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Castle Point Scientific, LLC
Business Description
Castle
Point Scientific, LLC (CPS) is a Technogenesis™ company
formed at Stevens Institute of Technology by the office of
University Research and Enterprise Development. The company’s
mission is to commercialize technology developed at Stevens
for next-generation fiber optic based ultra sensitive sensing
systems. There is a growing demand for such systems, especially in
China, where CPS has an existing customer base, business
relationships and R&D contracts.
CPS’s
intends to exploit existing business opportunities in the U.S.
homeland security market and in the rapidly growing Chinese market
by utilizing superior sensor technology, low-cost manufacturing
facilities and sales into a protected market in which CPS has
strong government and customer relationships.
Management
The
core team is in place with the CEO, CTO, CFO, and key engineering
and sales/marketing positions filled by experienced managers and
engineers from Tyco-AMP, KPMG, JDS Uniphase, Solectron, and Sondex
Geophysical Equipment. CPS’s location at the center of the
east coast optoelectronics industry and its association with
Stevens Institute of Technology, one of the leading technological
universities in the country, will allow CPS to rapidly add
talented and qualified people as needed.
History
CPS,
a Limited Liability Corporation (LLC), was formed in July 2005 by
the Office of University Research and Enterprise
Development (UR&ED) along
with the technology inventor, Prof. Hong-Liang Cui. CPS is a
Stevens Technogenesis® company. In addition to successfully licensing intellectual
property and launching start up companies, Stevens has had several
successful liquidity events such as the sale of two of its
Technogenesis start ups, Hydroglobe and PlasmaSol, to major
corporations.
Over the last two years, CPS
prototypes of perimeter defense systems have been developed for
and tested by the U.S. Army at Ft. Dix, NJ and Eglin Air Force
Base, FL with performance that exceeds that of existing systems by
over 30%. CPS sensor systems for oil exploration and bridge
structural integrity have been tested by Chinese customers with
superior results.
Technology Background
CPS
obtains its superior sensor performance through its patent pending
technology which enables ultra sensitive optical sensors with
superior performance achieved by using:
- Fiber Bragg Gratings (FBG) – optical devices that detect mechanical strain
- An array of FBG’s, together with its spatial arrangements, provide the improved sensitivity.
- Vibrations caused by movement of people or vehicles will place a strain on FBG causing the light passing through to undergo a shift in wavelength.
- This shift is proportional to the size of the vibration and indicates small frequency changes to accurately determine the cause of the strain – person, vehicle or animal.
Compared
to conventional electronic and electromechanical sensors, CPS
sensors are faster, more sensitive and have wider bandwidth, while
being smaller and lighter. Being photonic devices made of
dielectric glass or plastic materials, they are electrically
passive and immune to electromagnetic fields (EMI & RFI).
Because they do not generate heat or sparks, they can be used
safely in hazardous environments, such as oil fields and
refineries, mines and chemical plants. In addition, glass fibers
do not lose their performance in corrosive environments or at
temperatures over 1200° F. This technology can be used to measure strain, temperature,
pressure, angular rotation, speed, acceleration and vibration.
The
technology has a diversity of applications: to measure strain in
bridges, tunnels, wind generator blades, high-rise buildings and
other structures, oil exploration and well monitoring. The same
technology provides sensing systems for security and
counter-terrorism applications to detect and characterize
intruders or the approach of
military equipment.
The Market Opportunity
The
Company has initially selected three markets in China and one in
the U.S. that will have high demand for fiber-optic-based sensing
systems: oil exploration and production, mine safety and vehicular
tunnels in China, and perimeter security & defense in the U.S.
- The oil industry today and for the near future is expected to have limited reserves, limited production capability, and rapidly growing demand - especially in China. The Chinese government is aggressively exploring and developing its country’s oil and gas resources and is acquiring oil and gas resources outside of the country, e.g., CNOOC’s recent bid for Unocal and acquisition of a stake in a Nigerian oil and gas field. In 2003, the worldwide market for fiber-optic permanent well monitoring grew to $200M, and is expected to exceed $500M by 2007. In addition, geophysical equipment for exploration is presently a $500M segment of the $5.8B geophysical services market.
- China is still very dependent on coal as a primary energy source, mostly extracted from its 26,000 underground mines. Unfortunately, there are frequent Chinese coal mine accidents, with 2,700 miners killed in the first half of this year. CPS is currently establishing an OEM partnership with the Chongqing Coal Mine Safety Research Institute, the main provider of methane sensors for coalmines. The Chinese government plans to spend $375M for safety improvements in state-owned mines and to impose a fee of $1.25 per ton of coal produced to fund new initiatives to improve mine safety. One of the largest state-owned coal mines is interested in strategic investment in CPS
- As highway and rail systems grow rapidly in China, the government is concerned about fires in its 8,600 auto and train tunnels. Here, long temperature sensing arrays are used to monitor the entire length of a tunnel. This is particularly important, because without adequate temperature sensing, the accumulation of dense smoke makes it very difficult to determine the location of a fire. The Chinese government now requires the installation of temperature sensors in all vehicle tunnels. CPS is already selling a first-generation product in this market.
- In the U.S., concern about security and terrorism has increased the need for more effective perimeter defense systems. The CPS Senor Systems, provide higher levels of sensitivity, selectivity and invulnerability. These systems will protect high-risk facilities such as chemical and oil refineries, tank farms, nuclear power plants and military facilities. Prof. Cui has recently completed a Phase II SBIR study for the U.S. Army and has proposed a two-year, $1.7M, Phase III follow-on contract for production units. Additional U.S. government funding is anticipated. With respect to commercial applications, a major U.S. oil companies is interested in installing a CPS perimeter defense system.
Competition
The
four major oil services companies, Schlumberger, Halliburton,
Baker Hughes and Weatherford have spent over $300M in the past
three years to acquire or invest in optical sensor companies,
providing both competition and an exit opportunity for CPS. The
acquired companies include Sensa, Pruett, Prime Photonics, Luna
Energy, CiDRA and OptoPlan.
However,
Chinese oil companies do not employ oil services companies and
instead develop technology and services internally. Not having
major oil service companies as competitors in the Chinese market
benefits CPS, who already has a strong relationship with one of
the three Chinese oil companies. Existing competitors in the
Chinese coal mine and tunnel markets are very small “garage
shop” enterprises.
Competing
perimeter defense system suppliers include the U.S. companies
General Dynamics and L-3 Communications, and the Israeli companies
EORD and Magal Security Systems. Competition in this market is
scattered, because perimeter defense systems are customized. The
U.S. Army holds CPS in high regard, and this reputation has
started to spread to other perimeter defense/monitoring customers.
Barriers to Entry
CPS holds patent pending technology, significant in-house
knowledge of the technology, leading experts in optics, sensors
and monitoring systems, and a significant investment in research
and development over a multiyear period with completed field
testing that supports the superiority of its sensors.
| Financial Projections (dollars in thousands) | | | | | From Receipt of Funding | Year 1 | Year 2 | Year 3 | | Sales Revenue | 1,680 | 4,750 | 16,500 | | EBITDA | (965) | (496) | 4,854 |
Management Team
Louis P. Wagman
-President, CEO
Hong-Liang Cui
Chief Technology Officer
David Ya Li
-Exec VP Operations
Hao Zhao
-VP Sales
Frank Joworisak
-CFO
Board of Directors
Hong-Liang
Cui
-Chief
Technology Officer
Castle
Point Scientific
Louis P.
Wagman
-President,
CEO
Castle
Point Scientific
Dr. Vice President
Helena S. Wisniewski
-
University
Research & Enterprise Development
Stevens
Institute of Technology
Industry
- Security and Surveillance
- Fiber optic sensing systems
- Oil/Gas service
- Underground coal mining
- Transportation infrastructure
Company Resources
Dedicated
management team led by
serial entrepreneur, existing
business relationships, patents &
four patents pending, support from Stevens Institute of
Technology, UR&ED.
Type of Financing Sought
$4.0M
angel/institutional
Use of Funds
Initial funds will be used to establish
offices and labs, to complete product development, to
complete staffing and to establish key customer relationships.
Professional Services
Export
Licensing - Wilmer Cutler
Pickering Hale and Dorr,
Wash., DC
General Counsel – McCarter & English, Newark, N.J.
Patents – Licata & Tyrell, Marlton, NJ
Castle
Point Scientific, LLC
Castle
Point on Hudson
13th Floor Howe Building
Hoboken,
NJ 07030-5991
CEO - Mr.
Lou Wagman
609-688-9252
lwagman@patmedia.net
or Dr. Helena Wisniewski
hwisniew@stevens.edu
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Established in 1870, Stevens offers baccalaureate, masters and doctoral degrees in engineering, science, computer science, management and technology management, as well as a baccalaureate in the humanities and liberal arts, and in business and technology. The university has enrollments of approximately 1,780 undergraduates and 2,700 graduate students, and a current enrollment of 2,250 online-learning students worldwide.
Additional information may be obtained from its web page at http://www.stevens.edu/.
For the latest news about Stevens, please visit Stevens News Service.
For more information contact:
Patrick A. Berzinski
pberzins@stevens.edu
201-216-5687
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