a serious us competitor?

Dear Wealth Daily reader:

The world has changed. The attacks of September 11 have altered the way Americans as well as other global citizens live.

As a direct result of the attack, homeland security in America has become a massive market. In fact, it costs US taxpayers like you and me a whopping $200,000,000,000 a year!

Companies like Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and Boeing (NYSE:BA) have already made literal fortunes from this market.

A few months ago I learned about a tiny $32 million company that has developed a new chemical vapor analysis system that could save literally thousands of lives.

The name of the company is Electronic Sensor Technology (ESNR.OB)

EST's key product is the zNose. The zNose is like an electronic bomb-sniffing dog. Only better.

The zNose provides comprehensive, real time analysis of any chemical, vapor, or toxin in less than ten seconds with part-per-trillion sensitivity. It can detect virtually any kind of explosive as well as over 3,000 different chemicals and compounds.

Let me tell you a little bit about how it works.

Let's suppose a suicide bomber wielding a water bottle full of chemical explosives attempts to board an airplane, bus, or train. Using the aging screening methods the explosives would slip right through. That's because traditional screeners are mainly looking for metal products.

But the zNose would detect the compounds within 10 seconds and save hundreds, maybe thousands of lives.

You see once the zNose detects any suspicious odors, the system creates a visual display of the chemical onto any conventional computer screen making it easy to quickly evaulate and elimate the threat.

The sad part is that this technology has only been recently perfected. If it existed ten years ago it could have saved countless lives.



This company's technology could have:
prevented the maniac shoe bomber Richard Reid from ever boarding American Airlines flight 63
prevented the 1995 attack on the Tokyo subway system that killed dozens of commuters and injured over 5,000
detected the explosives used in the Oklahoma City bombing and saved the 170 innocent Americans who were inside.

The zNose might have even been able to stop the recent terrorist attacks in London.

Government agencies and public companies such as the Army, Navy, Air Force, Marines, US Department of Agriculture, SC Johnson, Honeywell Corporation, and Lockheed Martin have already invested millions of dollars in the zNose.

This company has been researching and developing chemical vapor analysis technologies for over ten years. In other words, they're the experts in this field.

There are four sub sectors of the homeland security market where I believe this technology will revolutionize security.

Sub sector #1: Airport Security

Existing non-visual screening technques are limited to metal detection. But that's not enough to stop today's terrorists.

Like I exlpained before, the zNose can detect threats beyond the conventional.

And the market is there. Government and private sectors are already willing to spend more to protect air travelers. Over the next five years airports expect to spend close to $4 billion to modernize baggage and cargo screening. But that's just the tip of the iceberg.

Last year over 650 million people traveled by air. That's about 1.8 million per day who need protection. I believe the zNose will become the standard of airport security.



Subsector #2: Maritime Port Security

Our nation's ports have been identified as one of the biggest security threats the country is faced with. This has led to the development of new more advanced container security systems that will give way to an $840 million market over the next few years.

The zNose is able to sniff out any biological, chemical or radiological elements within containers.

When you study the numbers, as I have, you begin to realize how big the problem really is and serious this threat really is. Over 9 million cargo containers arrive to American port each year. But here's the truly frightening part...only 2% of the seaport cargo is thoroughly inspected!

With so many containers there just isn't enough manpower to search each and every one. But that's exactly what this company's technology does. The zNose will enable security officers to quickly and accurately search and detect possible safety hazards.

There are 185 deep ports in the US and most are in major cities. Even a relatively small attack could kill hundreds of thousands.

Let me give you an idea how big of a threat this is. If one 10-kiloton weapon were detonated in a major seaport it could instantly kill upwards of 1 million innocent Americans...direct property damage could excess $500 billion....direct disruption of trade could result of a $200 billion loss with and indirect loss of over $1 trillion!

And I haven't even begun to discuss other illegal contraband that this technology can detect like illegal drugs that are transported through seaports by the tons each and everyday.

Subsector #3: Border Security

Unfortunately America's borders have been easier to cross than a dirt road.

The numbers are nothing less than shocking.
As many as 20 million illegal aliens currently reside in the US
In 2004 the US Border Patrol arrested 1.1 million illegal aliens who attempted to cross into America along the 1,950-mile U.S.-Mexico border...up more than 24 percent in 2003
In a single day, more than 4,000 illegal immigrants walk into Arizona alone
Last year Customs and Border Patrol argents made 56,321 seizures of illegal drugs weighing a total of almost 3 million pounds with an estimated street value of over a billion dollars

The zNose uses nonintrusive measures to accurately investigate any vehicle or person entering through our borders and identify them for threats.



Subsector #4: Building HVAC security

Even the air we breathe is at risk. A terrorist could easily slip a chemical agent into any office or shopping mall HVAC system and kill hundreds of innocent people.

Consider the dangers of bioterrorism:
A simple pinhead full of ricin is enough to kill an adult man.
Phosgene is a nasty agent that can cause your lungs to fill with water causing suffocation
The nerve gas sarin can shut down your nervous system causing death in just minutes

Building HVAC is probably the easiest target for a terrorist attack. Think about it. When you go to the mall there is no virtually no security. (That is other than the rent-a-cops. And if you're like me you wouldn't trust those guys with a firecracker.)

But there's more. The zNose has several commercial applications as well.
Environmental Industry - it can analyze chemical compositions at environmental testing and clean up sites
Aeronautics and Space - it can detect leaking propellant or jet fuel.
Petrochemical and Petroleum - it can ensure greater quality control by monitoring processes.
Postal Services - it can screen chemical, biological agents as well as contraband such as drugs.
Chemical Industries - it can detect leaking chemical that could lead to disaster business and employees.
Food and Beverage - it can provide quality inspections by detecting harmful bacteria, molds, and other spoilages on foods.
Medical and Life Sciences - it can be used for blood, urine and breath analysis.
Agricultural - it can detect contaminants in soil.
Law Enforcement - it can be used to detect drugs and alcohol
Oil and Gas Companies - it can detect for carcinogens like Benzene in gasoline and other fuels

The possibilities are really limitless.

EST's share price has been on the gradual decline, but has been rebounding of late.





I believe that EST is ready to go. That's because in the past two weeks EST has received two order totaling $4.25 million, which is really not a whole lot of bread to a company like Lockheed Martin. But you have to remember, EST is a blip compared to LMT.

I believe that the zNose is the future of homeland security and will become an industry standard.

The stock trades for $0.56 a share. I consider it a speculative play in the highly volatile microcap security sector. Because of this, I'm recommending it for purchase with a tight buy limit up to $0.65 a share. Don't chase it. If your order doesn't get filled, wait.

In addition, place a 25% stop-loss on this position.