Secure Point Technologies Inc (fka IMSCQ)

[Imperial Whazoo]

Here's the deal:

The relevant document is: "TSA Air Cargo Screening Technology List (ACSTL) Version 8.4 as of 01/31/2013"

There are two categories: Qualified Technology & Approved Technology.

Implant is under "Approved Technology"

Here's the difference, taken from the TSA doc itself:

Qualified Technology

specifies equipment which has undergone a formal TSA sponsored test process and is deemed qualified for screening operations. When procuring equipment from the ACSTL, regulated parties are encouraged to select equipment from the qualified technology section.

Note this in particular: "When procuring equipment from the ACSTL, regulated parties are encouraged to select equipment from the qualified technology section."

Approved Technology

This equipment has up to 36 months from the date when it was added to the approved technology section to successfully pass TSA's suitability based field test activities. If it is unable to pass field test activities within the prescribed 36 months, it will be removed from the Approved Technology section at the prescribed expiration date. Due to this fact, regulated parties who procure equipment from the approved technology section do so at their own risk.

Again, note this: "...regulated parties who procure equipment from the approved technology section do so at their own risk."

The QS-B220 is for Explosive Trace Detection (ETD) and it is one of only three Qualified or Approved products for EDT.

The other two products are these:
Morpho Detection's Itemiser DX & Smiths Detection's Ionscan 500DT

Each of these made the list on 08/24/2010, and they are both categorized as "Qualified Technology".

Since the newest product (Implant's) is not yet on the "Qualified Technology" list, the problem that being only on the "Approved Technology" lists presents potential buyers is that:

1) The TSA specifically "encorages" that procurement be from the "Qualified" list

2) and it specifically notes that anyone procuring from the "Approved" list does so "at their own risk."

So here is what needs to be decided by each person looking at buying this stock: How much impact will this have on sales?

To answer this, consider two things:

1) both of the products on the "Qualified" list were added to that list on 8/24/10. Thats nearly 3 years ago.

2) The Implant QS-B220 is superior in three very important ways. These are disclosed in this link:

http://www.gsnmagazine.com/node/28260?c=airport_aviation_security

Here is what is relevant from that link:

The QS-B220 features several technological breakthroughs:

<1> No radioactive source -- In place of radioactive materials commonly used in ETD systems, Implant Sciences invented and patented a non-radioactive ion source. As such, there are no licensing requirements, special transportation rules, or safety concerns.

<2> Automatic self-calibration -- The system is fully automatic, eliminating the need for manual calibration procedures common to systems now in use. Current systems require a skilled technician to manually initiate recalibration of the equipment.

<3> Rapid "clear-down" -- The QS-B220 has been designed to address the industry's requirements for faster reset times. The Implant Sciences' design typically resets in seconds.

I do not in any way think that there will be a massive buying rush here, but I likewise do not think think there will be a reluctance to buy where existing orders are waiting in the wings (and the CC said these are there)

-OR-

that there won't be "Onesy-Twosy" test units by the folks who have made past buys of the other two older pieces of technology, AND I THINK THERE WILL BE A LOT OF BUYERS SHOW UP from amongst those who bought "onesy-twosy" and conducted tests.

I do not think the older technology that has already been bought will be descarded, but I also do not think buyers will be inhibited from looking at Implant's superior technology.

Also, bear in mind that in the CC, the company explicitly said that there are orders in the wings, waiting for the TSA to do the thing they have now done: add Implant to the "Approved" list.

That has now happened and those orders that are out there will now move.

And there will be a lot of buzz, IMHO, too.

There is a legitimate reason to argue about what "risk" there actually is, but I specifically heard it said on the CC that the TSA had been forthcoming with guidance, so it would be unfathomable, IMHO, if their stated favorable stance on the Implant device was somehow going to inhibit buyers even though Implant has not made it to the "Qualified" list.

It just does not track, IMHO.

I do think that, as is always the case with government contracting, there is a lengthy, slow, and complicated process involved, but in that there are only 3 devices that are allowed to be considered, and given the participation of the government up till now, it is illogical to think that Implant's devise is particularly "risky".

It just would not make sense, IMHO.

Hope this helps.

Imperial Whazoo