When they received FCC approval for their PATSCAN concealed weapon detection system, Patriot One Technologies achieved a major corporate milestone. With their product now approved for sales, and having already announced that pre-booking of orders for their radar based system exceeded their production capacity for the 4th quarter, the Company appeared to be on the verge of an accelerated pathway to generating substantial revenues.
The timing of approval being almost simultaneous with the Vegas shooting tragedy created almost a perfect scenario for shares in Patriot One. Here they were with an award winning security system, that was already slated for a trial at a Las Vegas casino, at the time of the deadliest mass shooting in US history. Security stocks as a group rallied, but PTOTF was the standout in the industry.
The shooting has brought extraordinary press and media coverage to the security industry and Patriot One has certainly received its share of late. It also brought incredible excitement and anticipation to investors in the Company.
How big is the opportunity? How soon will product ship? How many units can the Company deliver? These were just some of the questions that investors had and the answers bandied around were all over the place.
Fortunately, Tailwinds had the opportunity to speak with Patriot One’s CEO, Martin Cronin, to discuss with him these questions and then some. What follows are some of the highlights from our conversation.
Tailwinds Research (TR): Congratulations on FCC approval. With this in hand, what are the launch plans for PATSCAN?
Martin Cronin (MC): The FCC approval was a very big deal for us. We have had lots of interest from potential users and distributors of PATSCAN, while we waited for the FCC. Now, we have begun the process of taking PATSCAN out to our key early adopters.
We have a backlog of commitments for well over 300 units from these early adopters and it is our intention to meet this backlog over the course of the next several quarters, installing systems in key verticals and geographic locations.
These initial deployments will be key to the Company on two levels. First, we will be training our multiple distribution partners on the system so that they are ready for significant levels of broad scale deployment. Secondly, we will immerse our engineering teams into an in-depth analysis of real-world threat scenarios to ensure that Patriot One offers the leading world-class solution for global threat detection.
It’s important for investors to anticipate a phased rollout over the next 6 months as, like with any new technology, we will advance carefully and deliberately, recognizing progress will come quickly as we learn from each installation.
That being said, it’s really go-time here and we are moving forward rapidly. We anticipate exiting the first quarter of 2018 with multiple deployments in the key verticals of education, hospitality, healthcare, mass transit, retail, and more…with these installations occurring across 4 continents.
The bottom line is that Patriot One is right now launching a global, multi-vertical rollout, with the target of mass deployment starting at the end of Q1 2018.
TR: the recent tragedy in Las Vegas really shined a spotlight on the need for improved security solutions. Can you describe what the demand is like in the wake of the shootings?
MC: First, I’d like to offer our condolences to all those affected by the recent tragedy. It was a nightmare situation and one that we hope never to see repeated.
It is the mission of Patriot One to help reduce the risk of those types of events and we believe we offer a solution that can be a key part of the security plan at many different types of venues.
Prior to approval, we had a robust pipeline of interest in the PATSCAN system. Now, in the wake of the tragedy in Las Vegas, it’s safe to say that the interest in our product is really off the charts.
In the last few weeks, we have received interest from most if not all the major casinos companies. We already had an early adopter partner in Westgate Casino in Las Vegas, and we are going to make this our marquee client for that market.
With PATSCAN we offer a highly desirable system that allows casinos to protect their patrons without subjecting them to the intrusive aspect of a metal detector or body scanner. Casinos, and other entertainment venues, are all about creating the best possible customer experience. PATSCAN enables them to ensure the safety of their clientele without the negative aspect of “Fortress America” intruding into the experience.
Looking beyond casinos, the strong demand is quite universal. Our backlog already exceeds our current installation capabilities and we’ve yet to start marketing a product. It’s truly just the tip of the iceberg…we aim to make our system the go-to solution for any venue looking to reduce the risk of active shooters.
TR: So, the game plan is to use the next 6 months to roll the system out to marquee first adopters, while allowing the Artificial Intelligence component to garner enough real world experience such that you’re ready for broad deployment come Q2 of 2018. What should investors be looking for in terms of milestones of your success as you progress?
MC: As we roll out PATSCAN, first to our key first adopters, then on a broader basis, there are a few milestones of success for investors to keep their eyes on.
Investors should expect us to be entering multiple vertical markets; announcements regarding the key deployments into different industries will be coming. These initial adopters will be covering hospitality, healthcare, mass transport, retail, and more. Some of the first adopters will also be household names with whom investors will be very familiar.
As these early adopters get going, you should be looking for us to be entering different geographies. Our goal of being in multiple verticals on four continents during the early deployment days is certainly something investors can track.
At the same time, we wouldn’t be able to enter these markets without distribution partners. We will be bringing on more distributers and getting them up to speed as quickly as possible. This also includes Tier 1 distribution partners, with whom we expect to be launching installations of PATSCAN in early 2018. Investors should be prepared to hear more about our work with the Tier 1 systems companies, like a Siemens, Tyco or Honeywell, in the coming months.
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