Corporate Profile (AMEX: CTT) (52 Wk: 2 13/16 – 9)
		Unlocking the potential of innovationÒ
		July 1999

The Company

Competitive Technologies, Inc. (CTT) is a world leader in technology commercialization. CTT’s focus is to identify, patent, license, and commercialize technologies from corporations, universities, and early start-ups. With experience in managing, developing and commercializing technology, CTT is able to identify promising technologies and shepherd them through development to provide solutions to today’s business and health problems.

Technology Commercialization Industry

The technology commercialization industry is a highly specialized business committed to the identification, development and commercialization of new and useful technologies. Often such technologies exist only on paper or in the minds of the inventors. Other times technologies have been reduced to practice or prototypes have been made demonstrating the usefulness of the product but development often stops there due to lack of funding or proper management to facilitate further development and investment capital.

Traditionally there has been a gap between the inventive process, whether at the university level or corporate level, and a commercially viable product. CTT provides a bridge over that gap to bring new, useful products to market. By doing so, CTT adds value to each technology by enabling realizable gain. CTT shares in that gain by taking an equity interest in each technology payable in the form of royalties received from the license and future sale of products embodying the particular technology.

Competition

There are very few technology commercialization and development companies which are publicly held and therefore allow the investor an opportunity to invest in a diversified portfolio of technologies. CTT differs from the majority of the organizations and companies in that its primary goal is to optimize technologies for the purpose of maximizing shareholder benefit. The technology commercialization industry is a highly specialized business. It is also highly fragmented with over 140 organizations and companies performing some aspect of technology transfer. Many universities and research centers have implemented some technology transfer services and there are a small number of private organizations also claiming to provide similar services.

Strategy

Competitive Technologies is developing global business opportunities and shareholder value from all areas of technology commercialization, intellectual property management and new venture development.

CTT’s objective is to optimize and realize the potential value of its client’s technology portfolios. CTT provides the services of licensing and enforcing intellectual property rights, structuring business arrangements (e.g. forming joint ventures and start-up companies), and obtaining investment financing. CTT’s world class team of professionals with diverse technical, legal, intellectual property, financial, market and business expertise provides clients a complete range of technology commercialization services.

CTT has embarked on a new investor relations and public relations program. CTT believes its growth potential will benefit its shareholders and that by gaining exposure to the investment community, CTT will increase the value of their share holdings.

The Company has a focused program to increase its digital technology portfolio as it continues to grow its established life sciences and physical sciences portfolios. We believe digital technologies presents a bright future for CTT as demonstrated by the recent success in licensing our public-key encryption technology. Digital technologies have a much shorter development life cycle and can produce revenues much more quickly, unlike many life sciences technologies.

Alliances

CTT operates in a global business environment and, in order to extend its reach, has established strategic alliances with the following organizations:

Europe – ANGLE Technology Limited, Scotland, Guilford-Surrey. ANGLE Technology is a venture management company specializing in the formation and development of high technology-based businesses. ANGLE Technology provides strategic advice to governments and economic development agencies on the commercialization of technology; manage infrastructure projects such as research parks and incubator units; and establish, and work directly with, new technology-based businesses committed to a program of innovation and high growth.

Pacific Rim/Asia – Innovation Partners International, Inc., Osaka, Japan. IPI is an international consulting company offering services in the areas of technology transfer, innovation management and hi-tech business development between Japanese and overseas organizations. IPI is unique because of its in-depth knowledge of the Japanese market coupled with an awareness of the best international research and technology available. As well as close strategic partners in the USA, Europe and Japan, IPI has an international network of over 10,000 contacts which deal in research, technology exchange and innovation. It is also supported by a worldwide network of scientific and technical experts who advise IPI and its partners in technical and specialist areas.

U.S.A. – REFAC, Edgewater, New Jersey. REFAC is a full service intellectual property marketing organization and a leading developer of consumer products, medical devices and business equipment. The Company’s expertise centers on its ability to maximize the earning potential of intellectual property rights through creative licensing strategies, enterprising brand extension ventures, and entrepreneurial product design/engineering programs.

Successes

CTT has successfully licensed more than 450 technologies to over 300 individual organizations. Since its inception, these licenses have generated approximately $27 million in retained royalties to CTT. At the present time we have approximately 115 licenses in place, 60 of those generated revenue in fiscal 1998 of $2.6 million and about $2.6 million during the first 3 quarters of fiscal 1999. Some of these successes include plasma display monitors, vitamin B₁₂ assay, Ethyolä , gene sequencing machine, gallium arsenide semiconductors, and Renovaä .

CTT currently has more than 50 clients including such renowned research companies as Lucent Technologies and Monsanto Co., as well as education institutions like the University of Illinois and the University of Pennsylvania. Of the more than 80 customers now using CTT licensed technologies, a few representative customers include major electronic companies like SONY, Mitsubishi Electric Corporation and Matsushita Electric Industrial and major biological companies like Abbott Laboratories and Roche Molecular Systems, Inc.

Some examples of CTT’s successes are:

Start-Up

CTT supported the development of a distance learning technology by founding NovaNET Learning, Inc. Through CTT funding and an initial private placement orchestrated by current CTT president, Frank McPike, Jr., more than four million dollars were raised to launch this company. Due to the company’s success, CTT has received approximately $5.5 million by selling its ownership interest in two parts. The first in 1995 for approximately $3 million and the second in 1999 for about $2.5 million. These sales represent CTT’s ability to profit from its business objectives.

NovaNET was founded on the concept of "distance learning" and provides interactive, on-line curriculum containing more then 10,000 hours of fully interactive, self-paced curriculum for basic skills in reading, writing and mathematics, ESL (English as a Second Language), GED preparation, middle and high school subjects, school-to-work, advanced placement and SAT/ACT preparation. The curriculum may be fully customized and is aligned with numerous state and national standards and assessments. NovaNET is an integrated system providing direct links to Internet resources that enrich the curriculum, and a suite of online tools to facilitate learning and interaction with the national NovaNET community.

NovaNET was acquired by National Computer Systems, Inc. a global information services company which provides software, services and systems for the collection, management, and interpretation of data.

Corporate

In April of 1999, Competitive Technologies announced the delivery of encryption software to SONY Corporation. CTT had previously licensed technology belonging to its client NTRU Cryptosystems Inc. to Sony Corporation of America. Sony America is a wholly owned subsidiary of the Japanese electronics and entertainment company Sony Corporation. As part of its specialized services, CTT helped transform the original NTRU encryption and authentication concept from scientific white paper to market-ready technology, and then orchestrated the investment and licensing arrangement.

Another CTT licensee, Tao Group Ltd. of the United Kingdom, developed the software for delivery to SONY as well as for further commercial sale. Through the concerted efforts of CTT, an export license was obtained despite the very strict regulations governing the export of encryption technology by the U.S. Commerce Department. The export of the technology enabled the development of the software outside of the U.S. and therefore paved the way for further licensing.

This technology delivers significant advantages for Internet applications and electronic devices that use "real-time" technology like Internet telephony, and video and audio streaming. Mobile phones, smart cards and personal digital assistants (PDAs), devices that use "embedded" chip sets also benefit. According to a recent study by Data Monitor, the annual worldwide Internet security market alone will hit $7 billion by the year 2001.

University

CTT enabled the realization of several million dollars in royalties through the successful licensing of a technology from its client, the University of Colorado, for measuring levels of vitamin B₁₂.

This technology has been successfully licensed to the industry including such companies as Abbott Laboratories, Bayer Corporation, Bio-Rad and others. Over the term of its licensing efforts, CTT has enforced the patents protecting the Vitamin B₁₂ assay several times. The enforcement actions all resulted in favorable findings for CTT and each opposing party took a license under the appropriate patents.

Sample Current Revenue Generators

Current High Profile Technologies

• Homocysteine Assays. CTT holds the patent on a test for a new indicator of coronary artery disease called homocysteine. Coronary artery disease accounts for approximately 40% of all deaths in the U.S. The potential market for this test has been estimated to reach levels of cholesterol testing which are approximately 125 million tests per year in the U.S. Homocysteine tests currently average about $49.00.

Homocysteine has also been reported to be associated with other common diseases such as Alzheimer’s disease, arthritis, and certain birth defects.

CTT currently has an aggressive licensing program underway, including the recent filing of suit against a large commercial laboratory which CTT believes in infringing its patent.

• Plasma Display Panel Energy Recovery Circuit. This technology provides a more cost efficient way to manufacture and operate large (42" and above) screen televisions which are only 3 ½ inches thick. This circuit also allows manufacturers to comply with current FCC emission requirements. "The energy recovery sustain circuit is used in all the world’s 42 inch and larger color plasma display products," said Shigeo Mikoshiba, professor at the University of Electro-Communications and an associate editor of the Journal of Society for Information Display. The flat plasma panel market is expected to grow from $200 million (1998) to $4.7 billion (2004). CTT is positioning itself to collect royalties on each plasma display panel using the energy recovery circuit sold in the U.S., Japan and Europe.

• Public Key Encryption. This fully scalable, low power method of encrypting digital transmissions is ideal for use on the Internet, e-commerce, telecommunications and smart-cards. The encryption of data is of highest priority if digital commerce is to become a reality. This novel method of encrypting digital data is a fast and efficient new technology which requires lower memory and processor speed in comparison with the two leaders in this area: RSA and Certicom. It is the first commercially viable encryption technology not based on factorization or discrete logarithms, which require the use of extremely large integers or complex structures. The market for e-commerce security and Internet security is expected to hit $7 billion annually by 2002. CTT’s income from this technology will be in the form of royalties based on sales of products and other licensing fees.

• Gallium Arsenide Laser Diode. The laser diode technology represented by CTT offers an enhanced, more durable, and more reliable laser needed for DVD-RAM drives and other optical storage devices. This technology will allow the burgeoning laser diode industry to benefit from efficient manufacture of laser diodes exhibiting enhanced performance and durability for use in DVD-RAM devices and other optical storage equipment. Market growth for DVD-RAM drives worldwide is expected to grow from 200,000 units in 1998 to 9 million units in the year 2000. Drives for DVD-RAM have begun making their appearance at retail outlets for as little as $500. CTT is currently experiencing an increase in royalties generated from its licensees, including Mitsubishi Electric Corp., and we expect that trend to continue as the DVD-RAM market grows.

• Erectile Dysfunction Therapeutic. This new therapeutic compound, originally discovered at the University of Arizona, has been demonstrated to be useful in diagnosing and treating male and female impotence. CTT licensee Palatin Technologies, Inc. (NASDQ: PLTN) has joined with Theratech, Inc. (a wholly owned subsidiary of Watson Pharmaceuticals, Inc., NYSE: WPI) to develop an oral delivery product for Erectideä , the initial product name for the erectile dysfunction therapeutic. The compounds have also been featured recently in Time magazine and CNN. In addition, it has been suggested that other uses for the compounds may include sunless tanning. Sales for the major therapeutic in this field are projected to increase from $880 million in 1998 to $4 billion in 2008.

• Ribozymes. Dr. Thomas Cech of the University of Colorado received the Nobel Prize for his invention of Ribozymes which act like molecular scissors in fighting and diagnosis of various diseases. CTT’s licensee, Ribozyme Pharmaceuticals, Inc. (NASDQ: RZYM), currently has human health products in development in the areas of AIDS, cardiovascular disease, cancer, and Hepatitis C using this technology. RZYM has announced five strategic collaborative partnerships to develop products for specific therapeutic targets. Partners include: Chiron Corp. (NASDQ: CHIR), Parke-Davis Division of Warner Lambert (NYSE: WLA), DowElanco and Schering, AG. Recently, RZYM reported that its ribozyme based therapeutic for cancer was successfully taken through Phase 1a and is slated to begin the next round of clinical studies in the next 6 to 9 months. If successful these products will be part of the over $7 billion cancer treatment market and the $900 million HIV treatment market. CTT would receive royalties based on sales.

• ServoRamä . This technology provides a new type of electromagnetic linear actuator with very low power requirements and power consumption. These new motors are significantly different from any other form of linear motors and have a wide variety of commercial applications in the industrial, entertainment, consumer, auto, and military and aerospace sectors. These improved servo-motors offer a quieter, cleaner more cost effective and power efficient solution for motion simulators in military and entertainment applications, suspension systems in vehicles and even in elevators, fork lifts, dumb waiters, airplane control devices and more. The U.S. market for linear motors and drives is expected to reach approximately $108 million by 2002. The technology represented by CTT meets or exceeds the capabilities of the current technologies used in this market and is also expected to enable the development of other markets not represented in the $108 million forecast.

• Smart Paint. Smart Paint provides a method for monitoring and detecting the presence of a crack in structural materials such as steel in bridges or the metal in airplanes. Smart Paint contains tiny, dye filled capsules suspended in paint. A crack in a material coated with Smart Paint is indicated when the capsules containing a contrasting color are ruptured when the crack develops.

• Remediation of Contaminated Ground Water and Soil. This technology offers an improved method of treating extremely hazardous chlorinated organic contaminants which are known to currently exist in the nation’s ground water supply. Initial in-situ tests performed by CTT licensee Arcadis, Geraghty & Miller, Inc, an international consulting and engineering company, have shown reduction of contaminants of approximately 90+%. Billions of dollars are being spent each year to decontaminate soils, sediments and groundwater aquifers in the U.S. The cost of the remediation of known sites in the U.S. is estimated well above one trillion dollars according to the current environmental standards and regulations.

• Drug Delivery Compounds. This new class of drug delivery compounds can be linked with a variety of therapeutics to dramatically improve control and effectiveness of therapeutic drugs. They are expected to be useful in treating a variety of medical conditions, including abdominal adhesions, endometriosis, and benign prostatic hypertrophy (BPH). The compounds have also been demonstrated to increase the effectiveness of cisplatin, a highly effective cancer therapeutic. These compounds are soluble in water and provide flexibility in the administration of therapeutics – when coupled to a therapeutic, these compounds can be utilized as mechanically implanted strips, ribbons, films, or injected directly.

Management

Frank R. McPike, Jr.
President, Chief Operating Officer and Chief Financial Officer

Frank McPike was named Competitive Technologies' President, Chief Operating Officer and Chief Financial Officer in the fall of 1998 and has been with the Company for 15 years. As a member of CTT's executive management team since 1988, Mr. McPike has helped develop CTT’s specialized approach to technology incubation as well as guide the company through several important transitions that have made it a global leader in technology commercialization. He has helped form six companies to accelerate the commercialization of new technologies developed at CTT client institutions.

Prior to joining CTT in 1983, Mr. McPike was a Senior Audit Manager with Coopers & Lybrand where he was responsible for several multinational corporate clients and a number of venture capital partnerships. He holds a Bachelor of Science degree in Accounting from Manhattan College and is a licensed CPA.

Peter D. Holden, Ph.D.
Senior Vice-President

Peter Holden has been with Competitive Technologies for 5 years and has been Senior Vice President since 1997. He has more than 10 years experience in the management and commercialization of advanced technology for global corporations and hi-tech start-up companies. Dr. Holden manages CTT’s international ventures and concentrates on US and International client development, the management of corporate licensing programs, and the formation and growth of CTT's small business development program. He has helped the Company develop strong ties with major corporations in Japan, Korea, Israel and the UK, including Sony Corporation, Matsushita, Samsung and British Telecommunications.

Prior to joining CTT, Dr. Holden was Corporate Research Associate at GEC Alsthom. He later worked in Japan for Matsushita Electric Industrial Co. Ltd. as a technology transfer specialist. Dr Holden is also on the Board of four other hi-tech start-up companies. Dr. Holden graduated at the top of his class at Bradford University in the UK where he earned a joint Bachelor of Science/ Bachelor of Technology degree in Engineering and Industrial Management. He also earned a SERC/European Community sponsored Ph.D. from the UK's Center for Innovation and Technology Assessment at Cranfield Institute of Technology.

Mr. Michael R. Novack
General Counsel

As General Counsel, Mike Novack provides legal counseling, manages CTT’s university patent portfolio, and negotiates and drafts agreements for the company and its clients. Mr. Novack also prosecutes patent applications and provides legal support to CTT’s University clients. Mr. Novack joined Competitive Technologies in 1993. He served as Assistant General Counsel for CTT beginning in 1995 and took his position as General Counsel in 1997. Mr. Novack has extensive experience in structuring and negotiating licensing transactions involving corporate, university and government entities. During his tenure at CTT, Mr. Novack has negotiated more than one hundred agreements involving various disciplines in the digital, life and physical sciences areas.

Mr. Novack is a member of the Connecticut Bar and is registered to practice before the U.S. Patent and Trademark Office. He holds a law degree from Franklin Pierce Law Center, where he concentrated on intellectual property law. He also holds a B.S. in Biology from Union College of Schenectady, NY.

Mr. John W. Fitzpatrick
Assistant General Counsel and Patent Counsel

Mr. Fitzpatrick has been with Competitive Technologies since 1997 and has more than 5 years of experience in intellectual property law and licensing. As Patent Counsel he provides CTT with top-flight patent and patent protection support, and his thorough knowledge of intellectual property law has been instrumental in CTT's efforts to effectively incubate and commercialize promising technologies. As Assistant General Counsel Mr. Fitzpatrick assists the General Counsel by providing general legal services to the company.

Prior to joining CTT, Mr. Fitzpatrick worked at law firms in Florida and Washington, D.C. where he specialized in intellectual property law, licensing and computer technology. He is a member of the Florida Bar Association, the American Bar Association and the United States Court of Appeals for the Federal Circuit, and is registered to practice before the United States Patent and Trademark Office. Mr. Fitzpatrick holds a B.S. in Biochemistry from Colorado State University, and a Juris Doctor and a Masters of Intellectual Property Law degree from Franklin Pierce Law Center.

Mr. Wil Jacques
Vice President, Marketing

Mr. Jacques is Competitive Technologies' Vice-President of Marketing. He serves CTT clients by developing strategies for the marketing and sales of Competitive Technologies' intellectual properties. He also helps implement these strategies in ongoing conversations with potential clients that help them better understand what CTT's technology "mutual fund" has to offer.

Prior to joining CTT, Mr. Jacques led a number of technology, marketing and sales initiatives with the U.S. Navy and Praxair Surface Technologies designed to increase sales and streamline product marketing efforts. Mr. Jacques holds a Bachelor's degree in Engineering from Howard University and MBA in Marketing from American University.

Financial Status

CTT today is in the strongest financial condition that it has been in years. The Company has completed a restructuring, tightening its belt in order to bring operating expenses in line with revenue. In CTT's most recent two quarters, the Company posted increased revenues, reduced operating expenses and net income. The comparative balance sheets, statements of operations and cash flows that follow provide detailed information.

In the fourth quarter of fiscal 1999 (not yet reported) the Company sold its remaining interest in NovaNET Learning, Inc. (a company founded by CTT in the mid-1980's) and recognized a gain of approximately $2.3 million. In addition, this sale increased CTT's cash reserves by approximately $2.5 million.

Important factors relating to CTT's financial condition include:

• CTT has a strong balance sheet

• With the $2.5 million from the sale of NovaNET Learning, CTT has in excess of $5.5 million in cash and short term investments

• CTT has no short or long term debt

• CTT has tax loss carryforwards of approximately $16 million to shelter future income

 

Direct Inquires to:

This information should not be construed as an offer to sell or solicitation of an offer to buy Competitive Technologies securities. Statements about the Company’s future expectations, including development and regulatory plans, and all other statements in this document other than historical facts are "forward-looking statements" within the meaning of applicable Federal Securities Laws and are not guarantees of future performance. These statements involve risks and uncertainties related to market acceptance of and competition for the Company’s licensed technologies and other risks and uncertainties inherent in CTT’s business, including those set forth in Item 1 of the Company’s Form 10-K for the year ended July 31, 1998 and other factors that may be described in CTT’s filings with the SEC, and are subject to change at any time. The Company’s actual results could differ materially from these forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statement.