CEO's Open Letter to Infrax Systems (IFXY) Shareholders

ST. PETERSBURG, Fla., Aug. 20, 2012 /PRNewswire/ -- Infrax Systems, Inc., (OTC.BB: IFXY), a global provider of Smart Grid-related products and services for the Energy and Utility industries, today issued the following letter to our shareholders from our Chairman & Acting CEO Sam Talari:

Dear Fellow Shareholders,

As an acting CEO of Infrax Systems, I would like to update all of our shareholders on our current business and future strategy. Since I took my old position back few months ago, I have given my best to bring about culture of efficiency and work place collaboration to increase revenue and shareholder value.  We have worked very hard on all fronts to monetize our current assets including Lockwood technology and completing our first R&D project, SNIC.  Although with few distractions, Lockwood has grown immensely, from almost limited revenue to close to $6M in current sales pipeline and growing (for first quarter 2012). It is not an easy task to build the next big thing but, as a team with forward looking vision, we had decided three years ago that as citizens of this great country, something had to be done to secure our national infrastructure. So we partnered with best of best and after two years of hard work, we believe that we have done our part to be the first to secure our grid and our infrastructure by introducing the SNIC. We will do that in October at ITRON UTILITY WEEK 2012.

We have also looked at acquisitions to increase our footprints locally and globally and we'll continue doing so in years to come. We have made an interest in a Chinese company with a certain synergy within the Smart Grid industry. We believe if this interest comes to fruition, it may open China to our products and services as it will be the largest market for years to come. The U.S. Energy Information Administration (EIA) estimates that China will need to allocate $1.5 trillion towards Transmission & Distribution (T&D) pipelines through 2030, which is more than it will need to allocate for actual power generation. But our main goal will always be to grow organically through internal monetization and culture of efficiency.

So here are some summaries of our progress and our strategy;

Our Current business

Business – Lockwood Technology & Revenue

We have increased our efforts in generating revenue from previous and current customers of Lockwood. For our first quarter 2012, we have built extensive channels and impressive sale pipeline nearing $6M and growing. Our sales pipeline included projects internationally and locally. We are also seeing major traction from new and current fortune 1000 customers for our products and services for renewal and upgrades. By the end of our second quarter, Lockwood is expected to close a good portion of its sales pipeline.

The new features, operational improvements, and added functionality have been released as an upgrade as version v11.6. We have started releasing this new version to our new customers and will offer it as an upgrade or as a new instance to our current customers.

Our development road map plan is to give the entire platform a structural overhaul and graphical refresh by porting all of the features and functions into a "Browser-Based" user GUI that can be more easily deployed, managed, and updated. This would allow Lockwood's platform to be deployed in a "Cloud-Based" architecture. This upgrade will better position Lockwood's solutions to be sold into the vertical markets we've identified for our next focus. This will also allow us to better manage different licensing options, thereby increasing revenue.

The Future is Now – Lockwood Technology

How could you manage, analyze and access millions of assets with terabytes of information? Lockwood technology is in the process of building the next Gen enterprise asset management software called *XposeBD*. Using big data as its basic construct, Lockwood designs to be in the forefront of the big data enterprise application market targeted at large enterprises with terabytes to manage. We are planning to release this version in calendar year 2013. We estimate, this revolutionary product evolution will contribute greatly to our revenue and bottom line.  

Management – Lockwood Technology

As we continue expanding our team at Lockwood, we are proud with the addition of Mr. Dave Kemman to its management team.

Mr. Kemman started his position as the VP of Sales, Western Division, on August 1, 2012. He has over 20 years of progressive experience in direct sales, channel sales, business development, marketing, operations leadership, sales and consulting management in highly competitive segments of the IT industry and as a senior executive, proven producer of sales and profit with ability to pinpoint business opportunities.  Responsibilities include P&L, partnership and distribution channel development, startup company creation, and most importantly sales. Experience also includes IT infrastructure and process implementation consulting.

Corporate update – Lockwood Technology

As stated in our previous letter, being in the high technology field, building and owning sophisticated IP, we value our Intellectual property and will ensure its protection for the sake of the company and its shareholders. Besides our initial lawsuit filed by Infrax Systems for IP theft with the United States District Court against Lockwood Worldwide Incorporated, Brad Vinecombe, Cheryl S. Reed , Bruno Riegl and Adam Vinecombe, Lockwood Technology has filed a separate lawsuit jointly with Daedalus Capital with UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA, WEST PALM BEACH DIVISION, under the civil RECO act. Currently we are awaiting important decisions by the court in regard to our suit. We are confident that we will overcome and be compensated for the proposed damages. Hence the lawsuit has caused delays in spinning off Lockwood and currently we are working it through the system to complete the spin-off.

Business – OptiCon systems

Due to the extraordinary demand created by the current global need for broadband, there has been a resurgence of fiber builds across the globe. The company owned OptiCon Systems is a prime candidate for the management of fiber inventory.  Hence the company has decided to revamp and launch OptiCon Network Manager starting in the third quarter. We are hoping with the implementation of OptiCon that it will contribute significantly to our revenue and bottom line.   

Business – Engineering and Professional Services & Revenue

Our newly formed operations are starting to make traction.  The Engineering and Professional Services organization was started in April 2012. The mission of this operation is to provide specialized engineering and professional services for Smart Grid related activities in the power utility industry.  The customer focus is for medium to small Investor Owned Utilities (IOU), Municipalities and Rural Electric Cooperatives.  Our areas of expertise include Smart Grid consulting and Neighborhood area network design, Intelligent Meter networking, Distribution Automation, Volt and VAR management systems and networks, Intelligent sensors, SCADA data networks, fiber optic design and construction engineering. 

Although in the early stages, we are currently bidding on two significant projects which are still in the bid evaluation phases.  The one is with an Investor Owned Utility for an intelligent Capacitor bank communications network and the other is with a large rural electric cooperative venture to design a fiber optic based backbone communications network primarily used for transmission relay circuits. 

The Engineering and Professional Services organization is also involved with the sales and support of integrated third party products and services for Physical substation security and radio networks to support utility infrastructure. Additionally we have six utilities actively interested in our Substation Intrusion detection system which we have branded as SPIDer.  Currently we have a sales pipeline in excess of $1.3Millon which is continuously increasing.

Business – Infrax Products & R&D

SNIC & Beyond

Infrax Systems has been invited by its partner Itron, as a sponsor, to showcase its highly anticipated, world only, 2.4GHZ Secured Network Interface Card (SNIC) built based on its Secure Intelligent Energy Platform. Infrax will be showcasing the relevance of security in today's world of Smart Grid and how its ever growing product lines will build a solid barrier against insidious intrusions through its initial product; "SNIC". ITRON UTILITY WEEK 2012, hosted by one of the largest Meter manufacturers in the world, is a premier international event with thousands of participates from utilities from all over the world.

Network Transport ‐ IntelliNet

IntelliNet is a wide area multi‐layered, multi‐protocol, multi-secured communication system, that is communication protocol agnostic and standards compliant to manage Smart Meters (AMI, AMR), Transmission & Distribution Systems. IntelliNet offer:

• Multi‐protocol, multi‐layered advanced communications architecture
• Advanced wireless technology utilizing Wi‐Max technology
• Accepts data and communications from various networks and transports over a common secured platform
• Provides efficient data flow management and logical segmentation of devices and network domains that are user defined
• Future enhancements to include fiber optics and PLC

With over 3.5 trillion dollars in estimated spending on the Smart Grid related products and services globally, we believe with the completion and the production of our R&D products and our related services, Infrax Systems, will see considerable revenue for the coming years.

Infrax Systems Inc. – Future products

Through modification of the SNIC, a variety of sensors and devices that is used in the substations, distribution and transmission grid will be provided secure, wireless communication capability. Infrax has identified several such devices and have initiated preliminary discussions with some of the manufacturers of these devices. Examples:

• Capacitor bank controllers
• Voltage and current sensors
• Transformer tap changers
• Intelligent segmentation switches and re‐closures
• Hardware based security using Trusted Platform Module (TPM) for the next version of SNIC

General update

We have just finished our move to our new permanent location on the third floor of the Capital building. With a five years lease, we have plenty of room to grow.

About Infrax Systems

Infrax Systems offers a series of interrelated operational management, communications, and grid security related products and services known as Secure Intelligent Energy Platform (SIEP). Our products enable a comprehensive and unified solution for communications and applications management of the Smart Grid. SIEP™ incorporates a wide array of communications, security, device and data management tools for Smart Grid applications such as advanced metering solutions and grid optimization. SIEP platform creates a unified solution to securely manage Advanced Metering Infrastructure (AMI) and distribution automation. Infrax's secure smart grid platform, incorporates a communications transport and management system, (GridMesh™), device and data security management, and ultimately secures intelligent endpoint devices (SIED). The secure management of the "last mile" backhaul will be necessary for utilities to implement Smart Grid applications including AMI, real-time pricing, Demand Side Management (DSM), Distribution Monitoring and Automation. When combined, these applications can offer economic, operational and environmental benefits for utilities, and ultimately the utility's customers.

For INFRAX Systems information, contact [email protected] or visit www.infraxinc.com.

Forward-Looking Statements

This press release may contain forward-looking statements covered within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our services and products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this press release that are not historical fact and involve risks and uncertainties. Our expectations regarding future revenues depend upon our ability to develop and supply products and services that we may not produce today and that meet defined specifications. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and changes in pervasive markets.

Contact:

Media Contact:
Infrax Systems, Inc.
[email protected]
727-498-8514

SOURCE Infrax Systems, Inc.

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