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Military
and Homeland Security Track Record |
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This weekend's idea is the fifth
OTC
Journal idea in this space. So far I am 3 for 4. Here's a recap in
chronological order;
-
Irvine Sensors (NASDAQ: IRSN):
12/17/02
at $1.72- Went to $4.50 (160% gain at the top)
-
Virtra Systems (OTC BB: VTSI):
7/15/03
at $.10- went to $.47 (370% gain at top)
-
Aegis Assessments (OTC BB: AGSI):
6/5/04
at $3.80- currently $1.80 (52% current loss)
-
Global E-Point (NASDAQ: GEPT): 11/20/04
at $2.31- currently at $4.60 (100% current gain)
I hope you will agree this track record
is impressive. I wish they all looked like this. I have been able to find
some gems in this arena. This weekend I am going to try to go 4 for
5. This weekend's idea is the most prolific of the bunch in terms of
both current revenues and demand for products. I hope you like this one.
I love it.
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Avoid
Mistakes: Use The BLOG |
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As I mentioned in the year end wrap
up, our biggest challenge is the mistake of paying too much for stocks.
I tend to publish editions covering breaking news, and the stocks generally
trade up on high volume after the fact. In our excitement we buy too early
instead of exercising a little patience and waiting for the inevitable
pullback.
One of my missions for 2005 is to
provide timely commentary during moving markets. In order to achieve this
goal, the OTC Journal BLOG (short for Web-Log) is now live and functioning.
With the BLOG I have the ability to create commentary and get it
posted to the web site in about 15 minutes. All you have to do is go to
the site, click on the stock, and read the most current entry. This will
provide guidance to help avoid mistakes.
You will find the BLOG on
the right hand menu bar at the home page (WWW.OTCJOURNAL.COM).
There you will find a section for each stock we cover. Simply click on
the name to go to the most current entry. You will see the time of entry.
There is also a field for a comment or question. If you visit the BLOG,
you will find entries posted this week on BrandPartners (BPTR) which
broke out Thursday, and Global E-Point (GEPT).
If you want some guidance on Monday
morning concerning today's idea, simply visit the BLOG and see if
I have made an entry. I should have something up with 30 minutes of the
market's open.
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Markland Technologies
(OTC BB: MRKL): Developing the Most Important Technologies |
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Markland Technologies plays
one of the most important roles imaginable in developing technologies to
fight terrorism. On behalf of the Department of Defense, MRKL is
actively involved in the development of technologies which use sensors
to detect hidden weapons, explosives, chemicals and gases.
The company's fortunes changed entirely
in June of '04 when they acquired privately held EIOR Technologies.
MRKL's
revenue stream immediately rocketed from $6 million in annual revenues
to
$60
million in annual revenues (based on September quarterly revs of
$15 million).
Wholly owned subsidiary EIOR
is intimately involved in the development of remote sensing devices used
to detect terrorists, bombs, weapons, and all kinds of threats.
Here's a run down of some of the
companies products in development under contracts with the DOD:
Pictured here is MRKL's AWAS
(Advanced Wide Area Search) vehicle. AWAS is a scout vehicle
that consists of a Hummer equipped with a Forward Looking Infra Red Sensor,
a High-Resolution Short Wave Infra Red Sensor, and a Ground Target Radar.
The sensors are mounted on a gimbal which has been modified to allow it
to perform a wide-area scan. The scanned sensor data is fed into an Automated
Target Recognition software program for locating potential threat areas
for the operator.
The AWAS is being developed in support
of the Ground Systems Division at the Night Vision Laboratory, located
at Fort Belvoir, Virginia. This systems can detect all kinds of threats
at night.
Here is MRKL's U. S. Navy’s
Shipboard ACADA man-portable point detection system used to detect
all classic nerve and blister agents as well as other chemical warfare
agent vapors. The system is easily upgradeable for new and novel agents.
Patented by the U.S. Navy, it is designed to operate onboard a ship and
used to detect agents at low concentrations in real time while ignoring
the presence of common vapor interferents. The system has visible and audible
alarms.
It weights 26 pounds, runs on AC
or batteries, and can detect chemical agents within 3 seconds of being
activated.
Lastly, you are looking at two different
versions of MRKL's Long Range Acquisition Scout Surveillance System
(LRAS). These are portable devices currently under development in conjunction
with the US Army Special Forces.
The devices use multi spectral infrared
sensing to aid US Army Special Forces operators and other ground-based
combat units in clearing and securing building interiors and perimeters
as well as other urban structures in advanced combat areas of operations
such as those found in Iraq and Afghanistan. These devices can detect the
precense of potential dangers in buildings and caves.
These portable devices will not be
field tested until the 3rd quarter of 2005.
This final one is the Coup de Grace,
and the subject of today's press release:
As part of a top priority program
funded by the US Army, MRKL has been using its remote sensor technology
to develop technologies for Hidden Weapons and Explosives Detection. These
guys are developing the technology that will eventually used to identify
and thwart suicide bombers.
Using technology to identify suicide
bombers in a crowd is a difficult undertaking. First, a thermal component
used at varying ranges must be incorporated. Secondly, the system must
optimize the processing bandwidths. Thirdly, the system must be developed
with Aided Targeting Software.
I don't understand exactly how the
varying technologies all work together. However, I do know the company
announced Friday it has successfully completed the first phase of testing
of this new suicide bomber detection technology. Within the press release
CEO Bob Tarini states: “When all of these different detection technologies
are integrated into a single, unified solution, the system can attain an
extremely high level of accuracy in the detection of potential threats
with a relatively low rate of false alarms”.
Now that you have a clear picture
of the company's products, here are some thoughts on the investment potential.
There are currently 58 million shares I&O on MRKL. If all warrants
outstanding are exercised, there will be another 20 million shares issued.
Therefore, we have a company with
a market value of about $43.5 million, growing organically somewhere in
the 30% range, and currently delivering about $60 million in annual revenues
based on the September quarterly results of $15 million. You can
own this stock for less than 1 times annual sales- a bargain basement level
by any metric.
While the company operated at a loss
in the September quarter, they were in fact cash flow positive from operations.
If you extract all the one time expenses related to the acquisition, and
all the non-cash expenses, the company generated about $1/2 million in
positive cash flow. MRKL's management feels it won't need to raise
any more capital in the near future. As the stock moves up in price and
warrants are exercised, the proceeds will fulfill the company's capital
needs.
In keeping with the theme of not
repeating past mistakes, today you are reading about a company that has
already completed its financing, and got it's registration statement effective
back in November. The underlying cheap stock has already been absorbed
by the market for the most part.
MRKL is a brisk trader with
a big following. It averages about 1.8 million shares per day in volume.
Back in September when the company announced it had generated $6 million
in sales in August it traded 39 million shares in one day. Unlike past
premature ideas, this stock has been wrestling with an excess supply from
the financing, but is closing in on a critical breakout point.
On the fundamental side the future
is bright. MRKL is developing all these technologies for the US
Military on the government's nickel. Once completed, the company gets to
manufacture the final products and sell them to the military.
Most of the products in development
have cross over applications towards fulfilling our needs for homeland
security. Over the next several years MRKL will be in a position
to manufacture and distribute domestic versions of these products at much
higher margins. Long term, these are the kinds of developments which could
put the stock many times higher than where it currently trades.
In the short term, MRKL's
post close announcement of successful testing of its suicide bomber technology
could send the stock surging up the charts. I feel the stock is definitely
a buy up to $1, but use caution if the opening gap is too big. Check the
OTC
Journal BLOG for market feedback about 1/2 hour after the open on Monday.
If it doesn't gap open too high, don't be afraid to take a position.
Here is the complete text of Friday's
news release for your review:
| Press Release Source:
Markland Technologies, Inc.
Markland Developing
Next-Generation Technologies to Provide Early Detection of Suicide Bombers
Friday January 7, 5:14 pm
ET
Company's Development Program Creating
Multiple Solutions to Stop Terrorists and Armed Assailants
RIDGEFIELD, Conn.--(BUSINESS
WIRE)--Jan. 7, 2005-- Markland Technologies, Inc. (OTCBB:MRKL - News),
a defense and homeland security company transforming advanced laboratory
technology into real-world products, has announced successful test reviews
of its suite of next-generation electronic imaging and other detection
solutions to spot suicide bombers and other armed terrorists before they
can carry out their attacks. The announcement was made by Robert Tarini,
Chairman and CEO of Markland.
The initial development
and testing phases of the suicide bomber detection systems have been conducted
under contract with the U.S. Army. Markland subsidiary EOIR Technologies
has kept the technology on a fast-track development cycle, and upon receipt
of subsequent rounds of Department of Defense funding, believes it will
be able to quickly deliver live, field-ready systems.
"Army leaders have made
it clear that the development of more effective technologies and methods
to stop suicide bombers is a top priority, and Markland has responded with
an approach that we believe will yield the best results in the shortest
possible time," said Mr. Tarini.
While the military has
funded development of the suicide bomber detection systems, Markland expects
the products and technologies will also be employed in civilian settings
in the United States, such as at federal buildings, shopping areas, sporting
events and other potential terrorist targets. "We hope that such attacks
don't occur on American soil, but we cannot ignore the risk," said Mr.
Tarini. "We believe our products will eventually provide an additional
measure of security for innocent civilians in the U.S. and abroad."
Markland has developed
a unique three-tiered screening system that combines a range of existing
thermal imaging and other advanced sensor technology with new Markland-developed
software analysis techniques. Together, they generate detection capabilities,
which the company believes can be significantly more powerful than could
be achieved by any single system.
"When all of these different
detection technologies are integrated into a single, unified solution,
the system can attain an extremely high level of accuracy in the detection
of potential threats with a relatively low rate of false alarms," said
Mr. Tarini. Approximately ten different detection technologies comprise
the Markland suicide detection protocols, among them: thermal and electromagnetic
sensors and imaging systems, vapor sensors, metal and chemical detection
processes to spot firearms and explosives, and systems that can identify
biological, radiological and other threats. Most of the individual systems
are already proven through longtime use by the military and in civilian
implementations around the world, contributing to the Markland system's
robustness and dependability.
One of the most important
elements of the entire protocol is Markland's proprietary "stand-off" detection
system - detection technologies capable of identifying potential threats
at far greater distances than had previously been achieved. Precise distances
are classified by the military, but such long range detection is a critical
part of identifying and stopping dangerous individuals before they can
reach their targets and cause bloodshed.
Suicide bombings and
other types of armed terrorist attacks are a daily danger for innocent
civilians and official personnel in many nations around the world. U.S.
troops in Iraq last month suffered heavy casualties in a suicide bombing
attack on a dining facility, and they continue to face such deadly threats
at traffic checkpoints and in crowded public areas.
Markland's EOIR subsidiary
currently holds a five-year omnibus contract with the U.S. Army's Night
Vision and Electronic Sensors Directorate (NVESD), one of the military's
most advanced research and development arms. The ongoing five-year omnibus
contract may potentially provide a maximum ceiling amount of up to $80
million in fiscal year revenues for Markland. The contract has a potential
value of approximately $406 million over the life of the contract.
About Markland Technologies
Markland Technologies,
Inc. is committed to setting next-generation standards in defense and security
through the provision of innovative emerging technologies and expert services.
The Company is engaged in the identification of advanced technologies currently
under development in laboratories, universities and in private industry,
and in the transformation of those technologies into next-generation products.
Markland's solutions support military, law enforcement and homeland security
personnel to protect the nation's citizens, borders and critical infrastructure
assets from the threat of terrorism and other dangers. Through strategic
development, Markland focuses on the creation of dual-use technology and
products with applications in both the defense market and civilian homeland
security and law enforcement fields. The Company is a Board Member of the
Homeland Security Industries Association, and is a featured Company on
HomelandDefenseStocks.com; additional details can be viewed at http://www.homelanddefensestocks.com/Companies/MarklandTech.
For more information about the Company and its products, please visit the
Markland home page at http://www.marklandtech.com.
Forward-Looking Statements
Investors are cautioned
that certain statements contained in this document as well as some statements
in periodic press releases and some oral statements of Markland Technologies
officials during presentations about Markland Technologies, are "forward-looking"
statements within the meaning of the Private Securities Litigation Reform
Act of 1995 (the "Act"). Forward-looking statements include statements
which are predictive in nature, which depend upon or refer to future events
or conditions, which include words such as "expects," "anticipates," "intends,"
"plans," "believes," "estimates," or similar expressions. In addition,
any statements concerning future financial performance (including future
revenues, earnings or growth rates), ongoing business strategies or prospects,
and possible future actions, which may be provided by management, are also
forward-looking statements as defined by the Act. Some of the factors that
could significantly impact the forward-looking statements in this press
release include, but are not limited to: a reduction in order rates from
the Army's Night Vision and Electronic Surveillance Directorate, difficulties
integrating our acquisition of EOIR, insufficient cash flow to continue
to fund the development and marketing of the Company's products and technology;
a rejection of the Company's products and technologies by the marketplace,
and; disputes as to the Company's intellectual property rights. Forward-looking
statements are based upon current expectations and projections about future
events and are subject to risks, uncertainties, and assumptions about Markland
Technologies, its products, economic and market factors and the industries
in which Markland Technologies does business, among other things. These
statements are not guarantees of future performance and Markland Technologies
has no specific intention to update these statements. More detailed information
about those factors is contained in Markland Technologies filings with
the Securities and Exchange Commission.
Markland Technologies,
Inc is a featured Company on http://www.HomelandDefenseStocks.com, a service
for which Markland compensates the provider.
For full details, click
here: http://www.homelanddefensestocks.com/Companies/MarklandTech/NewsReleases.asp.
(Due to its length, this URL may need to be copied/pasted into your Internet
browser's address field. Remove the extra space if one exists.)
--------------------------------------------------------------------------------
Contact:
Markland Technologies
http://www.marklandtech.com
or
ECON Corporate Services
Dawn Van Zant, 866-730-1151
[email protected]
or
Trevor Ruehs
[email protected]
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