Electric & Gas Technology – serving the electric, gas utilities since 1985 and now introducing their latest product to the world: the WaterMaker™

Technology
Products for the electric and gas utilities and specialized water systems
OTC BB: ELGT

Electric & Gas Technology, Inc.

13636 Neutron Rd.
Dallas, TX 75244-4410
Phone: 972-934-8797
Fax: 972-991-3265

S. Mort Zimmerman
Chairman, President and
Chief Executive Officer

 Interview conducted by:
Walter Banks, Co-Publisher

CEOCFOinterviews.com
August 2001

BIO OF CEO

S. Mort Zimmerman:  Mr. Zimmerman is Chairman of the Board, President and Chief Executive Officer of the Company since its formation in March 1985.  After attending Georgia Institute of Technology and Oglethorpe, Mr. Zimmerman graduated in 1958 with a Bachelor of Science in Electrical Engineering from Pacific International University.  He established the first electronics subsidiary for the predecessor corporation of LTV Corporation, which was formed to market a low cost television camera invented by Zimmerman and for which he was awarded a United States Patent in 1958.  Prior to 1963, he participated in the engineering and installation of 18 television stations.

In 1965, Mr. Zimmerman formed the first "one-bank holding company" of its kind in the United States and which later served as a model from which many bank holding companies were formed.  He served as Chairman of the Board of four individual banking institutions, three of which were located in Florida (Springs National of Tampa, Metropolitan of Miami and Mercantile National of Miami Beach) and New York City (Underwriters Trust).  After obtaining a public underwriting these banks were sold to others.  In 1967 Intercontinental Industries, Inc. was organized and Mr. Zimmerman served as its Chairman and Chief Executive Officer.  This diversified holding company was primarily engaged in the operations of Intercontinental Manufacturing Company, a weapons manufacturer that was later sold.  Through his research and development in the field of video X-ray and imaging, Mr. Zimmerman caused the organization of Video Science Technology, Inc. in 1981 to exploit the inventions for which he was awarded two U. S. Patents.  Patents awarded include: Television Camera-Video Amplifier and Blanking Circuits-1958, Electronic Thermometer-1963, Video-X-Ray Imaging System and Method-1977, Video System and Method for Presentation and Reproduction of X-Ray Film Images-1977, Electromagnetic Radio Frequency Excited Explosion Proof Lighting Method and System-1986, and Laser Display of an Electronically Generated Image Signal-1987.  Recently, Mr. Zimmerman participated as a co-inventor on new Electronic Refrigeration technology to which patents are pending.

About Electric & Gas Technology, Inc.



The WaterMaker^TM

Electric & Gas Technology designs and manufactures products for the electric and natural gas utilities through three divisions. Their subsidiary in Toronto, Canada, Hydel Enterprises, Inc. manufactures electric meters sockets, and their subsidiary in Dallas, Texas, the Reynolds Equipment Company in the Dallas, Texas, manufactures measurement and odorization systems for the natural gas industry.

Through our third subsidiary Atmospheric & Magnetics Technology, Inc. (AMT), also in Dallas, Texas, we manufacture the WaterMaker^TM. . This product is a water fountain that produces its own purified, refrigerated drinking water derived from the atmosphere air we breathe with no connection to any water source and with no typical bottled water requirement!

The WaterMaker completes Mother Nature's Natural Distillation Process, and provides an abundance of healthy, clean drinking water before it has been exposed to earthly contaminants. This sets the WaterMaker apart from municipalities, filtering, and bottled water suppliers who merely provide a more drinkable variation of polluted water, by attempting to remove or neutralize the hundreds of chemicals, micro-organisms and particulate in other water sources.

The WaterMaker's Patented Technology finishes what Mother Nature's Evaporation System begins by capturing Her distilled H2O vapor in a sanitary environment before it liquefies and has an opportunity to become polluted. Our H2O D.I. unit passes 600 cubic feet of air per minute through a 1" spun polyester filter, which separates and holds suspended contaminates from the air. This process creates a clean air environment from which our technology extracts the distilled water vapor, converting it into crystal clear drinking water, the way Mother Nature intended it to be!

CEOCFOinterviews - Mr.Zimmerman, can you give us a brief history of Electric & Gas Technology?

Mr. Zimmerman: "The Company started in l985 and went public in l986, primarily manufacturing products for the electric and natural gas utilities, and later we started making water systems. That divided our company into three business segments, electric, gas and water. E&GT is a very technically oriented enterprise. Our subsidiary in Toronto, Canada, Hydel Enterprises, Inc. manufactures the electric meters sockets that installs on the side of your house. Another subsidiary, Reynolds Equipment Company in the Dallas area manufactures measurement and odorizations systems for the natural gas industry. Natural gas does not have an odor and that company makes special equipment that puts an odor into gas. Therefore, if you have a leak, you can smell it. Reynolds Equipment Company recently received a contract from Niagara Mohawk Power for development of a new BTU meter. A very important product needed by the gas industry, and it is now being tested and will sell at a price substantially lower than existing competition now being used to measure BTUs.

The third area of our business is our water systems. We recently have designed and received US patents on our water maker, which we call the “infinite fountain of pure water”. The water processor comes from our third subsidiary, Atmospheric and Magnetics Technology, Inc. It is a very nice product that derives, from the air that you breath, about five gallons per day of healthy, pure drinking water by the process of dehumidification, filtering and purification using only one source of power, electricity. Moreover, we have systems that produce much more than five gallons of water a day. We have systems that make 60, 100, and even 10,000 gallons a day, there is no limit. The point is, there is probably more than 1,000 trillion gallons of water in the atmosphere around the Earth, and our product allows us to tap into that source.

When we designed that system, it attracted interest from all over the world. We have just shipped a unit that will produce 50 gallon per day to Saudi Arabia. They are very excited about it and we are preparing more units for them. We also recently shipped out two units that work with a diesel powered electric generator with a fifty gallon tank, and a system that can be driven anywhere and produce drinking water. Not long ago we signed a most important contract with a business group from Pakistan, a country known for a very poor, very contaminated drinking water. In Karachi, the capital, a very large city with more than 9 million population, there is a tremendous need for good drinking water. Our proposal is to install ten systems throughout the city of Karachi, each producing ten thousand gallons of drinking water per day, which gives you a hundred thousand gallons per day throughout the city and on a monthly basis three million gallons, which is more than 11 million liters per month. The people will come to these locations with plastic bottles to fill them with good drinking water. The important thing about this contract is that is it conditioned on getting foreign aid for humanitarian purposes. We are counting on the United Stated for some of that aid, and there is nothing more humanitarian right now than the need for pure drinking water. It is a problem all over the world."

CEOCFOinterviews – Do you have other international customers?

Mr. Zimmerman: "We are preparing transaction proposals with Egypt, Morocco, United Arab Emirates, Indonesia, Philippines and others. Water is becoming the most important commodity around the globe. It is terrible what is happening for instance in India, where women take their buckets to the Ganges river, bringing the buckets back to their huts, let it settle and then think that it is safe to drink. It is killing people. This is why we are so very excited about our product and are pushing it as hard as we can."

CEOCFOinterviews - How do you sell and market your water making systems?

Mr. Zimmerman: "We have sales representatives in the U.S. and in various foreign countries, and our sales program is directed to governments. Our program is to start the excitement by having a particular country agree to buy the hundred gallons per day unit for a proof of performance period of time.  When the time period ends, we look for the relationship to develop into a distributorship for many more units.”

CEOCFOInterviews – With regards to your water maker, do you see your greatest revenue coming from the United States or foreign countries?

Mr. Zimmerman: "With our water making system we see our largest revenues coming from foreign countries, because of the tremendous problem with water contamination in foreign countries.  Water resources are pretty good in this country, although there is a looming shortage ahead. Here our competition is bottled water and other purification systems. This year we have been pouring money into the water system; therefore, in the fiscal year 2001 we will probably show a loss. But like with everything else, you have to spend money to try to get this program running."

CEOCFOinterviews - What do you feel you must do to get the water maker to the next level?

Mr. Zimmerman: "It starts with our pending contract for the units we are currently selling. For instance, we have sold 120,000 dollars worth of equipment to Abu Dabi, and we were paid in advance. Units were shipped and there was a good profit there. However, the real profit will begin when we turn that customer into a distributor, and as we continue this is going to result in selling more and bigger units. To extend a 100,000-dollar system to a multi million-dollar possibility upon proof of performance is really showing them that they really are saving electricity and getting plenty of crystal clear water. Most people think this “infinite fountain of pure water” is a miracle."

CEOCFOinterviews - Are there any other revenue possibilities that could result form the sale of your water maker? 

Mr. Zimmerman: "We also generate revenue through the requirements of purchases. If, for instance Saudi Arabia is considering a distributorship and they want to also assemble some of the parts, we would have a requirement that they buy at least a 5 million worth of product per year."

CEOCFOinterviews - Which of your other two divisions is currently producing the most revenue?  

Mr. Zimmerman: "The electric company, Hydel Enterprises, Inc. However, once the BTU meter starts going, it should bolster revenues for our Reynolds Equipment Company."

CEOCFOinterviews - How big is that market for your BTU meter.

Mr. Zimmerman: "BTU meter market is a big one. It can be 2-3 hundred million dollars."

CEOCFOinterviews - What is your competition in that market?

Mr. Zimmerman: "There are several companies who sell meters for about a thirty-five thousand dollar level. I think we will be closer to thirty-five hundred dollars. Our patented product, the BTU meter is a real break-through. "

CEOCFOinterviews – What gives your company a competitive edge?

Mr. Zimmerman: We are working very hard; we have a very low overhead, because we are not big spenders, and we have about 6 US patents since founding the company. We also have in our parent company several projects going which we hope to announce in the near future. One is producing electric power from hydrogen peroxide on which we have a patent pending."

CEOCFOinterviews – How close to the market are you with the product for producing electric power from hydrogen peroxide.

Mr. Zimmerman: "Right now we have a five kilowatt unit that works. We want to raise money to produce one megawatt from hydrogen peroxide, which is nothing but water and air. We will probably have to raise a lot of money to get the attention of the utilities. With the electric power shortages all over the country, this project is very timely...We hope to put a product on the market within the next 6-12 months, depending on obtaining financing."

CEOCFOinterviews – When do you see a turn for profitability?

Mr. Zimmerman: "This year, July 31st, we will probably show a loss, because we can not recover our investments that fast. However, we think that as for 2002 which starts July 31st 2001, we should be profitable... The foreign countries really are getting humanitarian aid or procuring moneys on their own for their water needs. That is a great boost for our company. There is nothing in the world like those larger WaterMarkerä units of ours. A world wide application is for the military, which wants our water maker for their portable vehicles to have good drinking water."

CEOCFOinterviews – Can you tell us where your company stands on it’s exchange listing?

Mr. Zimmerman: “We have been on NASDAQ since l986, and we have paid our dues and always have our finances in compliance. When the stock market went down our stock dropped below a dollar. That caused them to de-list us. Therefore, we reversed split our stock, three for four from 8.3 million shares to 6.2 million with the idea that we will be re-listed. Unbelievably our stock then started trading $1.35, $1.25, begun moving up and closing prices were over a dollar. Yet, the bid prices were down below dollar. Three days after the first split NASDAQ de-listed us. We are on OTC now and may apply to American or Chicago Stock exchanges. As we all know, the market is crazy right now and it is hard to predict from where the sponsorship is going to come. However, we are in for the long haul.”

CEOCFOinterviews - In closing what would you like to say to your current shareholders and potential investors?

Mr. Zimmerman: "First of all, thank you for investing. Secondly, look at us for a long haul not for a quick trip. When a stock is as low as ours, people do day-trading. They buy at 80 cents and sell at a dollar. It is ridiculous. I want you to go for the long-term with us. Moreover, we have some good products and are ahead of the game. We make our mark based on fundamentals not just on a lot of wild hope."