- Opened new testing and development center
- Finalizes international threat detection testing plans with University of North Dakota
- Adds former senior U.S. intelligence officer, Karl Wagner, as strategic advisor
- $25.3 million raise provides near-term working capital
- Plans to penetrate Las Vegas market
Patriot One Technologies Inc. (PAT:TSX.V; PTOTF:OTCQX), developer of PATSCAN CMR, an award-winning radar and software solution that identifies weapons and alerts security of active threats, has recently opened a new testing and development center in Kelowna, British Columbia.
According to the company, PATSCAN CMR is a first-of-its-kind Cognitive Microwave Radar concealed weapons detection system, designed as a tool to combat active shooter threats before they occur. Designed for cost-effective deployment in weapon-restricted buildings and facilities, the Patriot One software solution and related hardware can be installed in hallways and doorways to covertly identify weapons and to alert security of an active threat entering the premises.
Patriot One was a winner of the 2017 Anti-Terrorism/Force Protection category of the Security Industry Association's New Product Showcase at ISC West.
The Kelowna Testing and Development Center is the second Patriot One research location established outside the company's Burlington corporate office and lab. In December 2017, Patriot One opened its first testing and development center at the Westgate Las Vegas Resort & Casino in Las Vegas, Nevada. The company recently announced plans with the University of North Dakota to open an International Threat Detection Center to test new technologies in a small municipality with educational and office buildings, restaurants and entertainment venues, a police station, an airport and several sports facilities.
Other Recent Events
Patriot One has continued to work with United Eye, one of its U.S. resellers, on an initial PATSCAN pilot project with a Southeast public school district. The team traveled to the Southeast to attend an onsite prep meeting to kick off plans with the school district; while there the team also met with several other businesses, including a regional U.S. bank and several large corporations, to expand business development efforts.
The past quarter has been busy for the Patriot One sales and marketing teams. The company kicked off the quarter with the ISC West event. The team met with global partners from Canada, U.S., U.K., South Africa, Australia, New Zealand and the Middle East and shared the latest innovations on the PATSCAN CMR concealed weapon detection solutions. The team has also begun submissions for several grants with the Canadian government and expects more grant submissions this quarter, with U.S. Safe School Funding becoming available for 2018.
Patriot One will be working with several of its reseller partners and educational clients to get those grant applications submitted before the deadline in August, with the hope that funding will come by October/November for initial site visits and preparation efforts.
The partnerships with Westgate Las Vegas Resort continues to offer live, real-world validation testing of the PATSCAN CMR solution. Westgate's security team has proactively introduced the Patriot One team to numerous local and national casino security organizations, many of whom have toured its onsite development and testing center, including one of the largest First Nation groups in the gaming sector.
Addition of Key Advisor
Karl Wagner, a former member of the CIA's Senior Intelligence Service (SIS), has been brought on as an advisor for U.S. government relations and business development. Wagner brings over 29 years of worldwide experience to Patriot One, including service in Latin America, East Asia, South Asia, the Middle East and North Africa. Wagner will advise Patriot One on government relations and business development opportunities within the U.S. for government and private business. In addition, his experience and advisory role will aid in the rollout of the PATSCAN CMR concealed weapon detection solution to other security organizations around the world.
Wagner's last position at the CIA was Chief of Counter-Intelligence (CI) Operations, in which he directed operations executed by officers matrixed throughout CIA, both at headquarters and overseas. He advocated for inclusion of resiliency efforts into CIA's Insider Threat Program and worked to implement CIA's Insider Threat Program across the Directorate of Operations (DO).
Upcoming Events
Patriot One has announced key event dates and locations for the remainder of the 2018 year. These showings will allow the company a stage to spotlight its technology and network with potential clients, partners and investors.
- 38th Annual Growth Conference 2018 Boston, MA USA - Intercontinental Hotel, August 8–9
- 2018 ASIS Global Security Exchange Conference & Expo Las Vegas, NV USA - Las Vegas Convention Center, September 23-27
- IACP 2018 Conference & Expo Orlando, FL USA – Orlando Convention Center, October 6–9
- 2018 ISC East Conference & Expo New York, NY USA – Javits's Center, Nov. 14-15, 2018
- International Security Expo London, UK – Olympia Convention Center, Nov. 28-29, 2018
Working Capital and Structure
In late February, the company, with the help of both Canaccord Genuity and GMP Securities, closed a bought-deal equity financing of $25.3 million. Funds will be used Patriot One's international expansion, accelerating the deployment of its technology and for working capital purposes. The company sold 12,650,000 units at $2.00 unit. Each unit consisted of one common share with an exercisable warrant at $2.40 per share.
The company has around 110 million shares outstanding with a current market capitalization of approximately US$120 million.
Competitive Landscape
There are a number of players in the space as the pressing need for enhanced public security grows, such as schools, office buildings, casinos, hotels, stadiums and more. This competition is as simple as the old school metal detector systems with security guard, or as advanced as Radio Physics, a UK company that claims to eliminate security checkpoints and transform video cameras into intelligent security systems, fusing radar techniques and artificial intelligence to unobtrusively detect concealed guns and bombs at a distance. The company doesn't feel the metal detector technology is a direct threat as the need for this system has its place and targets a different market. Other competition includes Qinetiq Security, which uses a millimeter wave-length system, and also Evolv based in the U.S., which specializes in a fixed security screening.
Patriot One stresses its "uniqueness" by offering a covert, unmanned, intelligent machine learning technology system, in which the algorithms have been taught to identify not every object but only those that may pose a real threat. Being able to run this technology discreetly is key to students, patrons and customers' psyche, as businesses, schools and buildings want to avoid giving people a prison/fortress-like feeling where one may become apprehensive to enter the building.
Analyst Commentary
Analyst Doug Taylor with Canaccord Genuity noted in a May 31 report that his firm's "positive stance on Patriot One is supported by the view that demand for its unique threat detection solution, once commercialized, is substantial. The company is understandably using its solid balance sheet to make sure it does things right and that a commercialized solution is effective and scalable to meet demand. We believe achieving this milestone would be a significant catalyst for the shares."
[NLINSERT]Disclosure:
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Disclosures from Canaccord Genuity, Patriot One Technologies Inc., Estimates Revised, May 31, 2018
Patriot One Technologies, Inc. currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Patriot One Technologies, Inc.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Patriot One Technologies, Inc.
In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or co-manager of a public offering of securities of Patriot One Technologies, Inc. or any publicly disclosed offer of securities of Patriot One Technologies, Inc. or in any related derivatives.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Patriot One Technologies, Inc. in the next three months.
An analyst has visited the material operations of Patriot One Technologies, Inc.. No payment was received for the related travel costs.
Disclosures are available here.
