Reading tea leaves based upon these public filings is VERY DIFFICULT. However, we do know the following:

1) The Amendment filed this morning (but approved by the BOD on Monday) with the Secretary of the Commonwealth formally updates the previously authorized share amount to 250M (likely deal housekeeping prompted by Wilkie Farr, IMSC's M&A Counsel).

2) That Amendment reiterates the fact that of the 5M authorized preferred shares, there are only 22500 Series H shares, 21000 Series I shares and 6500 Series J shares.

3) The other Amendment filed on Monday modifying the Series H, Series I and Series J share provisions states that the Board's ability to amend those provisions is permissible since none of those preferred shares have been issued.

4) The conversion price of the Series H shares has been changed from $1090 to $190 (makes no sense that its a typo).

5) Therefore, with only 22500 authorized Series H shares, there can only be $4.275M converted (22500 x $190), rather than the over $24M previously allowed.

6) The 4.99% ownership cap has been reiterated and restated.

A guess as to what this meaans ranges from another extension with PP, a refinancing with another lender, a partnership or a buyout transaction. It does suggest that the lawyers for IMSC are getting the Company ready for a transaction. PP's filings seem to support the fact that its attorneys are doing the same.

The situation with PP has clearly complicated and delayed whatever was going down. However, although its apparently tried the patience of many investors, I believe that development has provided even further assurances that Platinum cannot underhandedly mess with the Company in the course of consumating a transaction. The presence of Wilkie (an excellent corporate firm) provides additional confidence that such meddling will not occur.

So at the end of the day, one has to personally evaluate whether you believe the Company, its technology/intellectual property and market position/opportunities represents substantial value (well beyond .49) as either a stand-alone entity (if unencumbered by current debt) or as an asset of a larger integrator. I continue to believe that to be the case. I totally understand and respect that most folks desire to cash out and move on. However, I personally view the real value of this business to still be one to three years down the road, and, if permitted, I'll happily wait for that payoff.

BINGO BUZZ ... In addition to the buyer's retail shareholders, this type of PR contains fodder for institutional investors, fund managers and analysts who are going to hear the transaction rationale from the acquirer's management, but will feel compelled to do their own corroborating due diligence.

Likewise, although they won't find a photo of General McGann crossing a frozen river, they will find recent references to McGann and Liscouski commenting upon the Egypt Air tragedy, a discussion regarding the expanded use of Implant's products at the Brussels Airport (probably to screen insiders who have access to planes and their contents), and their overview of the importance of ETD in connection with the two "Holy Grails" of threat detection technology - an integrated security tunnel & a ubiquitous handheld screening device.

I had been assuming the slow pace of this process was initially due to competitive bids, and, more recently, to the satisfaction of certain "conditions precedent" (contract awards, government budget announcements, TSA feedback, DMRJ imprimatur), but this PR makes me think that they're likely past those speed bumps and they're likely ready to execute the definitive agreement.

Therefore, I must conclude an ANNOUNCEMENT OF A $550M+ DEAL COULD OCCUR ANY DAY!

SUNNY FOR THE FORESEEABLE FUTURE ...

with a high likelihood of distressed shorts and underweighted investors at sunrise any day now.

$550M+ … CEO’S “LAST VICTORY LAP”

As others have noted, what was not said on this conference call speaks volumes.

Moreover, what was said adds to that drum beat loud and clear.

After reviewing a list of major accomplishments proudly achieved against all odds, McGann describes a company finally “ready to take on the growth challenges ahead”. He then segues to briefly mentioning the “strategic alternatives aimed at fixing our capital structure”. He definitively states that they’re “committed to finding a path to grow profitably and unencumbered”, noting that “we are not done with the process at this point in time”, and, as a result, wants (needs) “to be brief today”. [See Quiet Period]

Then, in the most telltale moment of the call, he feels compelled to thank members of management, the board, lenders and shareholders, describing his comments as a “LAST VICTORY LAP”!!!

Lastly, as an apparent post-script to his victorious pronouncement, he ostensibly apologizes for his historic inability to engage in day-to-day communications with investors, addressing shareholders saying “thank you for your support and stay tuned”.

I don’t know what they’ll ultimately get for the company, but anything less than $550M will be a shame, given their robust patent portfolio, their current pipeline, and all future goals that they’re “finally” ready to accomplish. BM is not the best salesman, but I suspect that Dr. Jones and the investment bankers are leading negotiations, with input from DMRJ (they’ve undoubtedly been “over the wall” for some time).

Bill’s value is in envisioning and corroborating new and expanded opportunities. As an example, during the call he described Implant products recently being used in a “more extensive way” in Europe. Although he and Todd Silvestri were somewhat cryptic in their specific description (no reason to tipoff competitors), it sounds like certain European customers have begun “sampling people aggressively” with ETD units, including Brussel’s Zaventem Airport doing so “beyond the landside and airside interface”. McGann explained that IMSC responded to that challenge/opportunity by creating a new “feature” that apparently has them extremely excited about that augmented product (best he’s seen in his 25 years).

THAT ENHANCED PRODUCT IS A NEW “VERY POWERFUL DYNAMIC SYSTEM”, WHICH THEY’VE BEGUN SHOWCASING TO THE TSA. [Acquiring Party Take Note]

ANYONE SHORTING OR DUMPING SHARES AT THIS POINT DOES SO AT THEIR EXTREME PERIL OR LOST OPPORTUNITY … THIS DEAL CAN BE ANNOUNCED AT ANY MOMENT!

$550M+ ARBITRAGE-LIKE OPPORTUNITY

The tip of their hand indicates that some Major Transaction is likely to be announced very soon.

As others have noted, no company involved in evaluating a strategic opportunity would "cozy-up" with one of the potential strategic partners unless that party had made an "offer that couldn't be refused".

I don't know whether this is likely to be an outright acquistion, but it's at least a partnership, financial infusion or a similarly significant arrangement that should raise the value of IMSC substantially.

Consequently, in my opinion those few in the know have a rare opportunity to get on board anywhere up to $1.50/share in advance of that exciting formal announcement.

$550M+ ... NICE TIP OF THE HAND

Certainly appears as though L-3 is about to play a TRUMP CARD Very Soon!

$550M+ RIGHT ON THE MONEY $$$$$

Rettacs - Couldn't have summarized it better myself. Nice job!

Indeed, only question is how much can this gang get for the golden goose.

McGann and management know what they have, and together with their relationships with TSA and worldwide purchasers, should be able to showcase tech and help financial advisors present compelling valuations. Moreover, now DMRJ wants that to result in MAXIMUM VALUE for their exit.

TR1 - You should know this industry is a small world... my best guess is you're a former Reveal engineer who got tired of working for big old SAIC/Leidos and followed the Pied Piper to newly minted Evolv Technology. In any event, you've got a little knowledge, but as they say, that's often "just enough to be dangerous". BTW - get back to work ... start-ups need full attention.

$550M+ MORPHO SALE BODES WELL FOR IMSC

In my opinion, today's announcement that Smiths has agreed to purchase Morpho for $710M is a good sign. First, it represents the culmination of what appears to have been an almost seven month dance that resulted in a sale price substantially in excess of the initial range rumored at the start of discussions. So, the Buyer appears to have been chasing the Seller, and consequently the Seller was apparently able to extract a higher price over that timeframe.

Secondly, the purcahse price is essentially identical to the original extrapolated basis of Safran when it acquired the business in 2009. Therefore, the "math", as they say speaks volumes. So, Safran was ultimately able to peddle it at a wash, and Smiths courted a ho-hum detection unit, with historically flat growth potential and yet still paid $710M.

During Safran's ownership of Morpho, many established industry players experienced substantial growth, for example L-3 and OSI each more than doubled in value. So, those two competitors, who were also mentioned as being interested in Morpho, are likely still buzzing around.

It's impossible to know for sure, but this scenario seems to bode well for the sale of a pure play ETD growth company with existing technological leadership and a bag of future products/opportunities.

$550M+ A COUPLE OF ADDITIONAL THOUGHTS …

VALUATION FACTORS & METRICS

I appreciate the desire of folks to conduct analyses on potential valuation using standard value methodologies and analytic metrics. However, as others have mentioned, and as I have previously noted, an appropriate valuation of a growth rocket like this is not limited to such analyses. The “bad news” is that shareholders and potential investors cannot do homework that elicits an accurate estimation of value. The “GOOD NEWS” is that without such ability, there is no tight collar on the share price in advance of a potential transaction, leaving significant latitude on share appreciation.

Theoretically, one might ordinarily assume that variability could lead to share depreciation, but, in this case, I don’t believe that it is reasonable to think that this transaction will be consummated at a value at or below recent share prices (see below).

Presumably the ibankers engaged by Implant have long since met with management and have distilled all of the current and potential projections into a package of materials that supports a maximum range of value of the Company. We’re not privy to those projections, but with non-disclosure agreements in place, potential acquirers/partners not only receive them, but are given an opportunity to conduct due diligence underlying them. An example of a component of those projections would be the current CATSA Tender – projections presumably reference and include an amount that embodies the value of that contract multiplied by a defensible probability of Implant landing it.

Serious parties are also likely given non-public information and insight into new products and R&D programs. The valuation of that component is similar to the valuation of small biotechs – even without any revenue from such “products”, acquirers consistently pay significant prices for promising candidates/R&D substantially before final relevant regulatory approvals.

So, without the ability to peek into the tent, what are we left with? In addition to the motivations referenced below, I’d suggest that McGann’s $800M potential value mentioned in a recent conference call might be a data point. Likewise, as I previously noted, Safran’s original 2009 basis in Morpho of $716M may also be indicative of a value target. Obviously, there’s no guarantee that an acquirer will be willing to acknowledge and pay that – and closing a deal will depend on a variety of other factors.

DMRJ MOTIVATION & ALIGNMENT

Apparently the Company’s lawyers woke up and caused it to clarify and highlight information regarding conversion rights and specifically the ownership percentage of creditors on April 12th. Once I saw that, I considered whether DMRJ, with its controlling interest, could or would steer this into a “dark place” for other shareholders. My conclusion is that theoretically they could, but that practically and realistically they wouldn’t. As a result I think their interests still align relatively nicely with ours, although I now believe that they’ll “influence” a sale rather than a partnership since my guess is that they’d prefer to get their bonanza out today rather than several years down the road.

DMRJ and affiliates are not beyond playing hardball with their investments, as others have noted, and as we’ve gotten a clear glimpse of with Implant. They historically stepped in to float the Company, but have nurtured this “golden goose” in a manner that has exponentially increased their stake in its fattened potential. Now, when the opportunity of selling the gilded fowl presents itself, they should want to maximize that price without killing or wounding said goose. This bodes against some machiavellian attempt to steal the Company or otherwise fleece shareholders (they appear to have already extracted an additional pound of goose flesh in exchange for the current extension).

In addition to the problematic liability that would likely accrue to management*, the board and their advisors, I think the likely ramifications to DMRJ would be substantial and overwhelming. As we know, the homeland security business is substantially driven by the TSA domestically and other government agencies around the world. Consequently, any underhanded attempt to mess with the ownership and disposition of this Company I believe would cause the TSA and other agencies to step away from Implant, thereby killing or severely harming the golden goose. Another fore-check is the strong likelihood that the SEC would take notice in a manner that certainly would not bode well for DMRJ.

So I’m left with the fervent belief that DMRJ will proactively push for a sale at a maximum share price, well north of their highest priced $1.18 options. They’re smart folks, have a big stake already, and understand that the market for flipping this Company is non-existent. They’ve also disclosed in their recent 13D filing that they’re likely communicating with those inside the tent in a manner that a major shareholder or activist might do to enhance and/or maximize shareholder value.

[*Additionally, presumably Bill McGann’s professional reputation and net worth are both substantial enough for him to give significant priority to his continued legacy in the industry, such that giving this Company away or allowing it to be stolen would be completely unacceptable.]


SELLING PRESSURE

Although I’ve been modestly surprised at the apparent number of sellers that has allowed the initial share price appreciation to stall, my guess is that it’s due to the following:

• Flippers that previously purchased shares in the .20s and .30s over the past few months. Given the low share price, it doesn’t take much of a differential to represent a worthwhile return. That traunch of traders appears to have begun to dissipate, and hopefully may disappear soon enough.

• Market makers looking to keep trading volume churning by capping share price movement and by otherwise controlling/manipulating this “under the radar” stock. I’m not that familiar with the OTC Market, but a colleague who is advises that the ability to do so is quite significant, particularly with stocks that have nervous shareholders that are susceptible to the feints, swings, naked shorting and bear-raids that apparently are the standard tools of manipulators. He also commented that in this situation where the expectation that this money machine may now have a short half-life, the manipulation may be exacerbated, at least until that market maker believes it is in their interest to let it run higher.

• Lastly, an interested private equity fund or other potential acquirer might attempt to keep the lid on the share price for negotiation purposes. I’ve only seen this on occasion, but once again, I understand that such activity can be accomplished much more readily without attribution with a pink sheet stock.


IN CONCLUSION, THIS APPEARS TO BE A SAFE SHARE PURCHASE UP TO $1.50. MOREOVER, I CONTINUE TO BELIEVE A VALUATION IN EXCESS OF $550M IS ACHIEVABLE AND A SHARE PRICE OF AT LEAST $3.00 IS HIGHLY LIKELY.

$550M+ DO NOT GIVE THIS COMPANY AWAY

I’m an Executive/Finance Professional with experience in the homeland security industry. I rarely participate on MBs but this situation is uniquely compelling. However, I apologize in advance for the length of this post. I’ve been invested for over 6 years – with a very substantial position averaged @ .42.

Given my knowledge of this industry, I arrived with quite a lot of patience. Nonetheless, even I have been surprised and frustrated with the many delays, speed bumps, hurdles and miscues that have thwarted this Company and its product development/sales. An avoidance of a modest percentage of those inhibitors and Management presumably should have long since been able to clean up its capital structure and the Company would be on the Nasdaq market with an unencumbered future.

The GOOD NEWS however, is that the door to that future now appears to finally be open.

As everyone knows, the optimization of value for sellers in corporate transactions is keyed to “inflection” points. Personally, I’d rather see the Company pursue a Partnership arrangement whereby current shareholders could directly and maximally participate in the enormous upside over the next several years. In my opinion, an outright sale, which appears to be where this is headed, will yield a substantial return, but because the best value inflection points are still down the road, that return is likely to be discounted.

I also believed that locating a “big-boy” partner that could have bought-in and refinanced the debt should not have been that difficult, given the Company’s TSA contract and global market success. However, Safran apparently put its Morpho unit in play last September. That may have prompted Implant’s Management and BOD to broaden their exploration of strategic options, including a sale/merger.

Smiths purportedly is now interested in acquiring Morpho at a published potential price of approximately $550M.*

[*Late last month, it was reported that Smiths was “bidding” for Morpho. Supposedly Safran was not interested in a divestiture, but was approached by an unsolicited buyer at the end of last summer. Safran then hired Goldman Sachs to explore options. Remember, in 2009 Safran acquired an 81% interest in Morpho for $580M, which equated to an aggregate value of $716M for that business.]

VALUATION FACTORS

In my opinion, Implant’s Management/Board/Advisors will have failed if they don’t achieve a valuation of a minimum of $2 - $3 per share. Given the robust market for security assets and the following leverageable potential, a more reasonable value should be $3 - $4 per share: *

•Elevated Focus on World Terror Threats and Events

•Increasing Emphasis on Global Explosive & Narcotics Trace Detection Technology Needs

•Implant’s Hard Won Market Leadership Position

•IP Portfolio with Impressive and Extensive Existing Patent Protection and Multiple Pending Applications (~$250M+)

•TSA Relationship & IDIQ Contract ($162M)

•International Track Record/Dominance, plus Near-Term EU, CATSA, Mexico, Prison, and Asia Pacific Expansion Opportunities (~$40M+)

•Product Pipeline Potential – Handheld Software Update, Ion Mobility Spectroscopy and New Handheld, including DHS Funded Next Generation Development Opportunities

•Net Operating Losses (~$100M)

•Networking/Integration Product Opportunities

•Extremely Lean Organization/Overhead/Staffing Structure

•Founder of ETD Tech, and Motivated Management and Science/Technical Team

•Ease of Organizational Integration (just remove “debt yoke” and add a bit of working capital, marketing and integrated product opportunities)


[* A Partnership facilitating SP appreciation, Nasdaq listing and an optimized inflection point might reasonably lead to $6 - $10 per share within the next 12 to 18 months]


OTHER VALUE DRIVERS

•There are many potential suitors, including, but not limited to two large players within spitting distance of Implant in Massachusetts – L3 and Raytheon, as well as private equity funds looking for investments with a healthy score during a three to five year timeframe.

•The acquisition of valuable, revenue-producing, OTC/small cap targets is not governed by industry premium standards, but rather by individual enterprise valuations, with a particular emphasis on perceived future potential.

•TSA would be very supportive of any positive development regarding the Company’s financial profile – the reduction/removal of exorbitant debt and improvement to its balance sheet.

•Everyone, including current Implant fiduciaries, knows that the IMSC share price has been artificially and circumstantially depressed/manipulated, and is well aware that around the time of the TSA contract award, the stock traded in the $1.75 - $1.80 range.

•The peddling and potential sale of Morpho, a lesser competitor that has been rejected twice by the TSA (during the contract award process and the subsequent failed protest), will serve as a data point, competitive gauntlet, as well as a negotiation and value driver for options available to Implant.*

•Glenn Bolduc’s historical comment regarding a potential sale for at least $500M was not merely “pie in the sky” dreaming, but, in my opinion, a reasonable calculated strategic objective geared to the achievement of much of the potential the Company currently has within its grasp.

•Platinum/DMRJ have a well known reputation for being very astute and aggressive with respect to investments, which bodes toward their support, encouragement, and probably insistence, that Management and the Board obtain maximum value for the Company.

[*Although I no longer have the kind of industry information access I once enjoyed, I can confidently state that industry members know exactly what each other are up to, and predictably respond accordingly. Goldman and Safran’s activities during the past six months have not gone unnoticed and have likely had a significant impact on Implant’s options/discussions – my guess, in a highly beneficial manner.]

For the first time in “forever”, management, creditors and all long-oriented shareholders are finally aligned with an interest in getting maximum current value for this Company … HOLD ONTO YOUR SHARES & DO NOT SETTLE FOR LESS!!!