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Why is the Lobster-Caller™ electronic, audible, underwater bait needed?
Briefly summarize the scientific basis of this technology. Describe the main advantages over other the types of bait. Describe the other types of bait. Could this technology be used for species other than lobster? Are there proprietary rights? (Note: should we display legal opinion letter) Why do fishermen want to use this product? How will you market to fishermen? Summarize the advantages of this business over others for investors. How will ABT make money? Why lease rather than sell the Lobster-Callers? How does the recharging program work? Can you reduce potential theft among fishermen and poachers? Describe the ecological benefits of the Lobster-Caller™. Couldn’t the "Lobster-Caller™" cause over fishing due to its extreme efficiency? Describe the technical background and current status of Lobster-Caller™ technology. What are other possible uses for the Lobster-Caller™ technology? Where is your company located and why? What is ABT’s vision for business development and expansion? Describe the potential profit in the USA and worldwide. Describe the risks as ABT sees them. Worldwide data on lobster species, distribution and harvest tonnage. What does a spiny lobster look like? What does the Lobster-Caller™ look like? See the Power Point presentation about ABT and the Lobster Caller™
Our strategy is to communicate with the most respected and influential fishermen and offer them a "free trial" use of several Lobster-Callers for a limited period of time including appropriate training and assistance. In the US we already have commitments for 8,240 units as soon as we can deliver them. These prominent Florida lobster men represent over 30,000 traps or approximately 7% of the total traps in the Florida Keys.
Top 10) How will ABT make money? Depending on the geographic area, A.B.T. T. or one of its licensee franchisees will lease - not sell Lobster-Callers for cash ($10 per month in the USA) or as percentage of the fishermen’s catch. The lease price exceeds production costs by attractive margins. Top 11) Why lease rather than sell the "Lobster-Callers™" ? A) makes more profit for ABT B) allows the fisherman to pay us as the unit makes extra profit for him. Most fishermen do not have sufficient cash or credit to purchase a large number of units with up-front payment. C) Leasing gives us enforceable, legal rights over how the Lobster-Caller™ is used by the fishermen providing that such rights are shown in the lease agreement. This not only helps us to inspect and protect our equipment but also allows us to determine the policies regarding how they will be used. This will give us the right to control over-fishing, ecological abuses and breeding destruction by merely confiscating the lease violator’s Lobster-Callers or refusing to recharge them. Our recharging system is unique and no other equipment can be used to recharge our Lobster-Caller™ equipment. As a result any violator will be deprived of the benefits of our equipment and will thereby be unable to compete with other fishermen who have it. Top 12) How does the recharging program work? According to a pre-agreed schedule the fisherman merely brings his spent units to the supplier’s location and exchanges them for ones that have already been recharged. This gives us a predetermined way to inspect the equipment and assure we get paid for its use. We alone will determine how long each Lobster-Caller™ will operate (up to 8 weeks if desirable). This is because we alone control how much electricity we will recharge into depleted batteries. Since all of our recharging equipment, including the plugs and sockets are our own unique and proprietary design, no one else can recharge the Lobster-Callers. Any attempt to do so will destroy the unit as will any attempt to disassemble it. Top 13) Can you reduce potential theft among fishermen and poachers? News will travel fast that stealing won’t benefit the thief because the Lobster-Caller™ will soon run out of power and can’t be recharged. Stolen units are easy to see, both on the boats and in the traps (by divers) so the thief’s chances of being caught with the stolen property is very high. We are also considering adding a RFID (Radio Frequency Identification) chip to each unit which will enable us to scan i.d. every unit brought in for recharging. Each batch of units will be recorded and assigned to lobster fishermen when delivered. Additional Protection of the Lobster-Caller™ is provided on four fronts: Legal, Financial, Technological, and Practical. I.) Legal - Theft and infringement is always possible. We anticipate that the Lobster-Caller™ will be a highly successful product and we expect a certain amount of attempted infringement and copying despite U.S. and international patents, copyrights and trademarks. Thanks to extensive proprietary rights provided by international patents and copyrights, we anticipate exclusive rights in most of the Americas and Australian markets. The US, British, and South American political and geographical areas will be the best protected. Certain Asian markets may be more difficult but the other protections may halt or inhibit production and use of a competitive unit. II.) Financial – The costs to produce the unit in a useful design by commercial fisherman in small quantities would not be practical. It is much cheaper to lease from us. For competitors who wish to mass produce the product, will have to do so clearly violating our copyrights and patents (legal Protection) and displace our current user base (Practical Protection) III.) Technological - For the right sound to be reproduced, in an under sea environment, inside an electronic unit that has to be manufactured to withstand the vigor’s of the undersea environment would be extensive to duplicate. We plan to lease the devices at a price that would make it foolhardy for users to spend the money necessary to replicate our product. Commercial interests may want to duplicate it but then will face the following practical barriers. IV.) Practical - We plan to penetrate the worldwide market rapidly and become solidly established in each country’s distribution and supply chain as appropriate to each market. It would make more sense to acquire our company then try to replace and replicate our success. Lobster men frequently monitor each others traps and if a foreign competitor offered a similar product at a cheaper price our customers would instantly find out and report infringers to us with ferocity. Commercial fishing is very competitive and operators are historically the first to report cheaters as a way to eliminate their competition. All of our leased customers will have a non-compete non-circumvention clause in their lease agreement in force for 5 years or the longest term allowed by a court of competent jurisdiction from the termination of the agreement. Frankly the legal remedies of contract law are far faster, cheaper and more effective than any type of proprietary rights. With some modification we plan to use this basic same "proprietary rights/ not compete lease program" in all areas of the world where we will market our products. For the above reasons a thief will be unable to sell the stolen units. Top 14) Describe the ecological benefits of the Lobster-Caller™. A) Each unit is recyclable due to recharging capability. B) There is no pollution or anti-sanitation potential. C) Units that might come loose from traps are sealed to prevent battery pollution. In addition the units will float so they will eventually wash up on shore for return to ABT or disposal by the finder. D) Less boat fuel consumption per ton of lobster results in less air and water pollution in the environment. E) Stage specific harvesting could substantially help protect the supply of lobsters and other animals by adjusting the Lobster-Caller’s sound signal to avoid the attraction and capture of animals in stages of extraordinary breeding proficiency or those who have yet to breed. Such selective harvesting could dramatically enhance lobster breeding success yet would have very little negative economic effect on the fisherman. Our lease could be used to enhance such a program. Commercial fishing is destroying our oceans: 1) by destroying the natural population balance 2) creating an imbalance between species, which are interdependent in the food chain and 3) rapes aquatic life without regard to individual stages of development. For many species, unbalanced concentrated fishing enhances these terrible effects. Certain underwater anomalies in the currents and geography attract high concentrations of fish; therefore, these areas are the easiest for the fisherman to harvest. Incredibly, commercial fishing interests often destroy their own source of supply due to poor resource management, economics, and political incompetence. It would be like orchard men cutting down the trees to harvest the apples. In many species, the problems and solutions are identified but ignored. This is because of the high cost of current inefficient harvesting methods. Most aquatic animals are highly prolific breeders. The solution is to stop taking individuals before they mature and can breed successfully. If the breeders are protected it is almost mathematically impossible to over-fish many species. The short-term economics of the currently inefficient harvesting methods cause fisherman to continually destroy these essential breeding populations which take years to sufficiently mature. Example: Spiny Lobster yield about 400,000 new larvae per year, but take seven years to mature. Every "short" lobster taken before breeding also eliminates its entire potential offspring. Our Lobster-Caller™ is so efficient we can use our lease with the fisherman to require that only mature lobster that have already been though at least one breeding season be taken. This is fairly easy to enforce by methods that are already in use. The solution is called Behavioral or Stage Specific Harvesting. This is a fairly new field. Aquatic Behavioral Technologies, Inc. has assumed a leadership role by developing methods of calling highly specific types of aquatic animals into traps by the use of electronic signal devices acting as bait. We will first use this extraordinarily promising method to harvest the spiny lobster. Once we have established positive cash flow, we will expand the technology to include other species of lobster, crabs, and other crustaceans as well as fish and other marine food animals. We believe that A.B.T. may offer the only practical solution to harvesting the oceans that can hope to satisfy all parties: consumers, commercial fishing interests, the food industry, governments and environmental concerns. In addition, the increased efficiency should generate very satisfying profits for our investors while providing the commercial fishing industry with a way to catch more fish, improve the fisheries, preserve the oceans and feed more people. Top 15) Couldn’t the Lobster-Caller™ cause over fishing due to its extreme harvesting efficiency? Yes, this is why there absolutely must be controls on its use. This is a major reason for the lease program and why any large corporate partner we work with must be conservation minded. Rumors will go far and wide about the research success of the Lobster-Caller™. Even if we chose not to continue, it is certain that other, possibly less scrupulous people would seize the technology for their own use. Top 16) Describe the technical background and current status of Lobster-Caller™ development. Phase 1 – Acquisition and utilization of the Lobster language was originally planned to take place in the large tanks at the Keys Marine Shark Laboratory in Leyton, Florida over a period of two months. Unfortunately we discovered that confined lobsters make no sounds. Due to this fact all recording and testing of lobster sounds had to be done in the open ocean over a period of 18 to 24 months. Open water testing was initiated the appropriate sounds were deciphered, recorded, refined and digitized. No prior data was available because lobsters have no ordinary ears like organs and were believed to be unable to communicate by sound (only by scent). Phase 2 – The currently available under water speaker equipment capable of realistically reproducing these lobster sounds were not practical for lobster traps because each set would weigh about 30 pounds and require one to two cubic feet in volume. Each might also require a long cable and cost from $400.00 to $1,000.00. Our unit is about the size of your hand. It is totally self contained and weighs about two pounds. It is designed to withstand the constant motion and shock inside the lobster trap at depths down to about 300 feet. After 12 to 18 months of testing and modification we are now repeating testing to assure that all goals regarding reliability have been met. We believe this area of development is virtually complete. A major setback occurred in this phase. Two of the parts in the CPU were scheduled to be discontinued. That entire unit had to be abandoned and a new design created, prototyped and tested. This cost us several months. Phase 3 – As the design of the Lobster-Caller™ unit has evolved due to research and development, so has its Recharging Unit. Design updates are now complete and the first recharging unit is nearly ready for testing. It is designed to handle several Lobster-Caller™ units simultaneously. While the Lobster-Caller™ units are relatively straight forward and easy to build, precautions have been taken so that the Lobster-Caller™ units can only be recharged by our own recharging units and no others. Phase 4 – Open ocean testing of the Lobster-Callers™ have demonstrated the unit will call lobster into a trap unassisted by any other bait. Within a 48 hour period, the very first test trap using our Lobster-Caller™ alone had 5 legal sized lobsters in it (plus two "short" lobster). This is the kind of catch that could take a week or more with ordinary baits. As compared to other traditional baits, the ABT Lobster-Caller™ appears to be very successful. Various tests in commercial lobster traps imply similar results but this data is marred by the high rate of failure of first run Lobster-Caller™ units due to faulty on/off switches and defective battery contacts. These problems are now being addressed and a new 2 to 6 week study must be repeated to assure statistical relevance. All protocols are established and ready to be implemented. The new Lobster-Caller™ units to be used in this study are scheduled for testing in late December, 2003. This will also include a new experimental enclosed audio case for greater sound. We anticipate even better results. Phase 5 – At the conclusion of this testing we will construct an additional 2,000 units and distribute them to selected customers for controlled test marketing. This will also test our recharging and other systems. Once the test has proven successful for several weeks, we will initiate and increase our U.S. sales. Phase 6 – We have cultivated some prospects for foreign distribution which we will further pursue upon the successful U.S. testing described above. Immediate prospects are the Bahamas, Virgin Islands, Belize, Nicaragua and Honduras. We have experienced personnel already lined up to expand into these jurisdictions. See (Management and Advisors) Other targets include Australia, other South and Central American countries such as Brazil, and African coastal countries, especially Ghana. Top 17) What are other possible uses for E-Bait™ and the Lobster-Caller™ technology? A) Repel unwanted fish and animals from traps, nets, swimmers and water inlets with a series of units which can make sounds that either attract or repel various species. B) Drive various species away from oncoming disasters such as chemical and oil spills, harmful algae blooms, geological disasters and even magnetic anomalies in the earth that cause some species to run aground. C) Species suffering from inadequate nutrition could be attracted toward sources of food. They could be attracted toward favorable water temperatures or repelled away from unfavorable temperatures. D) The newborn and young of threatened species might be protected by calling them away from predators as well as by attracting or repelling predators away from them. E) For centuries we have managed and herded land animals to enhance their survival. We may be able to utilize the communication features of the Lobster-Caller™ technology as a practical cost-effective means to help manage the oceans and direct traffic for animals that can benefit from it. Note: the suggestions shown above would probably be enhanced if the units were being utilized in conjunction with various satellite capabilities as well as oceanographic sensing units. Top 18) Where is your company located and why? Good ideas can happen anywhere. The original founders are all from Summit County in the mountains of Colorado. It is over 9,000 feet above sea level and at least 1200 miles from saltwater. We have created a base of operation in Marathon, Florida (see map). It is the second largest community in the Florida Keys. This chain of islands stretches southwest from the Florida mainland near Miami over 130 miles into the Florida Straits. Its end is Key West, an island about 90 miles from the coast of Cuba. The Keys and the adjoining Everglades National Park comprise a large tropical estuary, which is one of the world’s major breeding area for marine species. These are boarded on the north by one of the world’s largest and most chemically laden agricultural areas and Miami, a huge source of urban pollution. In addition the Keys are extremely attractive to millions of tourists, boaters, fishermen and divers every year. This is also the only area where commercial spiny lobster fishing is currently performed in America. Due to these extreme pressures, we felt this area would test the Lobster-Caller™ under the worst possible conditions; therefore we placed our operations there. Top 19) What is ABT’s vision for business development and expansion? ( see FAQ #16 for phases of the technology) We have completed Phase I – the use of recorded sounds of spiny lobster to attract other spiny lobsters. The results were 2 to 5 times greater than traditional baits have achieved. Phase II is also successfully completed – the ability to attract lobsters into traps with our small, hand-sized speaker unit without a sonic cavity device. Though this test was marred by damaged units, those that survived appeared to be 2 to 5 times more effective in side by side comparison tests in the open ocean. In Phase III – beginning at the end of December 2003, we will test hand built prototypes with the sonic cavity device. These are expected to be much louder and more reliable, therefore even greater comparative trapping production is anticipated. As Phase III ends in January, Phase IV will begin. This will essentially be a repeat of Phase III in several more locations using more prototypes. These prototypes will also include the sonic cavity device (see illustration and exhibits at the end) that increases sound levels but will be very similar to production models. We anticipate successful comparison trap production levels similar to Phase III. Our prototype testing will then end in mid to late December if all goes as planned. In February we will place our first production models (about 2,000) in the hands of fishermen for use in the rough conditions of early winter. If any weaknesses are revealed by February we will correct them and manufacture a larger production run. Because the American spiny lobster season will be coming to an end in late March, the newly manufactured units will be placed in at least one nearby country that has later seasons. Honduras spiny lobster season begins in March at the end of the Florida season We will continue introduction of the Lobster-Caller™ into other countries before their breeding seasons expire. From April to June we will also consolidate the sales for the 2004 – 2005 American season and begin manufacture for delivery beginning in late June and July. By mid-August these units will be in the water ready to catch lobster. We will be working hard to perfect our service, recharging, management and accounts receivable programs. Also in late September 2004, we will take the remaining orders for product in the countries where we previously began working which have later seasons than the USA. These units will also be manufactured and delivered as will the recharging units by late October 2004. During this time our research team will be testing our units in areas located further away from the USA. This will be to assure that the Lobster-Caller™ sound is still appropriate to attract lobsters in each prospective area. As these geographic areas join our program we will implement research to discover areas where the signal we are using will not work and discover new signals which must be extracted and implanted in our e-bait units. Concurrent with this A.B.T. will begin searching for sounds to attract new species. Near January 2005, assuming we have struck a deal with a possible large corporation, we hope to begin developing areas as indicated by their agreement. We hope to use this opportunity to formalize a system beginning with introductions to local marine scientists, academics and appropriate fishing interests. Then animal sound research development followed by training, sales and finally experienced local personnel. In their training we expect to send key personnel (with interpreter if necessary) to experience and study at one of our existing operations for a short period of time. We will also provide training materials that can be translated if needed for further instruction. An appropriate policies and procedures manual will also be a high priority. Top 20.) Describe ABT’s potential profit in the USA and worldwide. A.B.T.’s business model and the worldwide size of the market addressed by it’s new technology is the stuff business managers dream of. Overall the business character of A.B.T. is as summarized in point # 9 above. In terms of real profits the formula is relatively simple for a new technology manufacturing company. Profit margins exceed 60 percent. There are over 425,000 traps in the Florida Keys alone. 20% of that market represents 85,000 Units. At $10 per month this represents $850,000 per month with very low manufacturing and operational costs. In the U S market we lease the units for $10 per month for 8 months. Recharging costs are 1$ per unit each month which ABT pays to our recharge stations. This is Florida Alone. The worldwide market is many multiples larger and ABT has research and expansion plans worldwide. In each country that traps spiny lobster there are a certain number of traps available. These become the targets for a marketing push for this revolutionary new e-bait which holds the key to increase catch for a small monthly fee. Qualified investors are free to examine our pro forma's and business plan. (See investors section). The infrastructure to administer such a program is relatively simple and inexpensive once the research and development costs are fully capitalized. Top 21) Describe the risks as ABT sees them: A) Hurricanes and typhoons will cause the loss of many Lobster-Callers along with the traps that contain them. ABT’s Maintenance Program that can optionally accompany the lease. For a small extra payment by the fisherman both he and ABT can be protected. B) Harassment from environmental agitators, scientists and academics. We will continue to communicate openly and often and seek the advice of these entities when practical. Hiring academics and their students to work on our projects in various local areas would serve us well and reduce their fears about us and our technology. Small research grants and the loan of our equipment would also help create trust and loyalty. C) Investment must be sufficient to support our start-up program until cash flow can do so. Top 22.) Worldwide data on lobster species, distribution and harvest tonnage.  Bold indicates Spiny species who could respond similarly (as the Panulirus Argus does) to the Lobster Caller Signal     Top 23.) What does a spiny Lobster look like?  Top 24.) What does the The Lobster-Caller look like?  Top 25). Where in the world are spiny lobster? All over! The red circled area is where the species Panulirus Argus is found. ABT research indicates that the current Lobster-Caller signal works with this species. Green indicates similar species are found on which additional research will be done.
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