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It feels good right now. As usual,
summer was tough. For microcap investors, this is our time. The Fall. Here's
how I know it's Fall. ESPN's Chris Berman's signature call "HE
COULD GO ALL THE WAY" is heard every Sunday morning in his NFL
broadcast. And, our stocks are beginning to wake up. Fresh off huge success
we now have TTGL cranking up, and NIHK could be starting
another of its breathtaking runs. It's our time. Anyone of these stocks
GO ALL THE WAY".
Today's new idea could go all the
way. For the TSA (Transportation Services Administration), and its
$5 billion annual budget to keep our air travel safe from terrorists, it's
all about doing it safer, faster, and cheaper, with safer
being the most important on the list.
The company you are going to read
about today has one answer. First and foremost- their technology does it
safer- it is simply better at detecting explosives, chemicals, and other
potentially terrorist related weapons. Secondly and perhaps just as important,
their technology does it cheaper and faster- it will save the TSA
money, and get people through security faster. Sounds like a win/win for
Read On McDuff:
BB: TCGD): Doing It Safer, Faster, and Cheaper
Is this the next CMVT before
anyone knows about it? $3,000 turning into $4.2 million in 12 years on
the theme of commercializing Israeli military technology? Could be. It's
a pre revenue idea, so it's risky. However, they have very exciting technology.
Here's what I find exciting- the size of their market.
If you believe terrorism is just
a passing fad and the world will be at peace in pretty short order, don't
bother reading on. However, if you believe that middle eastern fanatics
still represent a threat through our air travel and cargo delivery industries,
you need to take a look at TraceGuard Systems (TCGD).
This is an easy story to understand.
If you have traveled on a commercial flight in the last six years you've
been through security, and you know it can be better.
CompactSafe Device: Better, Faster, and Cheaper
Here's the problem- explosive swabbing.
Sometimes your carry-on luggage simply goes through the X-Ray machine and
done. Sometimes, they see something that requires further examination.
A TSA employee takes it, opens it, swabs it for explosives, tests the swab,
closes your luggage back up, and hands it to you. This can take anywhere
from 5 to 10 minutes if the security personell are good- longer if they
are inefficient. Swabbing is performed on checked luggage at smaller airports
that don't have sophisticated screening devices.
You are looking at an image of TCGD's
CompactSafe device. It's a stand alone unit that simply wheels into
place anywhere you want to put it. All you have to do is plug it in.
With this device, the TSA
employee simply puts your luggage, brief case, electronic device, or whatever
in the CompactSafe unit, and hands it back to you in a few moments.
In total, the whole process only takes 45 seconds from the
time you hand over your property to when it is handed back to you, vs the
current cumbersome 5 to 10 minutes with a hand held swab.
The CompactSafe shakes it
a little, vacuums the air, collect molecules, and analyzes the contents.
Nothing needs to be opened. When the right buttons are pushed, there is
no possiblity of human error. It is completely non invasive, and it can
look inside electronic devices for explosives and/or chemical weapons.
There are four different versions
of the device- one for hand held devices, carry ons, checked luggage, and
Yes- but how do we know it works?
Again- let's look at the Israelis. Today, post close, TCGD announced
it has just completed a second pilot progam of CompactSafe at Ben
Gurion Airport in Israel. Ben Gurion is widely recognized by
the International security community as the most secure airport in the
world. You couldn't get a mouse into Ben Gurion without a complete
According to the release, the system
was tested on over 4,000 passengers. Performance and durability
were both tested, and according to the company, all perfomance goals were
met. Next step: Israeli and US final approval for use in airports and other
screening points, at which time TCGD can start taking purchase orders.
Given that it's better and less expensive
than swabbing, what's the value proposition? Here's the results of an independent
study conducted by Jacobs Consulting. If the TSA were to purchase
CompactSafe machines, it would save US Taxpayers $80 million
annually, and allow the TSA to have 4,000 less screeners
on its payroll. At $50,000 per unit, a $45 million investment
double in the first year, and pay huge dividends down the road.
In addition, there is the intangible
benefit of speeding up security checkpoints. This is a huge benefit to
taxpayers and airlines alike.
Think this technology might eventually
attract some attention? It's already happening. The CompactSafe
was the subject of a special report from a local NBC affiliate in Florida.
Just Click Here
to watch or go to the following URL:
It gives you the whole picture in pretty
Cat's Out Of the Bag
Looks like the cat might have jumped
out of the bag a little prematurely, as the stock had its first good day
in many months. Perhaps some of you guessed from my clues in the last few
editions. Or, perhaps word of today's news on the results from the Ben
Gurion pilot program slipped out.
Today's action should be a mere blip
on the long term landscape of a very exciting story.
Time to look at the cap structure
and the technical picture. First- the cap structure- there are about 38
million I&O fully dilluted, leading to a market cap of $30 million
based on today's close.
The company has $2.6 million in cash,
which easily carries it for a year, and here's how they got the funds.
Raising money at $.70 per unit, the unit consisting of 1 share of common
and 1 warrant that converts at $1.50.
Here's the benefit to you: You can
own this stock in the $.80 to $.90 range by simply accumulating
in the open market. Buy and sell anytime you want. Those who put millions
in at $.70 have to wait a year under Rule 144 to be able to sell
any, and there are no registration rights. Compared to where it has been,
the stock is on sale right now.
The chart shows the trading history
of the stock. As you can see, in '06 it made a high of $2.10, and
is far closer to commercialization now. After making a nice move into the
range in Q1, the stock has been quiet and trading sideways in the $.70
range for some time.
Today's little surge takes us out
of the "perfect" level, and adds a small element of short term risk. Over
the long term, it's meaningless. If they sell 900 of these highly advanced
machines to the TSA, it won't matter if you own it at $.70, $.80,
or even $1. You are likely going to make a lot of money.
To that end, I suggest taking an
opening position immediately, with an eye towards adding to your position
if the stock pulls back a little. If it continues surging, at least you
will own some.
If you are risk averse, and don't
believe airport security and terrorism are big issues we face, this idea
is not for you. However, if you believe we do need to secure our airports
and our borders more efficiently, this idea is for you in the speculative
end of your portfolio.
Epiphanal coming events that could
send the stock higher? Glad you asked. The company feels it could get approval
to start marketing the technology in Israel before the end of the year.
How about marketing/distribution agreements with major players in the security
industry? No one has anything like their technology, so that sort of thing
could be in the works.
Bottom line- in light of today's
action, take your initial position immediately, and be prepared to add
on pullbacks if you like this idea. Think of TCGD everytime you
watch a piece of luggage get swabbed at airport security.
Here is the complete text of today's
news for your review:
|Press Release Source:
TraceGuard Technologies Inc.
Second Pilot Program of CompactSafe(TM) System at Ben Gurion Airport
Monday October 15, 4:00
Company reports additional successful
operational test of system for screening complex items at Israel's major
NEW YORK--(BUSINESS WIRE)--TraceGuard
Technologies Inc. (OTC BB:TCGD - News), a developer of technologies and
solutions for improving explosives detection, announced today that it has
completed a second pilot program of its CompactSafe(TM) system at Ben Gurion
International Airport in Israel.
In the course of the
pilot program, CompactSafe(TM) was operated by Israel Airport Authority
(IAA) personnel, who own and operate security equipment at Ben Gurion Airport,
in several screening locations at the airport. Over 4,000 passenger items
were screened by IAA operators with the CompactSafe(TM).
The objectives of the
pilot program were: to demonstrate the effectiveness of using an automated
screening system, to verify CompactSafe's performance and durability in
a realistic operational setting, and to better acquaint the personnel of
the IAA with CompactSafe(TM) and its capabilities. Earlier this year, TraceGuard
completed a pilot in which its personnel had operated CompactSafe(TM) at
Ben Gurion with the permission of the IAA.
complex items at passenger and baggage screening checkpoints, and works
in conjunction with security equipment currently in use to improve accuracy
and efficiency in detecting explosives. The system is specifically designed
to extract traces of explosives from items such as laptops, electronic
devices, shoes and similar size items that are carried in the carry-on
luggage, and can also be adapted to improve detection for narcotics and
other hazardous materials.
"The Israel Airport Authority
is pleased that TraceGuard has completed this pilot program of CompactSafe(TM)
in conjunction with security authorities at Ben Gurion Airport. CompactSafe(TM)
has met TraceGuard's expectations in terms of the goals defined together
with IAA at the outset of this pilot program to demonstrate the system's
durability, operational performance and ease of use. The IAA is examining
increased use of automation across Ben Gurion, and CompactSafe(TM) promises
to help improve security and operational efficiency through an automated
process," said a senior IAA official.
"TraceGuard is very proud
to have completed this second pilot program at Ben Gurion Airport with
the cooperation and participation of the Israel Airport Authority. Ben
Gurion is one of the most respected airports in the world, and it is an
honor for us to be given the opportunity to demonstrate CompactSafe's capabilities
with the IAA in this important and unique location. We believe that CompactSafe(TM)
offers a unique solution to improving explosives detection, one of the
critical challenges in aviation security today, and we are confident that
this demonstration will resonate both in Israel and beyond," said Dr. Ehud
Ganani, Chairman and CEO of TraceGuard.
develops innovative security technologies and solutions for enabling explosives
detection through automated trace extraction. By advancing the efficacy
and efficiency of trace collection, TraceGuard's product suite offers dramatic
improvement in explosives detection capabilities for aviation and homeland
security authorities worldwide.
TraceGuard is a US public
company traded on the Over-The-Counter Bulletin Board (OTC BB:TCGD - News).
TraceGuard maintains a Research and Development Center in Tel Aviv, Israel
and has a Sales office in New York. For additional information on TraceGuard,
please contact TraceGuard at 1 866-401-5969 or visit www.traceguard.com.
Some of the statements
in this press release contain forward-looking statements that involve risks
and uncertainties. You can identify forward-looking statements by words
such as "may," "will," "should," "expect," "plan," "could," "anticipate,"
"intend," "believe," "estimate," "predict," "potential," "goal," or "continue"
or similar terminology. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including, but
not limited to, the risks outlined in our filings with the US Securities
and Exchange Commission, that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different
from any future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. For example, risks
that could cause actual results to vary materially from future results
include, but are not limited to: our lack of an operating history, issues
related to intellectual property infringement, issues relating to the introduction
of our products in target markets, the need to raise capital to fund operations,
our dependency on key personnel, approval of our products by regulatory
authorities, matters related to the location of our operations in Israel,
the extent of competition; technological developments in our target markets
and the development of alternate, competing technologies in them; and sales
of shares by existing shareholders. Although we believe that the expectations
reflected in the forward looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Chief Financial Officer
David Ben-Yair, +1 866-401-5969
and Business Development
Eric Leskly, +1 866-401-5969
Source: TraceGuard Technologies