Markets
Industrial Market:
Powder Actuated Tools
In the construction industry, the speed with which buildings are constructed would be seriously impeded without the availability of the powder-actuated gun.
Also known as "direct fastening," this technology relies on a controlled explosion created by igniting a small, gunpowder charge, similar to the process that activates a firearm. Unlike firearms, however, most powder-actuated tools in use today are considered to be low-velocity, which means that the explosion of the charge does not act directly upon the fastener (as it does on the projectile in a firearm). Instead, powder-actuated tools employ a piston positioned between the firing chamber and the fastener that transfers the force of the explosion and strikes the head of the fastener. Generally speaking, a powder-actuated tool is considered to be low-velocity if the average test velocity of the fastener does not exceed 492 feet per second Manufacturers of powder-actuated tools and fasteners include Hilti, ITW, Powers, Ramset, Simpson and Remington, with Hilti owning approximately a 55%** share of the European market. Their share of the World market is not known, but it is estimated at around 50%.
**The Decision of the EEC Court of Justice records that Hilti' s share of sales of nail guns in the EEC is around 55%. As regards cartridge strips and nails generally, the Commission estimates that Hilti' s share of sales in the EEC is at least equal to its share for nail guns. According to the decision, Hilti' s shares of the EEC markets for Hilti-compatible nails and cartridge strips are larger than those which it holds in the markets for nails and cartridge strips generally
The total market for powered hand tools in the US is around $11 billion. Using some very simple calculations, the powder actuated tool market is estimated at between $250 Million and $350 Million, and the powder shot used with these fastening devices is estimated to have an annual US market value of some $125 Million.
U.S. POWDER ACTUATED FASTENER MARKET
| PRODUCT | VALUE |
| Powered Handtool Market | $11,000,000,000 |
| Powder Actuated Tools | $250 - $ 350,000,000 |
| Powder Actuated Toolshot | $125,000,000 |
Other Commercial Uses
Other commercial uses for explosive propellants include:
- shot for bird scaring ($10 - $15,000,000 in cartridge sales),
- lighting gas flares at oil wells ($3-5 million)
- specialty applications including signalling cartridges, starter-pistol powder, etc. ($15 - $20 Million).
On Earth, there is estimated to be approximately 650 million guns in the possession of both military forces and civilians. The international market for Usel technologies is vast. Information presented below, reflecting the magnitude of the potential market for this technology in the United States only, has been segregated into three categories:
U.S. Civilian Market
The quantity of ammunition consumed annually by the civilian and hunting market, approximately 5 billion rounds, far exceeds the US military consumption of approximately 1.6 billion rounds.
American Firearm, the professional gun retailers association, reports there are approximately 200 million firearms in the possession of approximately 60-65 million gun owners in the USA. In the early 1990's there were approximately 250,000 Federally Licensed Firearm Dealers. The US hunting association reports combined revenue between all states of approximately $550,000,000 annually in hunting license fees. Recreational shooting is a very large market for this technology as it provides hunters with greater accuracy, no residue in chamber or barrel (20,000 shots without cleaning), cheaper ammo, half the weight, and no brass casing issues. The US civilian market includes the purchase of approximately 3 million guns per year.
U.S. Law Enforcement
There are currently over 18,000 Law Enforcement Agencies in the USA . The marketing skills developed by selling to the Military will transfer to the expansion into the Law Enforcement market. Statistics detailing the number of rounds consumed per year are about 400 Million.
U.S. Military
General Dynamics has recently been awarded a five-year contract to supply small-caliber ammunition to the U.S. armed forces. The award for the contract is $171 million for approximately 300 million rounds. The total contract potential value is approximately $1.2 billion for 2.1 billion rounds over five years (400-500 million rounds per year). This contract represents approximately 20% of the $1 billion annual U.S. market for small caliber ammo {.223cal (5.56mm), .308cal (7.62mm), and .50 cal (12.5mm)}. General Dynamics is filing emergency small-caliber ammunition orders with a team of domestic and international partners to meet the U.S. government growing demands. This quick response will equate to approximately 500 million rounds per year. This team supporting General Dynamics Ordnance includes Olin Corporation's Winchester Division; SNC Technologies Inc. of Canada ; Israel Military Industries Ltd. (IMI); General Dynamics Santa Barbara Systems in Madrid, Spain. The US Department of Defense has stockpiled approximately $80 billion worth of ammunition. This is equivalent to approximately 3 million tons taking up to approximately 38 million square feet of storage space. The cost of warehousing and handling this stockpile is estimated to be approximately $80 million per year.
Large Caliber
A detailed examination of currently available literature on solid propellants used with large caliber guns, including the 16” 127mm/54 caliber guns of the U.S. Navy, shows no reason why Usel-designed propellants wouldn’t be a suitable or better replacement. Imagine the Navy being able to replace the propellant bags used in its largest guns with solid, cylindrical-shaped Usel-designed propellants - complete with built-in and recessed handles for easier carrying.
Other Military Devices
The US Military uses a number of other explosive devices which necessarily contain some kind of solid propellant. The items listed in the table below have been identified as having explosive propellants similar to Usel-designed propellants.
2007 BUDGET
| SERVICE | GUN TYPE & CALIBER | VALUE |
| ARMY | SIGNALS, ALL TYPES | $26,384,000 |
| ARMY | SIMULATORS, ALL TYPES | $10,791,000 |
| ARMY | NON-LETHAL AMMUNITION, ALL TYPES | $30,089,000 |
| SUB-TOTAL | $67,264,000 | |
| NAVY | PYROTECHNIC AND DEMOLITION | $9,189,000 |
| NAVY | MARINE CORPS NON LETHALS | $4,030,000 |
| SUB-TOTAL | $13,219,000 | |
| AF | FLARES | $161,958,000 |
| TOTAL | $242,441,000 |
Marketing Strategy
Caseless Technology's military marketing strategy is two-fold. First, CT plans to do live demonstrations directly to the U.S. military. CT plans to schedule these demonstrations through the various military and political contacts it has within the U.S. military. Caseless Technology plans to demonstrate the superior performance that its caseless ammunition has over conventional ammunition and its economic and environmental advantages. After securing U.S. military support, CT plans to strategically align itself with current conventional ammunition producers by licensing its technology to these companies rather than attempting to enter the ammunition market directly.
For international militaries, CT will sell exclusive territorial rights directly to its strategic partners or directly to acceptable international arms manufacturers located abroad rather than attempting to enter the international market directly.
After a successful program is in place for sales to the U.S. military, CT plans to license its technology to a well-established brokerage, marketing or firearms company familiar with the ammunition industry and the intricacies of the Law Enforcement market sector to carry out the sales program. One ideal partner in this sector is Glock, Inc.
CT also plans to market to the civilian market either through its strategic partners or directly through trade shows, trade publications and other media outlets.
In all cases listed above, Caseless Technology will manufacture the primer in house and sell it to its licensees for inclusion in the final product.
Exit Strategy for Investors
Two exit strategies exist for investors
Initial Public Offering within 3-5 years of operations
Caseless technology plans to form a subsidiary that will have a license to market worldwide the caseless ammunition technology. The shares of the subsidiary will be listed on a public exchange through an IPO. CT will either buy back the shares from existing shareholders or distribute the subsidiary shares to existing shareholders in exchange for their CT shares.
Acquisition Merger with a Private or Public company
Several ammunition companies have tried to perfect caseless technology in the past and have failed. Value has been created through CT's ability to create a caseless ammunition product that has overcome issues that have plagued it in the past. This makes CT an attractive purchase for either a private or public ammunition company.