Manuka Inc (fka MNKA)

[Rang]

gene ingers latest on INKS
www.ingerletter.com

InkSure (INKS) is relatively light-volume; consolidating around or just shy of 3 now in light activity. Increasingly looks like it wants to firm prior to the Quarterly discussion or much the presentation of the 'chipless RFID' system next month in Boston. 'Chipless RFID' will have application in National Security, and even with the military eventually.

We think one reason the company is incorporated here is so as to do U.S. business; as many states and the Federal Government would require that for document issues (maybe they should apply that to all points of entry to this Country too; you'd think).

There is a new law, a rider to a defense appropriations bill last year; calls for states to comply with national standards for drivers’ licenses by May 2007. Key will be the requirement for a uniform 'machine-readable technology' that will store the bearer’s data. Since the law does not specify which machine-readable systems are required to be employed, the task of sorting out differing available technologies falls to the heroic Department of Homeland Security, which is now undertaking the rulemaking process this year. Many states currently use magnetic strips to store basic information on all drivers licenses, but these strips can rarely be read outside their jurisdictions. Real ID (the nickname for the law) will require inter-state operability, and thus consistency.

The American Civil Liberties Union opposes this measure, as does the libertarian Cato Institute. Some religious fringe groups have gone as far as suggesting national identification cards could be 'the mark of the beast' as prophesized in the Book of Revelations. Nonsense. The security of our persons and our Nation demand it; not to mention safety on the roads (not so incidentally if an illegal driver ever hit you). But of course there is the other side of the coin; the Coalition for Secure Drivers’ Licenses is a stanch supporter of more stringent ID standards. The 9/11 Commission also called for Federal regulations in the issuance of birth certificates and driver’s licenses. We'd have one guess what company could economically provide 'chipless RFID': INKS.

Of major concern to groups opposing the measure is possible use of radio frequency identification (RFID) chips, because they contain small antennae that can be read by low frequency transceivers. DHS has already put in place requirements to install such chips in passports, and critics of the technology fear driver’s licenses will be next. We say fine; too bad we have to go in this direction, but if so do it efficiently, elegantly as regards non-intrusive markings, and economically, via 'digital ink', not with expensive silicon chips (though it would work but be heavier and definitely not so cost-effective).

A taxpayer watchdog group, Citizens Against Government Waste, recently took an aggressive stance in opposing the technology, estimating in a report that the cost of a license could rise from $10 to $25 now, to $90 if chips are chosen over magnetic strips. We concur; that's why we advocate 'chipless RFID' at pennies per impression.

'Installing radio frequency identification chips or similar technology into every driver's license will be an expensive, invasive and less secure way to update identification documents'; said the CAGW group. We concur. Do it differently. In December, that group delivered a petition with 5,000 signatures to Homeland Security Secretary Michael Chertoff opposing the RFID solution. However, Chertoff a fan of technology such as RFID, called RFID cards 'very useful'. The chips are not 100 percent secure, opponents say. Low-frequency transceivers used by unauthorized identity thieves can pick up data from several feet away. One company on the 'net already promotes an electromagnetic shield that can be placed in wallets or purses to protect driver’s licenses against ID theft, even though RFID remains 2 years from implementation if it were to be approved.

Those who believe current state driver’s licenses protect identities are 'delusional', Chertoff told reporters at a briefing. Again we concur. We also agree two other ways to address the issue are 'chipless RFID', such as InkSure will present in late March, or even InkSure's conventional 'digital tagging ink' authentication solution, as it emits no such signal as opponents are concerned about, and by the way is easy to operate with respect to 'confirm or deny' scanning readers. Furthermore, we believe the INKS 'chipless RFID' system will have sufficient frequency (sort of spread-spectrum, but it's not exactly that) to defeat typical efforts to 'hack' or scan the ID's; an expressed fear.

Chertoff frankly thinks a secure card that is not forgeable, that is biometrically based, actually protects people against identity theft'. So, he should be doubly enthusiastic about InkSure's 'chipless RFID' technology then; but we don't know, though hope the Government participants at the Boston gathering will do more than check it out (we'd really hope that preliminary discussions have already occurred; and if not suggest the company consider doing so). There might be some high-tech thieves who could read a card through someone’s wallet or purse; Chertoff has opined. 'I don’t know if taking extreme hypotheticals is a way to make public policy' he was quoted as saying. Well, our answer is this is the future; one company won't have it all; but a consistent tactic of codifying drivers licenses to cause counterfeiters, forgers, terrorists and criminals, to run afoul of the law, is a good thing. And we believe InkSure has existing products that go a good ways towards fulfilling this need (which they probably haven't as of yet introduced to state or Federal agencies, though we wouldn't know), not to mention an interesting promise in the forthcoming 'chipless RFID'. World premier: late March.

In the meantime; of course it's a speculative stock as outlined before; and on the 'bb' so care in accumulation is necessary. It can be volatile and subject to sharp swings in both directions, as we've already witnessed on occasion. However, we do not believe so many of the old (some still quite young) 'players' from Sensormatic (the pioneer of the RFID field; later sold to Tyco) would be involved (more in the last couple months) if they didn't believe this very small company had some compelling innovative gear to show to prospects, and potentially upstage some very big technology names as well.