Weapon and Explosives Detection Technology Securing the Nation's Transit Systems

Weapon and Explosives Detection Technology Securing the Nation's Transit Systems L-3 Communications, Analogic, Sniffex, Sense Holdings and Technest Work to Protect Mass Transit Systems and Critical Infrastructure By: Ann-Marie Fleming Feburary 2006 As Homeland Security efforts domestically and abroad continue to fight the war against terrorism there continues to be a significant need for innovative methods for detecting weapons and explosives. Detection technology has many applications from protecting our ports and borders, to airports and other mass transit systems, to crime scenes and hostile military areas. It is apparent that the Homeland Security industry as a whole is here for the long run and areas such as detection technology continues to be a growing market within this sector. As described by Jack Mallon, Senior Managing Director of Mallon Associates, an investment bank focused on the security industry, "It is an event driven market and the events over the past month or so including the most recent threat from Bin Laden will be a key driver for this sector of the industry." "Threats posed to a country's critical infrastructure are constantly changing and can emerge quickly," states William Frain, Senior Vice President of L-3 Communications Security and Detection Systems (NYSE: LLL). "Granted, much has been accomplished to protect this infrastructure and prepare for the worst, and L-3 Communications Security and Detection System has participated in the strengthening of some of the world's most vulnerable targets by deploying its advanced security screening technology. Although the risks vary for each transportation mode, the fundamental elements in protecting our transportation systems require the screening of people, baggage, containers, and vehicles. L-3 is the leading provider of security screening equipment that addresses these core requirements." As a result of the growing demand for effective detection technology, new products are coming on the market at an ever increasing pace. Paul Johnson, CEO of Sniffex, Inc. (OTC.PK: SNFX), a developer of a lightweight handheld distance weapon and explosives detection device explains, "Private industry recognized the need and the market potential for new and more effect tools for the fight against terror worldwide. Add to that, Homeland Defense funding, not only in the US, but worldwide for research and development, and you have the potential for an impressive array of new tools." The most urgent national security threat confronting most western nations, according to Dore Perler, CEO of Sense Holdings Inc. (OTCBB: SEHO), a developer of integrated explosive detection technologies, is the surreptitious introduction of lethal substances into our social infrastructures. "These substances include explosives, chemical warfare agents and biological warfare agents, therefore Sense is working to address these vulnerabilities with high-performance detector systems based on our patented Micro Electro-Mechanical Sensor (MEMS) detection technology. The inherent low-cost of MEMS-based detector systems will permit large-scale worldwide deployment to all security forces. We plan to complete our handheld MEMS explosives detector demonstrator during the latter part of the first-quarter of 2006,"states Perler. Transit Security: The Transportation Security Administration (TSA) is still very focused on aviation security over other transit areas such as subways, railways, ships etc. According to Peter Harris, Vice President for Security Strategy for Analogic Corporation (NASDAQ: ALOG), a leading designer of security systems, "There are two main reasons for TSA's continued focus on security. First of all, terrorists believe in sensationalism and drama to convey their views. Accordingly, we have seen that airliners filled with innocent passengers are a likely target and will continue to be so. Secondly, from a technical standpoint, there can be more damage inflicted on an airplane with a small amount of explosives than possible on a cruise ship or a subway station. Therefore, the industry, particularly the aviation sector, still believes that the biggest threat we face today are very small amounts of explosives hidden in checked bags or carry-on items." Harris describes a security focus aimed at addressing the threat of carrying small amounts of explosives as exceedingly difficult to detect. "We have seen specific examples of people willing to die going on board commercial aircraft." Part of the government's focus is to be able to detect small amounts of explosives being carried on board aircraft by passengers." Analogic is addressing this issue through the development of a highly sophisticated system called COBRA. This is an Explosives Detection System (EDS) that automatically detects explosives and weapons and provides this information real-time to the operator by way of a 3-D display. COBRA will be deployed at our airport's checkpoints and it represents a revolutionary advancement over current conventional x-ray systems that only take one view of a bag from a fixed angle. Harris further describes the technology, "Because COBRA is a small CT system, its x-ray source goes around the entire item and the operator is provided with a 3-D display of the entire contents of the bag with those threat items automatically displayed." L-3 Communications Security and Detection Systems is heavily involved in transit security through a variety of technologies. Frain describes, "As a leader in the development of advanced screening technologies, L-3 has developed an array of forward-thinking detection systems that set the industry standard for accuracy, reliability, and operational efficiency. For example L-3, in partnership with the Massachusetts Institute of Technology (MIT), is refining elemental differentiation into a powerful threat detection technology known as Neutron Resonance Radiography for screening containerized air cargo. Additionally, L-3 Communications Security and Detection Systems is developing an advanced container security device ( ACSD) that features advanced state-of-the-art sensors that will continually screen the contents of sealed cargo containers for explosives and biological, chemical, and nuclear threat substances. According to Mr. Frain, ACSD has the ability to track the entire sequence of a sealed cargo container's journey, from the moment it arrives at the point of departure to release at its final destination. Furthermore, ACSD is designed to automatically identify tampering at any point in the container's passage, as well as detect breaches wherever they occur: on the container's sides, roof, or bottom. In terms of securing other mass transit systems such as subway, bus and rail stations, TSA is feeling pressure to address these needs. The London bombings were an indication of the potential threats that exist in these areas. Robert Tarini, Chairman and CEO of Technest Holdings (OTCBB: TCNH), a provider of advanced remote sensor systems, chemical detectors, intelligent surveillance and advanced 3D imaging technology solutions describes, "Chemical and explosives detection technologies that can be installed to cover large areas such as cargo ports, transportation systems and sensitive federal facilities will become a hot commodity. We are trying to solve problems that nobody has yet to date been able to do and we have the brightest minds in the United States working on it." "You are going to start seeing in 2006 pilot projects where the TSA will be placing Analogic Cobras into rail stations, buses, as well as critical infrastructure of the country such as water treatment facilities, power plants, anything that terrorists can get into and are important to protect," explains Harris. Sense Holdings anticipates that MEMS-based detector systems will be the dominant detection technology of the future providing security solutions to address the needs for protecting our systems of transit. "MEMS combine all of the most desirable characteristics of a detection system, such as small size, lightweight, very low cost and a sensitivity level much greater than that of a trained sniffing dog. Our cartridge-based detector systems will allow very quick and low-cost field updates as new detection capabilities are continuously expanded. Beyond explosives, these capabilities will also encompass chemical and biological warfare agents in one handheld detector," states Perler. "Furthering the probability of threat detection for checkpoint security, L-3 Communications Security and Detection Systems will be introducing an innovative advanced imaging portal using millimeter-wave technology for non-intrusive screening at a much higher throughput than existing trace detection portals. Partnering with government, L-3 Security and Detection Systems is currently involved in two separate pilot programs sponsored by the TSA to strengthen security for rail and air cargo," explains Frain. Distance Detection: There are multiple applications for technology that can detect weapons and explosives from a distance long enough to offer a high degree of safety for those operating the device. There are many areas that place our members of law enforcement and military agencies at risk. Paul Johnson describes such risks, "First, the "hot spot" of a crime scene or other suspect area is the most dangerous. Police, government agents and military personnel often have to try to clear these areas without any clear indication of what they face before entering the area. Any tool that can help detect a threat before entering that area can save lives. Sniffex is unique in that it is able to detect the existence of weapons or explosives from a distance. In many cases an operator can "sweep" a "hot spot" and determine the risk before any invasive action is taken. Distance detection dramatically reduces the risks involved in clearing a dangerous area." "As of today, being able to detect a potential threat from explosives or chemical weapons from a safe standoff distance to an area which is highly populated is still a big unfulfilled need in the DOD/Homeland Security marketplaces. Technest is meeting this challenge through our Automated Adaptive Chemical Exploitation System (AACES), a remote sensor that can fill the need in many applications," describes Tarini. Driving Forces: Overall it appears that this segment of the Homeland Security market continues to evolve and becomes reinforced as the world continues its battle against the real threat of terrorism. Mallon explains, "Among the various factors that have the potential to invigorate weapons and explosives detection are the Bin Laden threat, the 9-11 commission report of deficiencies in the implementation of their recommendations and depending congressional oversight in this area which I understand may have negative reports forthcoming from congressional committees as to the effectiveness and efficiency of the airport security process under the TSA. Therefore I think that the stage is set for more activity in this space. Overall, it looks like there may be a second wave for this arena." According to Johnson, "There are some exciting advances in this arena that will be announced in the next 12 months warranting a hard look at the potential in this market segment. The investments being made now by government and private industry are tremendous and that will result in products that could deliver very good returns, given the worldwide market demand." Ann-Marie Fleming Ann-Marie Fleming completed her MBA in the United States, where she attended Webster University. She also holds an Honors B.A from the University of Toronto. She has over fifteen years of experience within the financial industry to include retail banking and brokerage, investment banking, and mortgage brokerage within the United States and Canada, with a firm background in corporate research. Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp, www.HomelandDefenseStocks.com/Companies/HomelandDefense/Disclaime r.asp