With their “chill” status now removed IDO Security Inc. (OTCBB: IDOI) has been making an effort to attract investor attention and drum up interest in their shoe scanning device, MagShoe, a metal-detecting device designed as a “shoes-on” screening machine that “maximizes security, thoroughness and accuracy while eliminating the need to remove shoes for increased convenience and safety.”
Activity in IDOI has been picking up over the past few days and volume is already nearing the 1 million mark in the first hour of trading on Thursday. Along with the trading spike IDOI’s share price has jumped as well, hitting 0.430, a one-month high and closing in on the three-month high of 0.485. Of course this activity and price jump can be attributed to a recent promotional campaign rather than anything done by IDO Security.
In fact, IDOI hasn’t done much in the way of distributing news over the past several months other than announcing that the Depository Trust Company (DTC) had removed the “chill” status from their stock, something that took more than a year, and reporting their first quarter financial results back in May.
As for the “chill” status being lifted IDOI President Michael Goldberg commented “We are gratified that our stock is once again DTC eligible, which will now enable our stock to be traded freely among shareholders and the investment community in the market.” Goldberg went on to say “We continue to make strides in improving the Company’s capital structure and we look to a better and brighter future in building shareholder value as our flagship product, the MagShoe, continues to expand its market presence around the world.”
Looking at IDOI’s first quarter results it would be hard to deny that MagShoe’s market presence hasn’t increased as revenue for the first three months totaled $204,564 compared to $19,161 for the corresponding period in 2011. In fact, the first three months of 2011 produced revenue greater than all of 2011. This increase has been attributed to “the substantial increase in the number of MagShoe devices delivered to customers in Africa, Europe and the Far East.”
Goldberg commented in IDOI’s quarterly report “The successful efforts from our marketing and sales team have increased our sales of the MagShoe into additional markets above and beyond airports and government facilities to now include correctional facilities, mints and other loss prevention markets. We will also look to add other state-of-the-art security devices to put through our distribution system to expand our product line and increase the awareness of IDO Security as a seller and supplier of security devices.”
While all of this is positive there is one glaring market that has remained elusive, the United States, this despite a distribution agreement the company entered with JEI, Inc. back in October 2010 in which JEI submitted the MagShoe to the U.S. General Services Administration (GSA) for approval and ultimate sale to the various Federal Agencies. This isn’t to say that IDOI needs to have GSA approval to ensure success but without the ability to enter the U.S. market the opportunities for IDOI are unquestionably limited.
For IDOI to succeed they may have to concentrate their efforts on a more specific market. As it stands they include international airports, cruise lines, government agencies, correctional facilities, mints and more. Targeting airports may not be as fruitful as they appear as passengers have grown accustom to removing their shoes prior to screening and it has essentially become an accepted practice.
Where IDOI could find success is in something like entertainment venues and sporting arenas, essentially destinations that still require security checks but without the red-tape and restrictions that go along with facilities overseen by government agencies.
As it stands IDOI is trading well above their 50-day moving average of 0.346 and their 200-day moving average of 0.354 but that could be due in large part to the current promotional campaign focusing on the company. Whether or not they will b able to maintain this share price spike in the future is yet to be seen but if they want to they will almost certainly have to start delivering positive results on a more frequent basis.