Given the size of the market there are hundreds of providers of marking systems. They can be roughly categorized into four quadrants along two axis: "permanent vs. not permanent" and "static vs. customizable". As a general rule, industry experts agree that the market will continue to move toward marks that are more permanent and more customizable. For instance, rather than a paper tag with the manufacturer?s name, a permanent id code containing specific information about that part, the day it was manufactured, etc. is preferred. In some cases, this move will be mandated by government for safety related parts (e.g. Tread Act), in some cases it will be recommended by manufacturing standards (ANSI, ISO), in some cases the decision will be purely economic (e.g. reduce inventory management costs). Within the relevant quadrant of "permanent and customizable" TherMark?s process has significant advantages over competitive products. It is generally higher resolution and higher contrast, it is generally more permanent, it is generally more resistant to various elements and environmental factors, it can be presented in multiple colors and it works on most materials including very sensitive materials. There are many applications where the combination of these factors makes TherMark the ONLY answer. Barriers to entry include the 26 US and related foreign patents, the current and future multi-national licensing agreements, decades of specific knowledge and IP beyond the patent portfolio and a significant headstart.

TherMark has two primary revenue sources: First, TherMark licenses rights to develop products covered by its patents to large multi-national companies. These companies pay $250,000 to $750,000 for initial R&D rights then pay ongoing royalties of 10-15% of their sales. The company has signed 3 such agreements (Ferro (www.ferro.com), Tesa (www.tesa.com), Merck (www.merck.com). Second, TherMark always retains the rights to sell any material it chooses to make itself OR which is manufactured by any licensing partner. Because TherMark is the world expert on the product, it has the opportinity to sell millions of dollars of recurring revenue product at very high margins - we will do this though distribution partnerships; several of which are in place or in negotiation. We believe that our current portfolio of patents safeguard our market position -- this has been well tested as TherMark won a large lawsuit whereby Ferro agreed to pay TherMark >$500,000 and future royalties on related materials. Other large multi-nationals appear to see TherMark?s patent portfolio as absolute. TherMark has a host of R&D opportunities to extend the suite of patents to new applications. This will be discussed in the presentation.