Headquartered in Irvine, California, Silicon Film Technologies, Inc. designs, develops, and will sell proprietary electronic film hardware and software products for digital imaging applications. We have developed a first-of-its-kind technology that enables a conventional 35mm single lens reflex (SLR) camera to capture, store, and transfer digital images without any modification to the camera. We believe that our electronic film system (EFS) and other products are well positioned to become industry standards among users desiring the functionality of both conventional and digital photography. Our growth will be driven by the rapid proliferation of digital imaging, a large installed base of conventional 35mm cameras, strong product appeal, a highly adaptable, scalable, and defensible product architecture, robust marketing and manufacturing strategies, and a talented management and product development team.

Photography is pervasive, perennially ranking among the most popular hobbies in the world. Last year alone nearly 90 billion photographs were developed worldwide. Until a few years ago almost all photos were captured on conventional chemical film, but more recently the increased penetration of computers into daily life and the staggering popularity of the Internet have fueled the growth of digital imaging. This growth has motivated a large portion of the installed base of 35mm camera users to seek a digital option. In the US alone, approximately 100 million households own a 35mm camera. Moreover, many first time buyers of cameras are also seeking to participate in the exchange and transfer of digital images.

Our EFS product suite is a digital photo system comprised of an electronic film cartridge and a carrier/adapter. The user simply inserts the cartridge, called (e)film, into the film cavity in the back of a conventional 35mm SLR camera. After recording up to 24 images, the cartridge is placed into a carrier/adapter, called (e)port, which may then be connected directly to a personal computer, enabling images to be downloaded quickly into the computer and then printed, sent via email, or modified into a photo end product using photo management software such as Adobe PhotoShop LE, which comes bundled with the EFS system. We will also market a digital photo storage module, called (e)box, which can store and transport hundreds of digital images in the field when the photographer does not have access to a computer.

The EFS system transforms conventional camera equipment into a digital image capture system. It is the only system currently available that provides the convenience and flexibility of choosing between conventional and electronic film formats with the same camera body. The product is aimed toward the large, installed base of 35mm camera owners who would like to enjoy the benefits of digital imaging while not giving up the cameras, lenses, and photo accessories with which they are familiar.

While our initial product release, EFS-1, is aimed at a certain segment of the photography market, we are planning new EFS product introductions over the coming 18 months aimed at broader market segments. We believe that our initial EFS product will deliver, and that future products will continue to deliver, exceptional value to consumers, and that they will enjoy strong product appeal.

We own two United Stated patents that relate generally to the electronic film concept, a module that fits inside a camera in place of conventional film, allowing the camera to capture digital images without modification to the camera. We have filed fourteen additional patent applications, including eight provisional patent applications, that generally relate to features of our products, some of which may have other applications in imaging science and digital camera development. Aside from these patents and pending patent applications, we have built a strong foundation of research and product development capabilities in digital image capture. In particular, we have considerable expertise in sensor packaging, image science, and state-of-the-art electronics design.

Our company was formed in 1998 to commercialize an electronic film prototype developed at Irvine Sensors Corporation (ISC) (IRSN:NASDAQ), a leader in the development of 3D semiconductors and miniaturization of solid-state devices. Silicon Film Technologies, Inc. (formerly Imagek, Inc.) was incorporated in Delaware in June 1998. Pursuant to a transfer agreement with ISC effective September 1998, we retained ownership of all of ISC's electronic film technology, associated intellectual property, and certain other related technology assets.

Upon its formation, our board of directors recruited Peter Sprague, the former chairman of National Semiconductor (NSM:NYSE), to become our chairman. We have recruited a management team of senior strategic, operating, and marketing executives including our president & CEO Ken Fay, former Vice President, Digital and Applied Imaging of Eastmen Kodak Co., and chief marketing officer Doug Howe, former president of Vivitar Corporation.

Our principal executive offices are located at 16265 Laguna Canyon Road, Irvine, California 92618; telephone (949) 417-2260.

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