Shi- follow the bouncing ball:
- first, a gov. regulating body has to cert. your machine, as to their particular method of use. ( it helps to build the machine around that use, IE- IMSC develops a new swab)
- second, a gov. entity for passenger(US) has to actually have a budget to buy your machine.
- third, you have to beat your competitors, IF, if a gov. rounds up the funds and thinks they have a NEED for your machine.
- fourth, you then go thru the final sales process, the sub.sale of the proto, that which all other units are compared and of course, the process of overcoming admin. objections and then comes the high quality build of mass units and delivery.
While the brilliant zeynoc thinks the local "boy scouts" should be buying ETD units, if only a sales man would call them. Reality, there are few real potential buyers out there. The LIVE TAM today, likely will be the quiet TAM tomorrow. IE, right now DHS is in active upgrade cycle...but it has already published its future method of purchasing: as need develops sans IDIQ. What does that mean? The B-220s that go online, will stay online until a new threat is discovered that they don't uncover OR a better mousetrap product comes along OR TSA's concept of operations changes for ETD meaning it upgrades from a random partial support layer to a full on interrogation layer. ( that is goal on the horizon and the company that gets their first will win) See GE's postage stamp tech. ( the testing for that is going to be horrifically complicated)
I hear this often: go develop a new market. Sure, like where should I start? Where terrorists never strike or where they usually want to strike? Do those people have dollars to commit? IF so, when? The US has been spec'd as about 42% of the worldwide TAM, however, that 42% is cum'd over 3 years. In year one they could be 77% of all units sold but 5% in year two and zero in year 3.
While we think it has taken forever to deliver a buyable product, the truth is IMSC is/was perfect in their timing to US buying cycle AND they beat the competition. Further, IF TSA had told the cargo sector- dump those S-M ETDS, then it would have been a stampede. My sense is TSA calculated that IMSC could not deliver that kind of quantity. Ex-CEO acknowledged such by moving to larger facility and moving production of lower grade ETD machines out of house. Still, at a target vol. of 200 units a month--IMSC cannot currently fill any more demand than it currently has right in front of it for the next few qtrs. And they will not push the platform build out of house. NOT now.
But I do not doubt they will evolve quickly IF they can figure out realistic funding. The stock price will NOT evolve until the invisable dilution ends. I hope they acknowledge that in some manner. Remember, both McGann and Jones can receive 1,000,000 shares each by bringing in new funding to IMSC. If you think about that, it says alignment with retail as it kills ongoing dilution and replaces it with one time dilution while making M/J eager to boost the share price. That's a double positive in my book.
