Replies to post #37666 on Secure Point Technologies Inc (fka IMSCQ)

[Imgoinhungry]

Great post! Wish ya would have posted it about a month ago. Would have saved me some $$$.

[pumper_stumper]

For the past week or so I have been working on a draft of a post that contained about 70% of what you said in your post. Yours is the of the better posts on ihub, and unlike many other analysis's you see on pinks which are based on nothing but dreams, this one reeks of logic, backed by logical pertenant examples and comparisons. It stands out like a sore thumb compared to the ridiculous "analysis" you see everywhere else.

One thing that you need to add to your presentation, is the other companies you site have significant RECURRING maintenance revenue, which raises what companies will pay for that revenue, so, a buyer would value IMSC's revenue multiple even less than the figures that you have suggested.

You've earned yourself a sticky!

+$500 million, as said elsewhere? Of course, that's just a pink sheet dream!

Well done!

[BradyBronco]

That's a bit extreme don't you think, Sully? I don't have the strength to write a long drawn out post detailing all the reasons why I disagree with you, but you can't possibly think that implant is only worth $40-$50m (1x revenue), can you?

[shiloh12]

Come on man,you've been here long enough to know they just pulled off what no other tech bellwether could.
I'm more confident now than ever. They will bag 100% of that CATSA order or I will at a bug.
BTW they are a "wildly innovate technology start up in an industry that generates revenue in the billions of dollars"

1x? It has, and as evidenced now more than ever always been about the IP. Whoever has it rules the ETD kingdom for the next decade

[ki2002rom]

I've read and respect your post and opinion. However.... accretion is the key. Those companies sold as maturity, IMSC is stepping into where they are and have been with bigger shoes that squash any hope they have for ETD going forward. Not much more needs to be said. Look at what they've locked down and where they're going.

[tedpeele]

Here is a case for buying ISC at a premium as opposed to using a simplistic 1 or 2x revenue model:

1. ISC is THE leader in an emerging long term growth field. This is due to two indisputable facts that set them apart from all of the potential competitors in trace detection:

First, they have TSA qualified technology for both cargo and passenger screening, both of which is very difficult, time consuming ,and expensive to get.

Second, they have the best technology, The TSA considers it to be the best, and to represent the next generation in trace detection.


2. ISC non-swab 'sniffer' technology is (we believe) 'disruptive', and expands the size of the future market in both ETD and drug detection by being able to do more than previous and other current products can do in terms of speed, ease of use, range of detection, and rate of false positives - all with no radiation risk. Some here think it expands even further into disease detection etc.

There is TREMENDOUS GROWTH POTENTIAL over the coming decades. The future market EXPANSION of use includes the following:

* Police & Bomb Squads
* Airports
* Border Crossings
* Military Defense
* Seaports and Containerships
* Field or Forensic Use
* Nuclear Facilities
* Embassies or Consulates
* Courts of Law
* Postal Stations
* Corporate or VIP Headquarters
* Commercial
* Correctional
* Federal buildings
* Schools
* Railway, Bus and Subway Terminals
* Special Public Events - Large Public Gatherings
* Leases, Rentals

These are very large future markets. In many of these markets there is hardly a TRACE to be found currently. But, there probably will HAVE to be. Once ETD is added on as standard in the airports, the next logical step is to add it anywhere where detection for explosives and drugs is currently be done. This makes ISC technology comparable to high tech startups and early leaders - which are often valued at very high premiums based on expectations for a future revenue stream in the billions of dollars.


3. Companies making far more than $50m a year in baggage screening EDS technology may lose out on future EDS contracts unless they own or utilize ETD add-on technology in the screening tunnels. This is a HUGE factor in valuation. If you stand to lose $1 billion or so in contracts because you don't have TSA qualified trace detection in the next generation for baggage screening, you might think twice about how much you would be willing to pay to avoid the R&D cost and time to try and get it organically - especially when the vast majority who do through that process fail. You might only have to think once about it, eh? The same advantage may well apply to cargo screening in the future also, another very large revenue stream for these companies that they will need to protect by having qualified trace detection.

This is very large 'leverage' that is in ISC's favor. What other choice will a baggage and cargo screener have to compete against Smith Detection?


4. ISC maintenance revenue has not yet been determined, but could be substantial, and could significantly increase margins, both of which would figure into a more 'fundamental' analysis of valuation.


5. Pricing pressure may weaken as ISC is now established as the proven technology leader, and the qualified competition was just cut in half from 2 to 1 players.