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Security With Advanced Technology

In The Boardroom With...

Scott G. Sutton
President and Chief Executive Officer
Security With Advanced Technology, Inc.
Nasdaq:SWAT Thanks for joining us today, Scott. Please give us an overview of your background.

Scott G. Sutton: Thanks. I founded Vizer Group, a technology based security integrations firm in 2002 and Avurt International, which specializes in non-lethal weapons in January 2006. Security With Advanced Technology (SWAT) acquired Vizer Group and Avurt International in a reverse merger in December 2006. I was appointed president of SWAT as part of the reverse merger and was appointed as president and CEO of SWAT last month. Prior to founding Vizer and Avurt I worked in sales, public relations and operations management. SWAT is positioned with several interesting security related business units. Please give us an overview of SWAT solutions.

Scott G. Sutton: Yes, through our four business units we offer a well rounded portfolio of security products and services. Our four business units are Avurt International— which provides non-lethal personal protection devices, ShiftWatch— which provides mobile surveillance systems, Veritas Tactical— which provides training and tools for law enforcement and militaries, and Vizer Group— which provides facility security systems, access control and intrusion detection. Can you please describe your products and target markets?

Scott G. Sutton: Sure. We have recently announced several new products that we are very excited about.

We are getting ready to release the Avurt IM-5 at the end of second quarter. The Avurt IM-5 is a non-lethal personal protection device that shoots PAVA filled projectiles that break on impact causing a debilitating reaction strong enough to stop an attacker. We plan to market the IM-5 to consumers, campers and hikers, security guards, animal control officers, law enforcement, and delivery personnel.

We are very excited about this product and expect it to be very successful because it has many advantages over competitive products currently on the market such as Taser and pepper spray. For example, the IM-5 can stop an attacker from 40 feet away, whereas even the best pepper spray only has a range of 15 feet and Taser only has a range of 20 feet. Also, the IM-5’s projectiles are made with PAVA so it does not have a lot of the damaging side effects of OC pepper spray such as blistering of the eyes and esophagus. The IM-5 also has five shots, unlike Taser that only has one shot. We believe people who are going to buy a non-lethal personal protection device will likely choose an IM-5 because of these benefits.

Our Veritas Tactical business unit has recently been developing products for military and law enforcement. We recently announced the SafeMunitions weapon conversion unit and the VT-MKIV.

The SafeMunitions unit is a weapon conversion unit that turns a real firearm into a non-lethal training tool in seconds. We believe this will be very beneficial for force-on-force simulation training for military and law enforcement because it gives military and law enforcement the opportunity to practice with their own weapon, which is important so that the feel and trigger pull used in training is consistent with real life use. Competitive products are dangerous because real bullets can, and have accidentally been loaded and fired—there is no way a SafeMunitions unit can fire a real bullet. Current competitive products sold in the market today are also more expensive costing about 60 cents a shot; the SafeMunitions unit projectiles will be considerably less expensive, making this product a much safer and cheaper alternative for law enforcement and military training operations.

The VT-MKIV is a non-lethal launcher similar to the Avurt IM-5 for military and law enforcement, these launchers are propelled by compressed air or nitrogen and shoot a synthetic pepper-based projectile which breaks upon impact and has a debilitating effect on subjects. This powder substance is significantly stronger than the effect of pepper spray. The VT-MKIV gives users the ability to deliver non-lethal rounds accurately from distances up to 100 meters, providing military and law enforcement officers a tactical advantage in many control scenarios. We are experiencing significant interest in the VT-MKIV, from law enforcement and military groups, nationally and internationally. We expect to begin selling our first production units in May. Congratulations on your recent announcement that Veritas Tactical, completed an intensive training class on MAIC (Martial Arts Instructor Course) for the U.S. Marines at the Marine Corps Base Camp Pendleton. Without divulging any confidential information, can you tell us about this engagement and the future prospects for Veritas?

Scott G. Sutton: Thanks, working with the Marines is very exciting and we actually have a standing invitation from the Marines to go back and teach for the rest of the year. Our Veritas instructors will be going to Pedleton and teaching once and month for the rest of the year. Our trainers are also going to be teaching a women’s self defense class for credit at Concordia University in St. Paul, Minn., for the third year in a row. Veritas also plans to start offering self-defense classes to corporations. But, as mentioned earlier, the actual training classes are just one aspect of Veritas Tactical, we believe the training tools and law enforcement and military products such as SafeMunitions and the VT-MKIV have huge potential. May we have an overview of your management team?

Scott G. Sutton: Yes. I have always been under the belief as a manager and operator that success starts with building and maintaining top level talent. I believe I am working with one of the most talented and dedicated teams I have ever had the opportunity to work with. There have recently been some additions to the SWAT team. We announced that Greg Milan is the vice president of Sales; Greg has over 15 years of sales experience in the medical, Aerospace, Consumer and Industrial markets and has worked for Fortune 500 companies such as Johnson & Johnson and General Mills as well as small to mid-sized companies. We also announced that we hired Corey Holland as the director of our Technology Division, which houses Vizer Group and ShiftWatch, Corey has a background in operations, business development and sales and spent eight years at TimeCenter, Inc., a software development company, prior to joining SWAT. Ben Cook was appointed as the director of “Division X,” which houses Avurt and Veritas Tactical, Ben has over 10 years of experience in the firearms industry. These new team members combined with my existing team will be the key to the success of SWAT. Going forward, with your recent acquisitions and financing now completed, what are the key points you’d like to make about the future prospects of SWAT.

Scott G. Sutton: With the acquisitions SWAT has grown from a $1.5 billion market that specialized in mobile security to a $40 billion market with the additions of personal protection, training and facility security to our product and service portfolio. We are concentrating on making significant contributions to these market segments.

We are using the $5.2 million funding we just received to stay on track with our product development and launch plans for the Avurt launcher release, and we remain very excited and optimistic about the market reaction and acceptance for our initial launcher. We are also creating accessories for and additional variations of our initial design, for expanded revenue opportunities. With the pending release of the Avurt Launcher we are optimistic that revenues will begin to ramp up rapidly upon commencing shipments of our new products.