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This is a personal comment. It may be a special situation that I am beginning to investigate, an update on one I already told you about in this column, in "Larry Oakley's Opinion" or "Larry Oakley's Stock Pick," or a comment on something that is happening in the economy or in one of the markets.
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Current Larry Oakley's Comment:
Date Posted: 07/08/08
Homeland Integrated Security Systems, Inc. (Other OTC: HISU)
My Opinion
I recommend that you take a position in this emerging growth situation for two main reasons: (1) The price is right – it closed at $0.0005 last evening(7/7/2008), which in my opinion is much undervalued; & (2) I've been covering HISU for several years, have just interviewed CEO Fred Wicks again, & now consider this company a turn-around.
Brief Background
HISU is a Global Security & Technology Company that has evolved to meet the demands existing in today’s security driven society. Some of the many markets in which its technologies provide a distinct advantage include airports, train stations, military & government facilities, school districts, commercial buildings, law enforcement agencies, & fleet management, as well as personal protection & security.
Its patent pending Cyber Tracker units are revolutionary "Smart Box" devices designed to provide real-time GPS tracking, monitoring (& even controlling) of vehicles, people, other mobile assets, & valuable installations & equipment.
In its consumer market, here's just one application I can think of: If your daughter, say 18 years old, is going out for the evening, she can have a Cyber Tracker in her car, or on her person if she is in another car. Her parents can at any time see exactly where she is, how fast the car is driving, where the car stops & for how long, etc. If there is anything suspicious, the parents can get in their car & quickly drive to her exact location. Such a consumer application is totally feasible, because the Cyber Tracker will be available at a price that almost anybody can afford. Obviously, even this one application of HISU’s technology has a substantial potential revenue stream.
I like the fact that the company is moving in several vertical directions, each of which appears to have substantial revenue generating potential.
Key Pilot Projects
Newell Coach's Luxury Motor Homes -- On 6/26/2008, HISU announced a new pilot program to test the Cyber Tracker safety & security system, & its machine-to-machine monitor & control device on Newell Coach's luxury motor homes. In phase one, HISU will install its CT-410 on one vehicle for an evaluation period.
HISU & Newell will evaluate an automatic collision detection system & emergency transmission system with e-mail & text message capability, automatic opening, closing, & locking of doors & windows, & remote starting. They will also evaluate real-time or demand-based location & mapping through an on-board computer, cellular phone, or Web connection, with an IP camera for live transmission of images inside & outside the vehicle. They will also test the onboard diagnostics, monitoring, & diagnosing of engine performance, oil pressure & water temperature, & GPS tracking. The software will allow Newell Coach to know where every vehicle is at all times from an office computer or cellular phone.
Fred Wicks said: "We have worked hard to secure this pilot program. Motor homes represent a significant investment to their owners, & they'll appreciate the vehicle management & security enhancements provided by the Cyber Tracker system. With approximately eight million families owning RVs, the possibilities for additional sales are considerable."
The motor home solutions product line will enable owners to select tracking, management, & security features for their vehicles while on-board or from a remote location. HISU provides options for different networks including Sprint/Nextel, AT&T/Cingular, in addition to other carriers, as well as a satellite-based platform. Getting this pilot took a long time, & when it is successfully completed, it will serve as a model that should result in sales to other industries & markets.
School Bus Pilot On 6/2/2008, HISU signed a letter of intent (LOI) to form a strategic partnership with Sky Shield USA, a developmental company focusing on GPS tracking solutions for school buses. HISU & Sky Shield will produce a state-of-the-art tracking device to protect the nation's schoolchildren.
"The School Bus/RFiD Solution" product will track the time and location that children enter and exit school buses, enabling parents, teachers and administrators to track their safety. HISC will produce the device & the back end software, utilizing its Cyber Tracker technology. Each student's identification information would be entered into a database & logged by an RFiD reader, integrated onto the bus, when they enter & exit.
About 475,000 school buses provide daily transportation to 25 million elementary & high school children nationwide. It is estimated that nearly 5,000 students annually in the U.S. & Canada are left on school buses, with many cases involving special needs students.
"This agreement has the potential to change the way the nation increases the safety of our children, & we are elated to combine efforts with Homeland's technologies," stated Scott A. Timm, Co-owner of Sky Shield USA. Fred Wicks added: "This is an exciting opportunity for sales in a very important application. It's a win-win for everyone involved. Sky Shield USA plans on approaching the country's largest school bus operators & we plan to begin beta testing in the near future."
Recent News
7/2/2008 -- HISU announced it stepped up its efforts to market Cyber Tracker to county governments in Florida & North Carolina. The equipment can be installed on patrol cars, fire & rescue vehicles, & public works vehicles. Multiple counties in Florida & North Carolina have requested quotes for the Cyber Tracker in an effort to improve safety & save costs for local governments.
The Cyber Tracker technology has the ability to help reduce fuel costs by monitoring routes, acceleration rates, speed, & idle time. It can also reduce costs by measuring performance to prevent expensive repairs. With the addition of an external power source like its solar-powered charging system, the Cyber Tracker can be installed on vehicles not equipped with a permanent power source to recharge the system. HISU offers its CT-410 for monitoring, measuring, & controlling functions, & the CT-150, a low-cost solution for standard GPS tracking applications.
Fred Wicks says: "We have been successful with this market segment in the past. This is an opportunity for us to increase our sales of data tracking technology into operation for a variety of civic & governmental agencies. Not only will this help them reduce their fuel expenditure & maintenance costs, but it will also result in additional sales of our equipment & software."
6/19/2008 -- HISU is now offering leases for its CT product line & custom data tracking software. Lease rates depend on the number of units & length of contract. The program is expected to create new revenue streams & sales. HISU is already using the program as an incentive for customers to begin using its GPS solutions. By leasing any of the CT products, companies can begin to utilize the many benefits of GPS with little or no upfront costs. Lease rates for the equipment can be as little as $7 dollars per month per unit.
HISU will offer three different models of its Cyber Tracker system for lease: the CT-1000, the CT-410, & the CT-150. The top-of-the-line CT-1000 offers a blend between GPS tracking & remote monitoring & control functions. The CT-410 provides features for users who require GPS tracking & limited monitoring and control capabilities, & the CT-150 is a low-cost solution for standard GPS tracking applications.
Fred Wicks commented: "We're very excited about this new leasing program. It will enable companies to acquire large quantities of our equipment while keeping costs low, & we expect that it will result in additional sales of our equipment long-term."
6/17/2008 -- HISU signed an agreement with MANAonline, a network of sales representatives, to increase sales & foster business relationships. At the same time, MANAonline will advertise the services of HISU’s products exclusively to its database of sales representatives.
MANAonline's management is made up of former sales reps & managers who help clients set up a network of sales contacts & consultants. It generates revenue for clients by arranging sales & business relationships. Its clients are provided with private online accounts, & are encouraged to call the company directly for business, sales, & legal consultation.
Fred Wicks said: "Through our due diligence, we have found MANAonline to be a highly effective sales & marketing tool. We believe that by utilizing an organization like MANA, we will be able to generate an increase in sales. MANAonline will offer a large database of diverse sources for sales & partnerships."
6/12/2008 -- HISU began marketing & generating sales of mapping software to government agencies & privately owned companies. It obtained the rights to offer this feature rich software through a reselling agreement with the software developer. HISU already targeted about 750 units of mapping software sales & has begun to get commitments from current customers & prospects.
The software runs the backend mapping application for GPS units used to track the location, performance, & efficiency of company assets. Information such as where delivery trucks are going, what speed they are traveling, & when they last reported in can be tracked & recorded in real time. The software improves computer performance in processing large amounts of data, & users are able to access the information via Web browsers from around the world. Numerous features can be added to customize the software to particular industries including trucking fleets, public transportation, law enforcement, & others.
Fred Wicks said: "We've been searching for the right software company with which to partner & create this revenue stream & we're very pleased with the results in just one month. This is a huge step forward for us to be able to generate recurring revenue. Another major benefit for us is that we expect the sales of software to lead to sales of our hardware products to the same customers."
6/10/2008 -- HISU is preparing the release of a new, low-cost, portable GPS tracking device for a wide range of target markets. The 2.6 ounce, pocket-sized CT-100 can be used to track children, pets, sex offenders, vehicles, & a limitless number of items. The CT-100 transmits its location to a personal computer, enabling users to track the location of the unit at all times.
The CT-100 is in the testing phase & scheduled for release in 10/2008. About 2 x 2 inches, it can clip onto a belt or slip into a pocket, & uses a rechargeable battery. It does not require a line-of-sight with the open sky & can work indoors using a combination of GPS technology & cellular signals. It will be marketed to law enforcement & public safety agencies, schools, automotive manufacturers, shipping companies, & other industries. It currently works with HISU’s CDMA partner, Sprint PCS, & is expected to be supported by additional networks prior to release.
Fred Wicks said: "This is our first GPS tracking device that is truly convenient to wear. We are very encouraged by the number of industries in which it can be utilized. The CT-100's technology is state-of-the-art with respects to cost, size, & usability, & we anticipate it to be extremely marketable."
5/28/2008 -- HISU extended the projected closing date to acquire Global Tracking Technologies™, a wireless GPS location-based services company in Tampa, FL. In a revised LOI the companies agreed to extend the deadline so both parties have adequate time to finalize the due diligence process. The due diligence period has been extended until 7/15/2008 with an anticipated closing of 8/31/2008.
Things I Like
1. HISU recently announced the launch of new tracking software. For every 1,000 units of data tracker software sold, the company can generate approximately $215,000 each year in recurring revenue through customer service contracts & licensing royalties.
2. The pilot programs HISU is engaged in are totally funded, so the company doesn’t have to raise money for those expansion efforts.
3. HISU recently filed an application to be added to the U.S. General Services Administration (GSA) schedule. GSA oversees $66 billion of procurement annually, & contributes to the management of about $500 billion in U.S. Federal property, including 8,600 government-owned or leased buildings & 208,000 vehicles.
4. HISU recently announced that it signed a reseller agreement with Connecting Business World Wide, LLC to market HISU’s products to a host of major automotive manufacturers, shipping, & freight companies in Scandinavia.
5. HISU has expanded & modified its sales network. It concentrates on selling solutions as opposed to selling only products – a sensible strategy.
6. Over the past 18 months, HISU has been diligent in the development & release of new products, as well as reducing selling, G&A expenses from $792,489 in the six month period ending 3/31/2007, to $485,917 in the same time span ending March, 2008.
Contacts
HISU operates from 15-F Glen Bridge Road, Arden NC, 28704 -- Phone: 828-681-5152.
For more information, call its IR firm @ 866-843-2775, & check www.hissusa.com.
My comments in this column are strictly my personal opinion. At times, I will include forward-looking information as that term is defined in the Private Security Reform Act of 1995. Such information & the related company are subject to many risks & uncertainties. There can be no assurance that actual results, business conditions, business developments, losses & contingencies, local & foreign factors, & other matters will not differ materially from those suggested in any of my forward-looking statements. Such differences are the result of all sorts of factors (some examples: market conditions, competition, advances in technology, acquisitions, mergers, potential litigation, personnel changes, market changes, capital availability, etc., etc.).
Do not run out & buy a stock just because I am enthusiastic about the situation. Call the company before you buy -- satisfy yourself first. I always include a phone number for that purpose. My purpose in this column is to respond to your request for my personal opinion. You have the responsibility of making your own investment decisions. Do not give up that responsibility.
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