Here you go boys & girls...the latest report from Aegis: (in...

Here you go boys & girls...the latest report from Aegis: (in part it reads)

Company Overview

QRS is an R&D company focused on developing and commercialising applications using Quadrupole Resonance (QR). QR uses radiowaves for material specific inspections and can detect a range of explosives, narcotics, and other substances. QRS’ first licensed technology is for explosives detection primarily to be combined with X-ray equipment for screening carry-on / handheld baggage in the aviation industry and in other screening applications aimed at protecting critical infrastructure and people. QR technology, which is
complementary to existing security screening systems, offers the potential to overcome the industry’s ineffectiveness to detect explosives by markedly improving detection performance and to reduce operating costs and disruption to passengers. QRS’ technology has been successfully tested by leading aviation authorities around the world, and the company has licensed its technology to international screening equipment suppliers and system integrators in the United States.

Strategy
QRS has developed a technology that provides a compelling value proposition to an industry that urgently needs to improve along the dimensions offered by QR. QRS has established a strong competitive position through patent protection, copyright and its commercial contracts. QRS’ market entry strategy is to develop QR applications to the point of commercialisation and then either license to major equipment suppliers or, if appropriate, manufacture itself. With the Company’s first products, equipment suppliers undertake product integration, manufacture, and distribution enabling QRS to focus on core R&D skills, maintain low fixed costs, leverage relationships and sales channels, and maximise potential market share while minimising product configuration risk.

Business Model
QRS has a simple business model. Revenues will primarily derive from per machine royalty fees and, to a lesser degree the provision of consulting services to commercial partners. The company has the ability to create additional products with the flexibility to choose between a manufacturing licensing strategy. Operating costs will comprise variable per machine licensing fees payable to BTG International and largely fixed operating costs associated with operations at Perth and the planned US office.

Catalysts
Potential positive catalysts include: (1) the signing of a major European
security screening equipment supplier, (2) successful completion of the technology integration process conducted by QRS’ commercial partners to develop a combined QR/X-ray baggage screening system, (3) release by the Transportation Security Administration of a carry-on baggage standard for explosives detection, (4) results of live airport trials for the combined QR/Xray system and (5) first sales of the combined QR/X-ray technology.


Industry Fundamentals
The aviation explosives detection market provides a high growth opportunity given recent government legislation and budgetary allocations and the shortcomings of existing technologies, specifically high false alarm rates, slow throughput rates, and expensive and disruptive labour input. We believe the screening security market will be receptive to QRS’ technology given it is complementary to existing products and it provides a large and obvious performance and cost advantage in an industry where there is a pressing
political and economic need to improve along the dimensions offered by QRS’ technology.

Power of Suppliers
Low: QRS’ is an R&D company that has very little in the way of supplies other than qualified R&D staff. At its current stage of technology development QRS does not have a great need for additional R&D resources.

New Entrants
Low: Barriers to entry are high due to patent-protected technology, high product Sophistication, significant learning curves, and limited access to qualified R&D personnel and distribution channels.

Rivalry
Low: There is only one other company developing QR for explosives detection. QRS’ patent portfolio and a natural reluctance of equipment suppliers to deal with a company that is also a direct competitor put QRS in a strong & defensible competitive position.

Substitute Products
Low: QRS’ technology is complementary to existing screening technologies with an ability to detect an additional range of explosives with a minimal increase in
cost. Existing and emerging technologies present minimal substitution risk.

Power of Customers
Low-Medium: Given QRS’ effective position as sole technology supplier and the ability of its technology to improve the competitive position of its customers’ product portfolio customer power is low.



So there you go guys...have faith and buy up big...I'm very confident we're on a winner here...despite the latest SP movements.


Cheers Leo