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Thomas Pumpelly (Email) Tim Maier, Esquire (Email)Although it is expected that initial design and testing costs may be funded by the U.S. Government, it is likely that private capital will be needed at all phases of Grid development. Various Government grant programs are available which might seed alternative transportation studies and testing. The Company expects to apply for Federal and State funding grants during the first Quarter of 2009.
The Company intends to actively seek additional capital through the sale of a portion of the Company’s equity. By the 3rd quarter of 2010, the Company expects to sell its equity through an initial public offering on the New York or NASDAQ Stock Exchange.
The majority of capital necessary for the implementation of the Hybrid PT System will be derived from user fees and independent franchisees or “Operators”. Operators will purchase the right to own and operate a specific portion of the Grid System. An Operator might purchase the rights to one (1), mile or Ten Thousand (10,000), miles of the Grid System or perhaps an entire country.
In order to insure conformity with Grid design parameters, the Company expects to construct every mile of the Grid System, including Operator owned portions, through the use of its own equipment or through the use of certified contractors. The Company expects that a large number of Grid Trains and certified Grid contractors will be operational within one (1), year from final design approval.
The Company expects to receive royalties on each Grid compliant vehicle produced during the term of the Hybrid PT Patent exclusive period and an ongoing royalty on each mile of Grid travel.
Each Grid Operator will be a separate, stand-alone, organization and required to pay all costs associated with construction of its Grid infrastructure as well as for a proportionate cost for the Grid ‘s central facility or facilities.
An Operator who invests in a portion of the Grid System, will be expected to receive a strong return on its investment. An Operator may expect to receive a predetermined fee for each vehicle which travels over its portion of the Hybrid PT System. The cost of Grid construction will vary depending on whether or not the underlying land must be purchased or is provided by local, State or Federal Government air right grants. Accordingly, some Grid tolls will be more, per mile, than others
Section 3.2 contains information on “Common Cars” which have been deployed at various locations in urban areas. The Hybrid PT System may license third parties to make available Common Hybrid PT compliant vehicles at Grid stations around the world. The effect of Common Hybrid PT vehicles would be to allow a person who has not purchased a Hybrid PT compliant vehicle to arrive at a special Hybrid PT station area and use a Common Car to access the Grid and after exiting the Grid, use the same Common Car for standard roadway usage.