April 25, 2003
Volume I, Number 4

Bridge Semiconductor Corporation - Infrared Imaging Technology

Founded in 1997, Bridge Semiconductor (formerly On Guard Systems) is a local company that specializes in developing high performance, mixed-signal, semiconductor devices.

Recently, Bridge has patented a breakthrough technology that results in an 85% reduction in the manufacturing cost of infrared imagers from current production methods. In addition to patent protection, the complex nature of their discovery makes reverse engineering of the process a virtual impossibility.

The marketing strategy is to target OEM customers in each market segment. Initially, three primary markets are targeted to be developed over the next several years:

• Firefighting – 2003
• Security and Surveillance – 2004
• Driver Vision Enhancement – 2005

These markets were chosen because they are price sensitive, they have the potential to demand large quantities, and all three markets would utilize the same basic platform technology. In the firefighting market, they have already attracted significant attention and interest from three of the largest manufacturers of infrared imaging cameras: Bullard, Scott Heath, and Safety and Mine Safety Appliances, which represent 70% of the total U.S. market.

When Bridge was introduced to Gateways in October of 2002, they were completing testing and de-bugging of their alpha prototype design. Their plans were to move into the beta-test phase, which would last through Spring 2003, when they expected to attract venture capital financing. Their immediate need was an infusion of $600,000 to fund operations through the beta testing cycle.

Being duly impressed with the technology, management team, and market potential, Gateways presented the opportunity to our network of mentor advisors. Three of them made an investment in Bridge, which Gateways matched, thus closing the funding gap to complete this interim round of “bridge” financing. Subsequently, the SAS Investors Fund offered a term sheet for a $3 million preferred stock round, which is expected to close in May.