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TWST: Can we start with an introduction to Image Scan (London: IGE.L) including a quick historical sketch and a picture of what you are doing today?

Mr. Fox: The Company was formed back in October 1996 on the basis of some technology that we identified at the Nottingham Trent University here in the UK. The technology was related to multiple-view x-ray imaging. There is a fundamental issue with x-ray images in that the image they produce is a shadowgraph - a flat, two dimensional image containing no depth information at all. Now, that is not good enough in a lot of applications where you want to use x-ray images. The classic example, and the one that most people are familiar with is an airport application where hand-baggage and hold baggage is screened. In that environment, you need to understand the relationship of objects to one another in a bag so that you can determine whether they are potentially a threat. It's relatively easy to see and understand a gun or knife image, but when you are looking for improvised devices – say bombs or incendiary devices or even the component parts of those items - it's very difficult to actually make sense of the image you are looking at, unless of course you have some depth information. The Company was formed on the basis of being able to produce real-time, 3-D, x-ray images of objects. We started in the security sector and we have since expanded into the industrial sector. The fundamental difference between the two sectors is that in the security sector we are looking to generate images for an operator to look at so they can make a decision on its safety. The key here is to present the best possible information to the operator in real-time, first time, every time. That's what it's all about – image quality and visual presentation. However, in the industrial market, we are looking at taking measurements of objects and making an automated assessment of whether the object we are looking at has all the right components in the right places, of the right shape and size, and whether there are contaminants in there. That is the fundamental difference between the two types of business. There is some degree of overlap because we do some automated inspection in the security side and we do some visual presentation in the industrial side.

TWST: Have you reached commercialization and launched products onto the market or are you still in a developmental stage?

Mr. Fox: In the security sector, we have signed an agreement with one of the largest existing players - a company called Rapiscan. If you look at the security x-ray market, we consider there to be four major players out there: Rapiscan, Smiths, InVison and L3 Communications. As a company that is trying to get a position in this sector, we asked ourselves the basic question, “What do we actually do?” Well, what we don't is make lumps of machinery; that's not our business. We are a high-tech company involved in the development of x-ray cameras. So, we supply the cameras to Rapiscan for the AXIS-3D® machine, which is the world’s first real-time 3-D x-ray imaging system. Our route to market therefore – and this is likely to be for both sectors - will be more as an OEM supplier than direct sales to end-users. Having said that, of course, one of the first things we do in both the sectors is work very closely with an end user to develop the technology and our initial sales will inevitably be directly to the end users to prove the technology. But as soon as we can establish a more appropriate route to market through an existing value added retailer, that becomes the route that we take forward.

TWST: Can you outline the strategy for the next couple of years and what achievements will make that period a relative success from your point of view?

Mr. Fox: I mentioned we signed an agreement with Rapiscan and the real product launch was this month. We have had a number of machines out there, but the strategy thus far has been to build up one or two reference sites so we can actually prove the technology does what we say it does in a working environment. That is the position we are at and now it is all about getting the potential converted into sales. We have gone on record as stating that the agreement we have with Rapiscan has a potential £2.5 million by the end of 2005, but this is of course dependent on the take up of the technology by the regulators who can be notoriously slow. With respect to the industrial side, we are at the stage where the objective is to get those reference sites in place. Up to this point, the industrial side has lagged behind the security sector, although it is very rapidly catching up because it relies a lot on the technology we developed for the security sector and we’ve therefore managed to bring that to the marketplace much more quickly. The key objective over the next six months in the industrial sector is really to get these key reference sites out there with blue-chip companies and then to push that technology out. Probably within the UK, we will continue supplying to end users directly for a while, but looking very rapidly for agents in places like the US and mainland Europe to help take that technology forward for us. The industrial sector is a much more fragmented market. In the security sector, there are four major players out there and that is it. In the industrial sector, if you look at the pharmaceuticals area alone, you are probably looking at least at ten players. Although even then we are really looking at the existing vision systems marketplace, because there is not really an established x-ray market able to achieve our performance. Again, one of the things that we offer in the industrial market and where we set ourselves aside is the speed at which we can achieve the inspection at the cost we can supply the equipment. Our systems are all designed for a 100% in-line inspection, typically eight to ten items per second maximum speed. So, it is quite fast industrial inspection.