shiloh- you make a very good couple of points, because in my opinion Smiths and Morpho did pull out the clout stick and use it some six to nine months or so after IMSC passed cargo testing and was placed on the approved cargo list. Read the following exchange from the special April 2013 cc about what is going on in the market re: cargo approval and how it relates to sales. First, let me say this, I for one do NOT believe that Dr. Jones is lying as ceo Bolduc supports mostly what Dr. Jones relates to a caller that sa ids as an analyst. This also mildly speaks to roles of Jones&McGann the nowak has presented:
CALLER slated as Unidentified Analyst:
Right. Yeah. You can call me Your Royal Highness. I have a kind of tri-part question based on the grandfathering of the competitors. Now, that certification that they grandfathered in expires when, September, October, sometime around that time frame?
Dr. Bill McGann - Chief Operating Officer
Let me ask Darryl to answer that question Mr. Sullivan.
Unidentified Analyst : Okay.
Dr. Darryl Jones - Vice President, Global Sales and Marketing:
Yeah, the desktop grandfather clause expires January 1, 2014, so that forces all the cargo companies to make sure that they have ETDs for the trace detection system that are approved and are qualified on the latest list. So, that's one of them, and there is another expiration that happens June 13, 2013 that’s handheld, but there are no handheld systems out there on the qualified list, so it’s really a desktop marketplace.
Unidentified Analyst:
Okay. So have any of the competitors as far as you know tried to get certification based on the standards, and based on avoiding shutdown as of January 1 for them?
Dr. Darryl Jones - Vice President, Global Sales and Marketing:
Now, so let me reiterate a couple of points. We are the only ETD provider at this point that has passed the 2012 detection standard.
Unidentified Analyst:
Right, yeah.
Dr. Darryl Jones - Vice President, Global Sales and Marketing:
Right, if the others are trying to do that, I can say, they probably will try to do that, but we’re the first and the only at this point in time.
Unidentified Analyst:
Yeah. Okay. And, that was my question there. So, we are the only at this time, okay.
Glenn D. Bolduc - President and Chief Executive Officer
To the best of our knowledge Mr. Sullivan, we are the only one at this time. We’ve not seen anything that suggests anybody else has satisfied the 2012 standards. Yeah.
Unidentified Analyst
Okay. That’s critical. Now, Darryl again, this is addressed more to Darryl because he’s out there trying to sell. Have you seen any division of competitive activity, because they don’t have certification, I mean, they have certification, but that’s going to run out soon, has that impacted the competition and the buyers?
Dr. Darryl Jones - Vice President, Global Sales and Marketing:
It’s greatly impacted the competition. We’ve actually – it’s exciting to watch, if you will, because we’ve actually caused the stir in the industry, because now the customers have a choice, they can go for the approved technology with the latest standard, or they can go with the older technology, with the oldest standard.
Unidentified Analyst:
Yeah.
Dr. Darryl Jones - Vice President, Global Sales and Marketing:
And, so it’s great in there, greatly concerned, because they see that the customer lighting up, if you will, when they see our products, especially when we do the demos and the trials. They’ll see our product and when you compare the two, it’s basically kind of no comparison to them. So they have, yes, they have definitely gotten concerned about us.
Unidentified Analyst:
Thanks. The last one, related question is how are margins holding up since we now are the only ones that have met the new standards has that made a difference in our profitability per unit?
Dr. Darryl Jones - Vice President, Global Sales and Marketing:
It’s interesting, because our value prop has – is the thing that selling. It’s not a margin game at this point in time. It’s not a price. Now, let just drive down the price. It’s really, they like the kind of product that we’ve put together. I mean, we have a large touch screen interface, we have automatic internal calibration, rapid clear down, that’s the kind of stuff that’s making them want to buy our product.
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At some point after this cc and before the following two cc's, the tsa changed grandfather status by listing only two of Smith's-Morpho etds to expire on jan.1,2014. The market effectively closed to IMSC's etd as buyers said, if tsa says we can continue to use these products, we are not buying IMSC's newly approved etd unit no matter what.
Possible scenarios:
a. s-m went to tsa and presented a convincing case for keeping their two respective etds on the list
b. tsa did not believe IMSC could meet market demand of thousands and thousands of etds by the deadline so they believed s-m and relented.
c. ceo bolduc had to be the nice guy and not carp out loud while the tsa bus rolled over his toes re: keeping two s-m etds on the cargo list.
d. ( the ihub dominent theory) ceo and cmo bold faced lied about everything they said they knew at that time.
My opinion:
1. only a radically insane set of two individuals who sell to the us gov. would lie to investors on a recorded, sec filed conference call and I do not believe them to be insane nor liars
2. s-m used their collective clout as etd-eds vendors to the tsa and presented a look ahead vision that cast severe doubt upon IMSC's financial position, it's production capability and the ensuing market turmoil that would be created for no good reason. Tsa agreed, they kept the two newest etd units on the list into 2014.
I think a open discussion of what has-is-could transpire is fantastic and truthfully, that is why I am here. So far, this board sounds like an angry lynch mob and I don't believe it serves anyones investment interest. For instance, if you believe in the ceo, you cannot divorce him from his cmo without finding him guilty also. I believe both of them and that is why I still hold shares.
Best of Luck to ALL IMSC LONGS!
