Q&A with International Dispensing Corp (IDC) CEO Greg Abbott

The following is a Q & A with International Dispensing Corporation (IDND.pk) CEO, Greg Abbott.

1) According to your latest Quarterly report (9/30/10), the original vision for IDC was to create and market a cost-effective dispensing system that could keep liquid contents fresh and uncontaminated through the entire dispensing cycle without refrigeration or preservatives. However now, because the company has widened its scope over the entire supply chain, your have added, “innovative, cost effective dispensing solutions in an environmentally responsible manner.” How has your dispensing solution become more environmentally responsible? Are you still keeping liquids fresh and uncontaminated through the entire dispensing cycle?

The Answer(R) tap, our core product, keeps liquids shelf-stable even after dispensing has commenced – that hasn’t changed. As for being environmentally sustainable, a couple of years ago IDC commissioned a company called Allied Development to conduct an independent life cycle analysis of a bag-in-box package with The Answer(R) versus PET bottles, milk jugs, and aseptic cartons. The study took all supply chain factors into account, from resins, to filling, to shipping of the finished product. The results showed that the bag-in-box package with The Answer(R) (Multiserve Safepak) utilized significantly less energy and greenhouse gases through all the production cycles, and took up significantly less landfill, than the other packaging formats. Also, given the fact that over half of the world’s food supply spoils or is thrown away, The Answer(R) keeps product shelf-stable and ensures 99%+ evacuation. We may have changed our mission statement a bit to be more encompassing of what we are accomplishing, but our core mission has never wavered.

2) Bric-Pak by Tetra-Pak, one of the largest packaging companies in the world also keeps perishable liquid food and beverage fresh for long periods without refrigeration. How does The Answer(R), IDC’s dispensing tap, differ itself from the Bric-Pak?

The vast majority of Tetra-paks sold around the world are one-liter and below. Tetra-Paks are essentially single-serve retail packages, because once you open them and expose the contents to air the product starts degrading and you must use it in its entirety or refrigerate. The Multiserve Safepak (bag-in-box or stand up pouch) with The Answer(R) takes the Tetra-pak concept to a larger, multiple-use format. Because The Answer(R) keeps contaminants out of the package even after dispensing has commenced, even without refrigeration, it is an ideal package for food-service. It is also ideal for retail consumers who want to purchase in bulk and save money (and help the environment). Tetra-pak is the largest packaging company in the world. IDC hopes one day to become their counterpart in bulk (2 liter and above) aseptic packaging. Both Tetra-paks and the Multiserve Safepaks are aseptic packages. Aseptic processing means flash pasteurization at ultra-high-temperatures for a very short duration. It does not overcook the product, and thus retains more vitamins and taste.

3) It is my understanding that IDC manufactures The Answer(R) in-house rather than licensing to a third party. How has this helped in getting your product to market?

IDC owns its own tooling and assembly equipment, but all production is managed by Hoffer Plastics, Inc. (South Elgin, IL). Hoffer specializes in molding and assembly and does work for a number of Fortune 500 companies. They have been a terrifically supportive manufacturing partner.

4) Are you exploring other industries than Food & Beverage? Can you name any?

We occasionally get approached by cosmetic and pharmaceutical companies and remain open to exploring opportunities as they come to us, however I feel it is in the company’s best interest to focus on what it knows best – food and beverage – and become entrenched there rather than chase other industries, especially given the challenges that every new technology has to overcome.

5) You stated in your last Quarterly report that your burn rate in 2010 was $875,000. How much of that went towards production? If production increases in 2011 will you have efficient capital to keep your factories humming or will you need to raise additional capital?

The burn rate refers entirely to overhead (salaries, patent applications and fees, testing, marketing, travel, etc.) not to production costs. As IDC’s revenue grows, we believe we can finance expansion of production capacity through internally generated profits and/or borrowing based on a major contract.

6) The Multiserve SafePak is an all-encompassing solution like the old bag-in-box concept that you see a lot with lower end wines. Can you elaborate on how the Multiserve SafePak differs from the bag-in-box concept?

The Answer(R) tap makes all the difference, it takes bag-in-box into a whole new realm of healthy, aseptically produced liquids and beverages. The Answer(R) has created the world’s first safe bulk aseptic package. The wine taps currently on the market simply evacuate product; they do not provide a barrier and therefore are not close to being aseptic. The Answer(R), which has been validated by 3 FDA processing authorities and has been written up favorably in the peer-reviewed Journal of Food Protection (March, 2008), keeps bacteria, mold, and other contaminants from entering the package after dispensing has commenced, even without refrigeration. It is a truly revolutionary and visionary product, one that has taken years to develop, validate, and commercialize.

7) Articles about The Answer have appeared in numerous trade press publications. Can you provide links so the online community may access?

a) See Page 4, Has Sunkist Found The Answer to New Launch in Bulk Packaging

b) IDC and PepsiCo Sign Agreement for The Answer

8) Do you have any intention at this time of becoming a fully reporting company and moving to the OTCBB or any other exchange?

After the passage of Sarbanes-Oxley, which made being a “fully-reporting company” prohibitively expensive for a start-up, we went to the Pink Sheets. Had we not done that, we would be spending more on accounting than our entire burn rate combined, which of course makes no sense. We have no plans at the moment to move to another exchange, as our primary focus is to build value for shareholders and not hype the stock prematurely.

9) You were named CEO in October 2010, less than six-months ago. How are you enjoying the job so far? Is Greg Wuttke still employed at IDC?

Actually I’ve been CEO for roughly 4 years, and I am really having fun because of the headway and real progress we are making. I have many years and millions of dollars personally invested, and therefore am very motivated! Greg Wuttke joined IDC full-time in April 2010 and is making a stellar contribution. Between Wuttke and our Director of Sales, Danny Beard, I believe IDC has attracted world-class and experienced personnel. Between them, IDC brings a wealth of knowledge of packaging and processing – and a lot of passion, to boot. We also have a very strong and involved board that is very supportive of management.

10) The 9/30/10 Quarterly report mentions various partners and potential customers such as Cold Star, Inc., Protica, Inc., Power Packaging, the U.S. Army, and Diversified Foods, Inc. The website mentions a strategic alliance with IDChina, a joint venture between IDC and Sinolink, in marketing The Answer™ throughout Asia. Can you comment about your relationship with these companies, are all of them still intact, are all of them moving forward? Are there any updates you can share?

Cold Star, Protica, Power Packaging, the U.S Army, and Diversified Foods remain involved with IDC – but that is by no means the complete list of customers and potential customers, which continues to grow and evolve. The Sinolink joint venture has been dead for a few years and we don’t mention it in our quarterly reports. However the company did recently announce an agreement with PepsiCo, which I mentioned previously.

We are also very involved with packaging and equipment companies to bring high-speed filling and other innovations to our space. Building IDC is more than selling our widget; it also involves creating a strong and efficient supply chain infrastructure for bag-in-box and stand up pouch packaging. Our little company is an innovation leader. However, due to confidentiality agreements as well as normal business discretion, I cannot comment specifically on things in development, some of which may have legs, some not. I understand that this can be a source of frustration to certain investors, but know that it is also frustrating to me as well. Bringing new technology into the packaging industry involves a long sales cycle, but on the other side of the coin once you’re established it is very hard for anyone to unseat you.

Thank-you Greg for taking the time in answering these questions. We look forward to your continuing progress and wish you great success.

George Pessin, Pennyheaven.com
(Full Disclosure: I am long IDND)

Pennyheaven Top Picks 2011

No Super 7 this year just my top three picks.
Prices reflect close of business 12/31/10.
Best of Luck and Wishing All of You a Very Happy and Prosperous New Year

1) International Dispensing Corporation IDND.PK .45

IDC is a research and development company that develops and manufactures cutting-edge dispensing solutions, and provides expert supply chain and consulting services, to the food-and-beverage and packaging industries. Its flagship product, The Answer® tap, enables aseptic liquid product to be dispensed from a flexible package over time without compromising the safety of the remaining contents, even without refrigeration.

For more information about IDC, please visit http://www.idcdispensing.com

Latest Quarterly Report: 9/30/2010

Latest News: IDC and PepsiCo Sign Agreement for The Answer

2) Vitro Diagnostics VODG .15

Vitro Diagnostics, Inc., dba Vitro Biopharma owns U.S. patents for production of a fertility drug, immortalization of pituitary cells, and a cell line that produces beta islets for use in treatment of diabetes. Vitro’s mission is “Harnessing the Power of Cells™” for the advancement of regenerative medicine to its full potential. Vitro also owns pending U.S. patents for stem cell therapy of cancer, generation of pluripotent stem cells and is continuously developing patentable cell lines and technologies. Vitro operates within a new high tech and regulatory compliant manufacturing, R&D and corporate facility in Golden, Colorado. Vitro manufactures and sells “Tools for Stem Cell and Drug Development™”, including human mesenchymal stem cells and derivatives, optimized media for sustained self-renewal, lineage-specific differentiation and products supporting induced pluripotent stem cell and cancer research. Vitro recently formed a strategic alliance with HemoGenix®, Inc. to jointly manufacture and distribute Lumenesc™ and LumiSTEM™ assays for quality and potency determination of MSCs, ESC and iPSCs.

For more information about VODG please visit http://www.vitrobiopharma.com

Latest quarterly Report: 7/31/2010

Latest News: New Results Reveal Extensive Competitive Advantages of VitroGrow™ Stem Cell Culture Media

3) WebMediaBrands Inc WEBM 1.63

WebMediaBrands Inc. is an Internet media company that provides content, education, trade shows and online job board services to media and business professionals. The Company’s online business includes: (i) mediabistro.com, a leading blog network providing content, career and educational resources about major media markets and industry verticals including new media, social media, Facebook, TV news, advertising, public relations, publishing, design and mobile; (ii) SemanticWeb.com, providing industry leading content on Semantic Web technology; (iii) Brands of the World, Ads of the World, and other related websites, providing industry leading content for creative, advertising, and design professionals; and (iv) e-commerce websites including Freelance Connect and StockLogos.com. The Company’s trade show and educational offerings include conferences, online and in-person courses, and video subscription libraries on topics covered by the Company’s online business.

Latest quarterly Report: 9/30/2010

Latest News: WebMediaBrands Inc. Announces Plan to Repurchase Shares of Its Common Stock

DISCLAIMER, PLEASE READ

Please be advised that nothing within this notice shall constitute a solicitation or an offer to buy or sell any security mentioned herein. All statements made are our express opinion only and should be treated as such. Nothing within this notice should be considered personalized investment advice. Pennyheaven.com is neither a registered investment advisor nor affiliated with any broker or dealer. Any investments in stocks recommended in this notice should be made only after consulting with your investment advisor and only after reviewing the financial statements of the company. We reserve the right to trade in and out of these stocks at will, before, during, and/or after publication. We have not been compensated by any individual or company and we do not accept any paid promotion. Please do your own DD and trade only what is right for you.