After more than eight years at the helm of Physical Sciences Inc., George Caledonia has retired from PSI and Dr. Byron David Green was elected President and Chief Executive Officer of the company. Also in this issue, the PSI Technical Achievement Award were recently presented in recognition of some of the company's most important technical accomplishments during the past year.

This issue of the PSI newsletter offers several examples of how we have successfully transitioned Small Business Innovation Research (SBIR) technology beyond Phases I and II. In Phase III, a government agency or the private sector provides program funding to further develop the technology into a commercial product or service. A decision to do this implies a strong commitment to incorporate the product into a system or business, and provides further validation of the SBIR process.

PSI not only exploits the latest developments in the material sciences; we are actively involved in the creation of new materials for hypersonic vehicles, electronic and electro- optical devices, ultra-strong structures, and advanced power sources. The development of new manufacturing processes to enable cost-effective production is a critical aspect of these projects. In this issue, we highlight just a few of these exciting activities.

In this issue, we highlight PSI's recent external and internal awards. Of particular importance to PSI staff scientists are our Technical Achievement Awards, in recognition of extraordinary scientific and engineering accomplishments in the past year.

PSI has a well-earned reputation for innovation, advanced technologies, and development of commercial products. In this newsletter, we highlight the world class basic and applied research underway in our laboratories. The examples we have selected illustrate the application of optical instrumentation, a core strength of the company, to cell biology, opthalmology, and chemical detection.

This issue of the PSI newsletter highlights PSI technologies that have reached an advanced state of development, permitting their transition into a diverse set of products, applications, and markets. Our commercialization approach employs a strategy tailored to the specific commercial opportunity.

It has been an annual tradition at PSI to present Technical Achievement Awards to a few members of our technical staff in recognition of either one extraordinary accomplishment or a lifetime of them. In addition to internal staff awards, this issue features an important external recognition by the Research and Development Magazine's R&D 100 Award.

Exciting new activity at our San Ramon, CA laboratory that exploits nonlinear optical conversion technologies for the generation of laser light from the visible to far-infrared wavelengths. These efforts are closely integrated with system development activities and experimental programs at our Andover, MA facility.

Physical Sciences Inc. has devoted this unusually lengthy edition of the PSI newsletter to a survey of our rapidly growing research and development activities in the fields of medical and biomedical diagnostics. While the company has a long history of contributions to medical technologies, starting with studies of laser-tissue interactions and elimination of kidney stones with micro-mechanical devices, we have only recently exploited our full capabilities in biophotonics.

An annual tradition at PSI is the announcement of Technical Achievement Awards to our scientists and engineers who have made extraordinary contributions to our customers and in their fields of research during the past year. This year’s awards are for contributions to missile defense, chemical laser development and advanced battery technology. We are very proud of the recipients and the honor they bring to our company.

Physical Sciences Inc. is a highly diversified and capable research and development company. However, we have recognized that it sometimes makes sense to acquire a capability rather than develop it internally. This has happened twice in our corporate history, with the acquisition of Research Support Instruments in 1990 and Q-Peak in 2001. In both cases, PSI had collaborated with these companies on major government-funded programs, and they continue to make significant contributions to PSI's growth.

Homeland security is now receiving the attention and resources appropriate to a national priority. New technologies and systems for the detection, prevention and mitigation of terrorist attacks are needed, and organizations such as the Homeland Security Advanced Research Projects Agency have been established to develop and deploy them. Physical Sciences Inc. has been involved in research programs affecting homeland security for some time, and this newsletter summarizes several successful projects.

Physical Sciences Inc. places a high priority on publication of its research. We do not consider a project complete until its results have been documented and made available to our sponsor and, when appropriate, to the scientific community. It is especially gratifying, then, to have some of these publications recognized with significant awards, as reported in this newsletter. PSI also announces its Achievement Awards for outstanding technical contributions.

Physical Sciences Inc. has expanded steadily over the past thirty years, becoming exactly what the founders envisioned: a broadly capable contract R&D organization that provides value to its customers, growth and satisfaction to its staff, and reasonable rewards to its employee-shareholders and investors. PSI recently celebrated its thirtieth anniversary with an open house for business associates, friends and relatives.

Homeland defense has become a major national priority, and the science and technology community has been mobilized to provide some of the answers to this complex challenge. PSI has a long history and distinguished background in missile defense technology.

PSI has recently formed the Marine Systems Enterprise to provide a focal point for ongoing programs in marine instrumentation and systems development, and to establish new initiatives in wideband sonar systems research.

PSI Medical Technology's mission is to conduct government and corporate sponsored R&D focusing on technology development for emerging medical device applications. For over a decade, our activities have ranged from developing physical models of medical laser/tissue interactions to developing innovative electro-optic and electro-mechanical medical devices and instrumentation.

PSI believes that a research and development project is not complete until its accomplishments are shared with the technical community.