Homeland Security and Defense Technology Enabling and Empowering National Security.    

Homeland Security and Defense Technology Helps Drive National Security Efforts to New Levels.

By: Ann-Marie Fleming, HomelandDefenseStocks.com
July 2005 

The Homeland Security and Homeland Defense sectors according to a recent study by Research and Markets, is predicted to grow globally from $28 Billion in 2003 to over $170 Billion in 2015, with over $1,150 Billion in estimated global market expenditures. With the growth of this market, Homeland Security and Defense needs have become more advanced and considerably more complex, establishing technology in a variety of security and defense related areas as essential for the overall preservation and evolution of National Security.  

Communications: 

Communication systems have faced requirements for advanced levels of security and feasibility that makes the transfer of information accessible, timely, and reliable. Endwave Corp (Nasdaq: ENWV), a firm that has seen considerable success with their broadband communication technology in the commercial arena, is answering the call from the Homeland Security industry for the utilization of their high frequency wavelength systems, which facilitates data exchange such as streaming video communications on the battlefield. According to Endwave’s CEO Ed Keible, “there is a change occurring in the homeland defense and homeland security world that plays to what we do, which allows our firm to take the years of experience and technology we have been using in the commercial world and apply it to satisfy the needs of homeland defense and security.” 

Real time dissemination of information also has vital applications on the home front through technologies that have the ability to communicate essential emergency and priority information to the masses in the event of threatening incidents. Responding to this need is OnScreen Technology, Inc. (OTCBB: ONSC), a developer of LED electronic signage that has the ability to communicate vital and time-critical visual information through their  REDIALERT™ Rapid Dispatch Emergency Signs™. 

Non-Lethal Technologies:  

Reinforcing the nation’s security efforts domestically and on foreign soil are several non-lethal technologies. Taser International (Nasdaq: TASR), who was recently named to Fortune magazine's list of 100 fastest growing small public companies taking the number one spot, has continued to generate sizeable orders for their stun gun models from a variety of law enforcement agencies. Law Enforcement Associates (OTCBB: LENF), a developer of a diverse line of undercover surveillance products that includes a complete line of audio and video surveillance equipment, under-vehicle inspection systems as well as less than lethal stun pistols, has also had a consistent flow of new contracts for their portfolio of products, reinforcing industry views on the longevity of the security industry.

With a major focus on the global Law Enforcement and Homeland Security industries, MDM Group (OTC.PK: MDDM) is developing several major initiatives that address current needs and demand.  Through its subsidiary, Harrington Group (OTC.PK: HGRLF), MDM Group is developing "electrically" charged ammunition. ShockRounds™, according to the Company, are positioned as a major market breakthrough as they address an urgent need for less-lethal products that provide enforcement agencies with the necessary means to protect and control security sensitive or threat situations from a greater distance.

Biodefense:

The high prioritization of biodefense is exemplified by the 2006 budget request for more than $4 billion to fund biodefense activities within the Department of Health and Human Services, as well as the Food and Drug Administration, the Centers for Disease Control and Prevention, the Health Resources and Service Administration, and the National Institutes of Health, according to the National Institute of Allergy and Infectious Diseases.

Active in the bio-defense arena is Aethlon Medical (OTCBB: AEMD), who has developed the first medical device able to provide the immune systems response of clearing infectious viruses from circulation. The device, known as the Hemopurifier™, is postioned as a first line defense against drug and vaccine resistant bioweapons. Additional aspects of the Hemopurifier™ as a bioweapon countermeasure include its ability to be deployed during the identification phase before it is determined which pathogens are involved, as well as its capacity to be mutation and strain resistant.  Aethlon is focused on Class A pathogens which the Centers for Disease Control and Prevention have defined as the greatest threats to society as biological weapons.  

Addressing Homeland Security’s bio-defense needs for safe, easy and sustainable delivery of necessary vaccines is CryoPort (OTC.PK: CYRX), a developer of a one way, one time use, disposable cryogenic shipper. CryoPort’s cryogenic shippers have been certified for the safe transport of infectious materials such as anthrax, as well as other diagnostic and infectious biological material and, are therefore able to assist in helping provide countermeasures against bioterrorism.

MDM Group, through Bamburgh Marrsh, is commercializing onsite drug testing and screening systems for industries including:  law enforcement, pre-employment, military, government and sports, as well as working with the US Navy to develop situation solutions for diagnosis and testing for such threats as Anthrax and certain diseases.  MDM Group is also working towards addressing biochemical and bio-terrorism threats and solutions through its subsidiary BioDefense Inc., a development stage biotechnology company.

Sensors and Detection Systems:

Sensors and detection systems have received considerable attention as essential components helping to ensure the nation’s security through military, border and infrastructure applications for surveillance, identification of weapons and chemical detection. As Scott Sacknoff, President of The Spade Defense Index® explains, the most critical element of Homeland Security is intelligence, defined as the gathering and interpretation of data and imagery – the source of which in many cases comes from sensors developed by defense related firms. Military developments in the sensor market have also contributed to the flux of detection technology such as the recent announcement by the Air Force and Pacific Northwest National Laboratory of their DNA-detector with the ability to sense the presence of biological weapons. Dr. Richard Stotts,  Air Force Research Laboratory's Human Effectiveness Directorate counterproliferation branch chief  explains, "The system will provide an increased capability for Air Force Special Operations personnel to rapidly determine the presence of biological warfare agents in a combat environment."

According to Brian Rutterbur, Equity Research Analyst, Morgan Keegan & Co. Inc, “Expect billions of dollars to be spent on sensors over the next several years. Sensors are expected to be installed in a variety of locations including perimeter protection around plants, in mass transit stations, any large gathering locations, potentially monitoring containers, rail cars, and trucks in route with hazmat.”  

Markland Technologies (OTCBB: MRKL), a defense and homeland security company transforming advanced laboratory technology into real-world products, is focusing through its most recent acquisition of E-OIR Technologies, on remote sensor systems for military and intelligence applications. Markland is currently working on a range of next-generation technology solutions for the U.S. Army's Night Vision and Electronic Sensors Directorate (NVESD), including night vision and advanced sensor applications, disposable sensors and other threat-detection systems and have recently been awarded $3.9 million in new orders and has earned a SeaPort Enhanced Multiple Award Contract from the U.S. Navy. The Company is also involved in imaging and surveillance sensor technology through its majority ownership in Technest Holdings, Inc. (OTCBB: THNS). 

As the risk of terrorist attacks continue to threaten the nation’s security domestically and abroad, explosives detection remains a top government priority. Sniffex Inc. (OTC.PK: SNFX) through its development of a handheld explosives detection device, has the ability according to CEO Paul Johnson, to locate nitro-based explosives (TNT, ammonium nitrate, PETN, RDX, gun powder, Semtex, and C4) from a distance of 10 to 100 feet depending on the quantity of the explosive and environmental conditions.

Cargo Security Devices:

As issues continue escalate over border and transportation security, this area has faced considerable pressure and scrutiny. Companies like Gabriel Technologies (OTCBB: GWLK) a developer of proprietary technology for a series of physical locking systems for the transportation and shipping industry collectively known as the WAR-LOK Security System, is hoping to help address some of the industry’s issues for secure containers, protecting contents against terrorist and theft attempts.

Precision Parts Production:

Manufacturing technologies represent a fundamental  aspect of  the homeland defense and security industry as they enable design, development and implementation, of vital military systems, made possible by companies such as Gateway International Holdings (OTC.PK: GWYI) and their portfolio of subsidiaries. Gateway produces essential internal components and precision parts for the Aerospace and Defense industry through their relationships with defense contractors such as Boeing, Raytheon, Northrop, and Goodrich Aerostructures.

Here For the Long Run:

As National Security remains a top government priority, the Homeland Security industry has the potential for continued growth. As the security and defense industry works towards meeting the evolving needs of Homeland Security, innovation, diversity of technologies and an overall solidification of the nation’s security structure becomes a welcome byproduct. As Jack Mallon, Senior Managing Director of Mallon Associates points out, “it is a hot industry and the security threat is not going away – which means there are numerous investment opportunities out there.”  

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 spanning the brokerage, banking, and mortgage industries within the United States and Canada.
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