One-Time Pad Encryption With No Pad?

thepooleboy writes: "The Globe and Mail has an article about a Toronto area company that has perfected 'Unbreakable Encryption' using the Vernam Cipher." The idea is to use as a one-time pad a large number generated by equations sent with an initial (proprietary) exchange which takes place when users connect to an equipped server. Since real one-time pads' numbers are by definition random and known in advance to both sender and receiver, though, the company seems to be playing fast-and-loose with their terms.