From their Website
HOMELAND SECURITY GROUP INTERNATIONAL
PROTECTING FREEDOM’S WARRIORS
November 30, 2006
To Our Shareholders:
Let me start by thanking each of our shareholders for your loyalty and faith in our
company and our goals for securing the safety and lethality of our forward deployed
troops and first responders here at home. Without your continued support, we would not
be able to continue the fight.
This letter is the first in a series that I intend to publish on the website to keep the
shareholders up to date on company progress. As you know, we only issue press releases
when we have substantial news to report. I plan to continue this practice thereby limiting
the amount of “fluff” that is perceived from too many press releases going out.
As you are aware from our recent press releases and interviews I have conducted on air,
we have streamlined our product line and re-focused on our core business. We
manufacture and sell combat trauma bags and load bearing equipment. Our current
strategy is to focus on the sale of the Combat Trauma Bag and its variations to the US
Military and to first responders here at home. The CTB has experienced widespread
acceptance throughout the military medical community and we have designed user
specific variations for the Special Operations forces and also the US Army. We are
starting to see the fruits of our labor as prime vendors are beginning to order the TC3V1
for the Army Medical Material Command. We have recently received a purchase order
for 1000 TC3V1s and expect an additional order in the size of 5000 bags shortly.
We are also re-focusing on lightweight ballistic armor. Our manufacturing partner has
just informed us that we now have level IV certification through HP White Laboratories.
This is a significant event which allows us to re-visit the issue of lightweight ballistic
armor with the military. The fact that we were not allowed to participate in the sale of
ballistic side plate carriers in the last solicitation stemmed directly from our lack of level
IV certification. We are now back in the fight on that front and will be scheduling
meetings with lawmakers on Capitol Hill to show them that we have a solution the troops
are looking for. A large company may have won that contract, but that does not preclude
us from selling a better product.
We are totally ecstatic about the Neptune EBD-1 and its son, the EBD-2. I am a former
combat diver and I will tell you that this product is the best thing I have seen in the diving
industry in years. Its uses are many ranging from emergency egress to emergency
response uses for Public Safety Divers to recreational use by scuba enthusiasts. I am
expecting delivery of prototypes this week and have already made liaison with military
and civilian divers who can’t wait for this product to hit the streets. In addition to official
testing agencies, I intend to personally test this device.
We have also been in contact with the US Coast Guard and they are also pushing for the
arrival of the new unit.
My goal is to position Homeland Security Group International as a major supplier of
security equipment and supplies to the US Government. I am convinced that the company
will prosper in the near future if we stay on track and remain focused on or core
business. Sales of products through our various Joint Venture Partners and other
opportunities will provide us with the working capital required to support our main
effort, bags. We have the potential for unlimited growth in a market that is expanding on
a daily basis. With the growth of our company, our value will increase and our stock
price will benefit from our continued efforts. At the present, our stock price is much
undervalued and I believe this stems from the lack of major contracts and the fear that we
will participate in a reverse split. I can assure you that we have no current plans for such
an action and I would have informed the stockholders immediately if such thoughts were
occurring. I also believe that the shareholders are concerned about the number of shares
outstanding. I am committed to reducing the number of shares outstanding and have
explored numerous methods for accomplishing this. The first way is to buy back stock as
our cash flow increases. We are seriously considering this option. We will keep the
shareholders informed of plans to reduce the number of shares outstanding.
The best way to increase our stock price is to increase sales of bags, ballistics and bottles
and show a profit in our financial reports. We have taken steps to accomplish this by
expanding our board of advisors to include two marketing giants. Mr. Doug Scott and
Mr. Greg Knyper are both hard at work getting our products before those with the ability
to purchase them.
Many shareholders have requested information concerning our joint venture agreements
and the structure of profit sharing arrangements we have signed with our partners. We
will not disclose the specific profit agreements so as not to tip our hand to current and
potential competitors. I will tell you that each of our agreements is very favorable
towards our company and all are will above market standards.
I feel we can all be proud of the accomplishments we have made in the short period that
we have been in operation. Although we are still learning, we learn fast and we may
make mistakes, but we don’t make the same one twice and we are continuing to progress
at a fast pace. Once we have gained ground, we keep it. That’s the way you win a battle.
Once again, I would like to thank our shareholders for their continued loyalty and I see a
bright future for our company and our stock.
Jeffrey A. Powers
CEO
Homeland Security Group International
