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DR. CYNTHIA KUPER - MICROMEM TECHNOLOGIES - CEO Interview - published 10/28/2005

DR. CYNTHIA KUPER, Chief Technical Officer of Micromen Technologies. has 17 years experience in research and development in the areas of molecular biology, genetics, solid state materials and carbon nanotechnology. Founder of Pennsylvania's first nanotechnology start-up company. Dr. Kuper has a B.S. and Ph.D. in Chemistry from Temple University and post doctoral fellowship in the laboratories of Nobel Laureate Richard E. Smalley.

TWST: What is Micromem Tech?
Dr. Kuper: Micromem Technologies is a pioneer in magnetic random access memory technology. MRAM is a revolutionary new form of memory which retains all of its information even when power is shut off. MRAM is non-volatile memory and uses magnetic properties of a material to store and process information. Magnetic memory is "universal" because it will replace all other forms of memory used today. Micromem has been an active developer of magnetic memory for close to seven years, and that sets it apart from its competitors. Our patent portfolio clearly drives our competitive edge and today, Micromem develops MRAM technology with our highly talented personnel and our very deep patent portfolio.

TWST: What's the agenda for the company at this point? What are your priorities for the next 12 months? What would make that time frame a success?
Dr. Kuper: Micromem sees its addressable markets in low-density applications such as radio frequency identification devices (RFID) where the returns are almost immediate. Our priorities are to find joint development partners to commercialize MRAM for these opportunities and to begin the process of revolutionizing memory technology for the future.

TWST: How competitive is that area at this point? What are the keys for you achieving those joint ventures and strategic partnerships versus the competition?
Dr. Kuper: We have a variety of competition out there in different memory sectors, but there are few competitors in magnetic memory. Essentially, our competitive edge is design focused. Micromem has a MRAM design that has the fundamental capability to outperform all other competitive designs - it's really that simple. Our extraordinary rich intellectual property and patent portfolio, combined with our highly reliable, low cost to manufacture MRAM design, are the keys to achieving our joint development goals. For us, it's a matter of development partners conducting due diligence on our proprietary device, and recognizing that Micromem MRAM has an edge over what's available in the competitive landscape.

TWST: How strong is the intellectual property portfolio with Micromem? Is that a distinguishing characteristic as these other companies come in and do their review?
Dr. Kuper: Exactly. It's been an extremely distinguishing mark of the company. The intellectual property portfolio is very deep, very strong - groundbreaking. I was very impressed with the depth of the intellectual property, the quality of the allowed claims in the area, and the very early filing dates that predates some competitors in the industry.

TWST: What are the characteristics as far as the features, functionality, power usage, or flexibility that your items can provide versus the alternatives?
Dr. Kuper: I can't comment on specific metrics or the variables that you have mentioned because that data is proprietary to Micromem. But what I can answer for you is that our research indicates a substantial cost advantage over certain kinds of memory out there already, especially EEPROM and FeRAM. We use fewer processing steps than what's used in most memory manufacturing processes today, and that means lower cost. Due to the nature of our device design, we expect to see very competitive power consumption. And overall, we do know at this time that the device design indicates we will not have fundamental scientific limitations, which have been seen running through the communities in FeRAM and thin film MTJs So, Micromem is in a very bright, very prosperous position going into the next year.

TWST: For the potential customers and joint development partners, what are the two or three key features that they feel are fundamental to these products and this product area?
Dr. Kuper: Every joint development partner, depending on their sector, looks for different things. We are in discussions with government contractors, RFID-type vendors and the large vertically integrated giants in the retail electronics industry. Each has one thing in common. They are all looking at power consumption issues. From there they begin to differ. Some development partners want to know what the requirements are for silicon. We are based on gallium arsenide. That's a transition for us, which can also be the topic of a development agreement with an appropriate partner. The larger potential partners that get into various addressable markets are very concerned about processing steps. That's really their key metric. How many processing steps does it take to make your device? Are you going to come in over the number on what we currently use or can you be under? And even if you are under by one or two processing steps, they see that as not only a direct cost reduction measurement of high significance for them, but they also use it as a measure of scalability, which is another key factor in the industry. So the power consumption and the cost for manufacturing are the two key issues that partners are interested in.

TWST: What's been the funding and investment history to date with Micromem? At this point, what additional funding do you need to achieve your goals?
Dr. Kuper: Micromem has a relatively low burn rate. We have more than enough capital assets to cover our expenditures.

TWST: Can you tell us a little about the bench strengths, the depth of technology expertise, the leadership credentials you have already on board, and any areas or positions that you would be adding as you fill out your plan?
Dr. Kuper: Our scientific staff at the University of Toronto is top in the world for micro devices and memory. Harry Ruda, our Chief Scientist, worked for years at IBM and is very familiar with the semiconductor industry. He is a great intellectual asset for the company. Our management team within the company is extremely broad and deep. Joe Fuda, our CEO, has an outstanding background having raised over $150 million in capital and taken over 26 companies' public in his financial career. Dan Amadori, who is our Chief Financial Officer, is on the board as a CFO for over seven public companies. He is extremely experienced and also has direct experience as a CFO for an emerging technology company. And then there's myself as the Chief Technical Officer, coming out of the material science field where I have been trained. I have my PhD in physical chemistry, and I have postdoctoral experience in nanotechnology. That positions me as one of the leaders in materials. Between the three of us, we have a very deep skill set. When combined with the development and research skill set at the university, we are positioned very strongly to go where we need to go in the future.

TWST: Give us your thoughts on what kind of market is available, what kind of market share Micromem's technology can address, and what the pricing and revenue opportunities are that you see for Micromem within that overall market.
Dr. Kuper: We are addressing our markets as we evolve our technologies, starting with the lower-density markets and RFID. Those markets have about a $20 billion projection for 2007, but one could say in aggregate over the next five years, it's approximately a $50 billion market. At the next stage of memory density gets into PDA, cell phones, pervasive computing, and higher density wireless market memory needs. That market jumps up to hundreds of billions of dollars, and then over the years, as we continue to develop our technology, and we're able to adjust very high-density applications such as hard disk drive storage and universal memory replacements, you are looking at trillions of dollars in addressable markets.

TWST: When you look at your technology and some of the other technology or processes out there, what role can mergers and acquisitions play to grow your own portfolio or perhaps to add to others' portfolio?
Dr. Kuper: Finding synergies between emerging technologies is a key metric for growing business in any high technology sector. At Micromem, we occasionally review opportunities that make sense and that have a synergetic role, financially and technically speaking. We conduct due diligence to examine the options would be available to us, either through an acquisition or a merger or perhaps even a licensing agreement. But certainly it is a collaborative environment in an emerging technology industry.

TWST: What keeps you most enthusiastic today about your company?
Dr. Kuper: Our competitive edge and the robustness of our device. Our patent portfolio is very strong. Our competitive analysis makes me very happy because I see what's going on in thin film devices. Technically, we don't have the fundamental design issues that exist elsewhere in competitive device designs and other types of memory technology, so that makes me very excited for Micromem's future.

TWST: Thank you. (DWA)

Dr. CYNTHIA KUPER CTO
Micromem Tech Inc.
777 Bay Street
Suite 1910
Toronto, Ontario M5G 2E4
Canada
(416) 364-6513
www.micromeminc.com