Cantronic Systems Inc.
TSX VENTURE : CTS

Cantronic Systems Inc.

July 15, 2008 09:45 ET

Cantronic Growth Strategy Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 15, 2008) - Cantronic Systems Inc. ("Cantronic" or "Company") (TSX VENTURE:CTS), today revealed its growth strategy to:

- Expand core business in North America and Europe

- Enter the Chinese market with superior technology and selective acquisitions

- Expand technology and product leadership to enhance competitive advantage and increase scope of products.

"Cantronic has strong customer relationships with key industry players and aims to be a leading provider of infrared vision and video surveillance products, for both high-end and commercial grade applications in North America, Europe and Asia. We will continue to have significant research and development expenses to provide a continuing flow of innovative and high quality products, maintaining and enhancing our competitive position in each of our business segments. By leveraging our infrared technology advantage, broadening our product portfolio and having the ability to lower our price points, we can expand our existing client base and distribution network, grow in China and expand our core business in both North America and Europe," said James Zahn, president and chief executive officer.

The right place at the right time. Infrared vision is not just for the defence sector. Commercial applications, including Homeland Security and Industrial Monitoring, are amongst the fastest growing markets in the world. In North America video surveillance systems markets are expected to grow from $13 billion to $46 billion by 2013 (Source: ABI Research).

Cantronic has a worldwide, exclusive license to 17 infrared patents - through its US subsidiary QWIP Technologies - to produce and sell infrared detectors and sensors. These are based on California Institute of Technology's (CALTECH) Quantum Well Infrared Photodetector technology, developed by Dr. Sarath Gunapala, a senior research scientist and a principal engineer at NASA Jet Propulsion Laboratory. Dr. Gunapala recently joined Cantronic's US subsidiary as Chief Scientist, a consulting position, supporting Cantronic's product development strategy.

Cantronic serves approximately 30 customers, located primarily in the US, Europe and Asia. Current customer list includes: DARPA (US Department of Defence), Canadian Department of national Defence, DRS Technologies, Northrop Grumman, UK MoD (Selex Galileo, formerly BAE Systems), Siemens, US Army Research Laboratory, US Navy, Lockheed Martin, Johnson Controls, and ADT Security Services.

Cantronic plans to continue to expand its core business in North America and Europe through focused product development with a goal of enhancing competitive advantage and product scope, and through direct sales and partnerships with well established professional distribution organizations. (See news release about Northern Video Systems, July 7, 2008).

Geographically, China represents a unique opportunity, as the highly-fragmented Chinese surveillance and security market has been growing at an annual rate in excess of 30%. It is estimated to reach $43 billion by 2010, according to China Public Security Guide (published by the Chinese Security and Protection Association) due in part to the Chinese government's mandate for nationwide installation of surveillance and security systems. Programs such as the Safe City Initiative cover 666 cities country-wide.

On June 2nd, 2008, Cantronic announced a Letter of Intent for the strategic acquisition of a video surveillance technology company in China, a first step in accessing this fast-growing market through mergers and acquisitions of several carefully selected manufacturing companies with established customers in China and complementary products in the security and video surveillance product sector. On July 10, Cantronic completed a $5.75 million brokered private placement and the net proceeds will be used to finance the strategic acquisition in China, as well as for commercialization and general working capital purposes.

Accelerating the Company's growth strategy in Asia through strategic alliances and acquisitions while expanding our core business requires talented people and resources. On June 10th, 2008, Cantronic announced the formation of a Board of Advisors. The Board's mandate is to advise the chief executive officer on matters of strategic importance to the Company including growth strategy, scientific advancement, and corporate development. Mr. Kim Oishi was the first appointee to this Board, additional Board members appointments will follow.

About Cantronic

Cantronic manufactures, distributes, and provides training and services in the fields of infrared imaging and video security surveillance technologies, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security and surveillance application.

Cantronic, through its US subsidiary QWIP Technologies, Inc. ("QWIPTECH"), holds a worldwide exclusive license form the California Institute of Technology ("Caltech") to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology.

Cantronic is a Tier 1 issuer on the TSXV exchange, trading under the symbol CTS. For further information about Cantronic and QWIPTECH, please visit our websites at www.cantronics.com and www.qwip.com.

Safe Harbor Statement

The Securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Forward-looking statements contained in this press release involves known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Cantronic to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.

TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the contents of this news release.

Contact Information