In late June Iatia signed a $2,700,000 contract with the Defence Department's Defence Science and Technology Organisation (DSTO) and received an upfront fee of $492,000. This Capability and Technology Demonstrator (CTD) contract is the largest announced by the Department under its current round of CTD activities.

Iatia has completed the first milestone in the contract by delivering a Scoping Document and has received another payment of $135,000. This Scoping Document outlines ISTAR (Intelligence, Surveillance, Target Acquisition and Reconnaissance) requirements and applications for QPI, and other envisioned algorithms. These are initially based around providing a more complete image using all the information imprinted on a wave (brightness, colour and phase) during interaction with the target. The milestone also entailed assembling a contract team and establishing preliminary test facilities.

Defence represents a new field of application for QPI. It utilises conventional digital imaging capability, and produces a new image based on shape information alone that is independent of the image provided by colour and contrast. This image is then suitable for further processing by conventional imageenhancement, image-processing and image-recognition software. The potential uses include passive ranging, shape imaging, defeating camouflage, and in developing novel image processing algorithms. Iatia is now developing a reflection-based algorithm suitable for extending shape imaging to greater distances. This algorithm will expand Iatia's current understanding and application of QPI.