four-time member of Institutional Investor magazine’s All-American Research Team. He wrote a very fine article, did extensive research — this is not a one-pager, this is about an 18- or 19-page report that went into the field— and went into the background, the libraries, our science department, and the incubator lab. And National Capital did a very fine report back in late May. They also had some very nice things to say, recommending buy. The Donner Corp. International of Santa Anna, CA also gave us a buy recommendation. So as far as credibility is concerned, as far as the science and the status of where we are is concerned, compared to anything else that’s an alternative, there’s no comparison.

TWST: What two or three additional reasons would you give investors to buy stock in Elast Technologies today?

Mr. Krucker: I think right now, especially with the new division for chiropractors, there is a great opportunity. Number one, you get your cake and your ice cream. You’ve got the original dedication and objective of change in the way medicine is practiced, as far as evaluating people’s reactions to food items and medicines. I should underscore the medicines a little more, because right now the only way that you know you are going to react to a medicine if you haven’t had it — and there are so many new ones coming out — is invasively, and we wait to see whether or not you are going to fall down and maybe die. And don’t forget, of the people who are 60 years and older, 90% are taking more than one medicine, and there’s a major problem with interacting medicines. So you have the one medicine, maybe for blood pressure, and then you’ve got another problem and the doctor gives you another medicine, and you don’t know if it’s a safe medicine or not, other than the fact that it’s going to interact with the one you are already taking. So from that standpoint, the potential for a huge return on an investment is good because we’ll be the only one in the field with that type of a situation. And on the other side, you’ve got a cash flow situation where you are going to finally see some revenues coming in. So from that standpoint I think you’ve got your cake and your ice cream.

TWST: Is there anything I’ve missed or overlooked that you’d like to bring up?

Mr. Krucker: We’re moving along on this latest division and are still working hard. When we do get our new funding, which we expect to do very quickly, we’re going to add personnel and accelerate both sides — the medical side with a couple more algorithms fellows, probably some programming people, and another scientist, and then as far as the other one, it will be more operationally oriented.

TWST: Thank you. (RF)

THOMAS F. KRUCKER
 President & CEO
 Elast Technologies, Inc.
 2505 Rancho Bel Air
 Las Vegas, NV 89107
 (702) 878-8310
 (702) 259-2641 - FAX
www.elast.com
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