Italy Orders $3.3 Million of Drexler Technologys LaserCard Optical Memory Cards

Drexler Technology Corporation has received an order valued at $3.3 million for LaserCard optical memory cards slated for use as Italys new national ID card, called the Carta dIdentita Elettronica (CIE), bringing to $9.5 million the value of orders received under Phase 2 of the CIE program since July of last year. Deliveries under the new order are scheduled to be completed by July 2004. With this order, the backlog for CIE cards scheduled for shipment by July 2004 now stands at approximately $4.7 million. The Company has delivered optical memory cards valued at $4.8 million under these orders since CIE Phase 2 shipments began in November 2003. The $3.3 million purchase order was placed by Laser Memory Card SRL, of Rome, Italy, a value-added reseller of Drexlers optical memory cards. The distribution of the new national ID card, which is in an early stage of implementation, has started in a number of the 56 Italian communities scheduled to be activated under the program during 2004, according to Italian government sources. The governments publicly stated plan to issue up to two million cards this year will put Italy at the forefront of European countries in terms of providing their citizens with secure, durable ID documents. The Italian Ministry of Interior, which is ultimately responsible for the program, sponsored an international conference, entitled "The Italian CIE Experience: European Interoperability for Traveler Identification and Citizen Authentication in Network Delivery of Services," held in Rome on April 16, 2004. Some of the principal topics under discussion were: lessons learned during the early phases of the project, security issues related to a widely distributed issuance process, and the flexibility of the cards use in secure travel ID and European Union citizens service provision. The second day of the conference included a visit to the Tuscan community of Prato to see the local CIE enrollment and issuance processes in operation. The CIE is built on a LaserCard optical memory card platform, which includes a 1 megabyte optical stripe, to which a contact IC chip is added in Italy. The optical memory provides visual and automatic card authentication; a non-alterable audit trail of events (each digitally signed) in the card manufacturing, registration, activation, distribution, and issuance processes; a portable data "vault" containing each citizens demographics, color photograph, digitized signature, and other biometrics; and back up should the chip fail.