CORPORATE PROFILE October 2007 VUANCE, Ltd. (NASDAQ: VUNC; Euronext: VUNC) develops and markets innovative Radio Frequency Verification Solutions to view, track, locate and manage assets and personnel for selected vertical markets. Established in 1988, the Company provides end-to-end, seamless incident management, active RFID, electronic access control and credentialing solutions that enable government agencies, institutions and commercial enterprises to “view every nuance” for site and homeland security, public safety and real-time location services. Business Partners skilled in system integration and 24/7 support deliver Vuance to the end-user. Its Incident Response Management System (IRMS) is the industry's most comprehensive mobile credentialing and access control system. It’s designed to meet homeland security and public safety needs where interoperability between multiple rescue agencies is absolutely essential. Clients include several localities, including the cities of Los Angeles (CA), Columbus (OH), and three populous Northeastern counties. The Company’s Active RFID product line is an integral part of a complete cost-effective solution for the continuous tracking of assets and individuals. Safety applications include monitoring of first responder emergency forces, containers and vehicles; commercial and institutional applications include hospitals (drugs and personnel), schools, correctional facilities, transportation, warehouses, and oil and gas pipelines.
FINANCIAL INFORMATION Exchanges: NASDAQ CM; Euronext Symbol: VUNC Recent Price: $5.20 52 week range: $1.45-6.58 Shares Outstanding: 5.1 M Market Capital: $26.5 M Float: 1.85 M 2nd Quarter ended June 30, 2007 Total Revenue: $2.8 M Gross Income: $1.7 M Net [P/L]: ($1.33M)
Originally founded as SuperCom Ltd. to address global needs for smart card products, over the past year, Vuance has repositioned itself to focus on the US market. To do so, it sold its non-US smart-card businesses and purchased a Milwaukee firm with both complementary products and a distinguished network of system integrators and distributors. It also appointed key US experts on terrorism to its Advisory Board, and moved its corporate headquarters to McLean, Virginia. With income from US and international contracts (e.g., a recent $13.8M one with a European airport), recurring revenues from “legacy” contracts from sold-off businesses, cash and marketable securities, Vuance’s experienced management team is positioned to accelerate growth and increase shareholder value. For more information, see www.vuance.com. 1. 2. 3. 4. 5.
TABLE OF CONTENTS Investment Considerations 6. Growth Strategies Company Highlights 7. Leadership Team Market Opportunities 8. Financial Update Solutions & Applications 9. Conclusion Sales Strategy
COMPANY CONTACT Eyal Tuchman, CEO Vuance, Ltd. 2010 Corporate Ridge #700 McLean, VA 22102 (806) 840-2762 email@example.com
INVESTOR CONTACT Jerry Cahn, PhD., JD Target 3 Communications 20 West 33 Street (9th floor) New York, NY 10001 (646) 827-0009 firstname.lastname@example.org
SAFE HARBOR: This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded or followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Forward-looking statements in this release also include statements about business and economic trends. Investors should also consider the areas of risk described under the heading "Forward Looking Statements" and those factors captioned as "Risk Factors" in the Company’s periodic reports under the Securities Exchange Act of 1934, as amended, or in connection with any forward-looking statements that may be made by the Company. The Company also disclaims any duty to comment upon or correct information that may be contained in reports published by the investment community
1. INVESTMENT CONSIDERATIONS Vuance Ltd. is an established Solutions Provider focused on delivering seamless, end-to-end innovative Radio Frequency Verification Solutions for security, public safety and real-time location services to select vertical markets. • Market Opportunities: The terrorist events of 9/11 and recent natural disasters (e.g., Hurricane Katrina) have demonstrated the need for interoperable communications and new incident management solutions for first responders. In the US alone, over $63.1B has been allocated by major federal agencies (e.g., Departments of Homeland Security, Defense, Justice, etc.) with substantial amounts allocated to grants for states and local agencies to comply. • Track-record: Vuance has a proven 19 year track record of reliably providing cost-effective solutions. Its Electronic Access control solutions for viewing, tracking, locating, credentialing and managing mission-critical assets and personnel, enable clients to “view every nuance”. In contrast, its competitors address only a portion of the incident management requirements mandated by the federal government and only part of its extensive set of RF solutions. • Strategic Partners: Vuance works with leading system integrators and distributors to reach its clients including: Bearing Point, Accenture, Graybar, Northern Video Nexus and Metroplex. • Management Team: Its experienced management is supported by is an Advisory Board consisting of leading industry experts. R, James Woolsey, former Director of the CIA, Oliver, “Buck” Revell, former Deputy Director of FBI, and Dr. Neill Livingston, noted expert on terrorism, enhance Vuance’s position in the US and help identify new applications for the Company’s technology. • Growth Strategy: Its recent acquisition of Security Hold Corporation (SHC), a US distributor of RFID security management and access control systems and equipment, demonstrates its intent “leapfrog” growth through strategically. • Financial Platform : Vuance’s growing US-based business, overseas contracts (including a European airport in Q3 for $13.8M), recurring revenues from servicing businesses it sold to On Track Innovations (which is expected to generate $5-8M annually for the foreseeable future), provides a solid base for growth. It is supported by a balance sheet with cash and marketable securities.
2. COMPANY HIGHLIGHTS Vuance Ltd. was incorporated as SuperCom Ltd. in Israel in 1988 and became a publicly traded company in 1999. As a development stage company, SuperCom focused on commercializing “smart card” technologies for governmental and commercial secured identification markets. It contracted with companies in such countries as Israel, Moldova, China, Hong Kong, the United Kingdom, and African counties. Although revenues increased, profitability was elusive due to high-cross-over marketing expenses. In May 2006, the company’s US subsidiary received a General Services Administration (GSA) Federal Supply Schedule Contract for products including its Homeland Security and first Responder product line. The contract award acknowledged that its products were compliant with National Incident Management System (NIMS) and Incident Command System (ICG) requirements, and authorized US federal and state agencies to buy them from a GSA-approved price list with agreed-upon terms and conditions. With an ability to now focus on US market opportunities related to homeland security, anti-terrorism, incident management, tracking and tracing of mission critical assets objects and personnel by government agencies, institutions and commercial enterprises, the Company sold its smart ID-division with global contracts (e.g., Europe, Asia and Africa) to On Track Innovations ltd. (NASDAQ:OTIV). In exchange, the Company received restricted common stock (valued at the time at $15.1M) and entered in a service and supply agreement to receive revenues from existing contracts (estimated to generate $5-8M annually for the foreseeable future). To communicate its new focus, the Company in 2007 changed its name to Vuance, reflecting its mission of enabling clients to “view every nuance” when it comes to security, public safety and real-time location needs. In Q3, it acquired Security Hold Corporation (SHC), a manufacturer and distributor of RFID security management and Electronic access control systems and equipment for $5.1M in common stock to: • Expand its network of distinguished system integrators and distributors to reach new clients • Add complementary products and synergistic solutions • Enable the expanded sales team to cross-sell solutions to both companies’ existing client bases • Position Vuance to capitalize on new sales opportunities identified in public transportation, healthcare, law enforcement, warehouse/storage, and education industries. 2
In Q3, 2007 Vuance acquired the Credentialing Division of Disaster Management Solutions Inc., in order to add an advanced first responder credentialing system (RAPTOR) to its IRMS solution and bolster the Company’s presence in a variety of strategically important markets. To be closer to its Business Partners and end-users and its US sales team, Vuance Ltd. moved its corporate headquarters in Q3, 2007 to McLean, VA where its US subsidiary, Vuance Inc. is located, In addition to all these sales-related changes, in Q3, 2007 Vuance implemented a shareholder-focused change. It executed a reverse-stock split and listed its common stock on The NASDAQ Capital Market with the goal of increasing both the visibility of Vuance’s common stock and institutional shareholders’ ability to participate.
3. MARKET OPPORTUNITIES A. Market Drivers st
The 21 century has brought with it heightened need for security and public safety solutions. The terrorist events of 9/11 and natural disasters, such as Hurricane Katrina in 2005, have demonstrated the need for new solutions to address the management of such incidents and the need for interoperable communications between first responders – fire, police, EMS and other rescue workers – who come from different agencies and jurisdictions. Presidential Directive HSPD-5 established a single comprehensive national incident management system for domestic incidents. HSPD-8 established a national domestic preparedness goal with target levels for that federal, state, local and tribal entities must achieve to perform critical tasks for homeland security missions. HSPD-12 established requirements for common personal identification (ID) verification standards for all federal employees and contractors. This common approach to national preparedness, known as the National Incident Management System (NIMS), with its security, infrastructure, protection and Incident Command System (ICG) requirements, provides a consistent framework for incident management at all jurisdictional levels regardless of the cause, size, or complexity. It provides first responders with a common foundation for addressing terrorist attacks, national disasters and other emergencies. NIMS is complement by a National Response Plan (NRP) that provides the structure and mechanisms to coordinate and integrate incident management activities and emergency support levels, across federal, state, local and tribal entities as well as the private sector and non-government institutions. Since 2002, the Department of Homeland Security (DHS) has allocated over $20 Billion in grants and awards to state and local agencies to implement projects throughout the US. For FY2008, the gross “homeland security” budget authority for over 31 agencies is over $61 Billion, including Department of Homeland Security ($42.6B) and the Departments of Defense (DOD, Health and Human Services (DHHS), Justice (DOJ) and Energy. This includes $2B in grants for First Responder Preparedness, $1B in interoperable communications grants. $5B already has been allocated to states, localities and tribal entities. In addition, commercial enterprises and institutions have their own pressing needs for electronic access control solutions. Tragedies (such as those at Columbine (OH) and University of Virginia) and threats to facilities providing vital services and supplies, underscore the needs for schools, correctional facilities, hospitals, energy pipelines, etc. to expand their budgets to protect employees, members and community constituents.
B. Business Opportunities 1. Public Safety and Security: As a result of the need for electronic access control, credentialing and real-time tracking of assets and individuals for public safety and security, the market for IRMS solutions offered by Vuance is estimated at $500 Million in 2007. This includes using the technology to assist: • First responders (e.g., to manage communications and accountability) • Law enforcement (e.g., to manage crime scenes and correctional institutions) • Nuclear facilities • Oil rigs and gas pipelines • Hazardous material locations. The market is projected to grow at a 30% CAGR and reach over $1.4 Billion by 2011. 2. Real-Time Location Systems. The RTLS market for the solutions offered by Vuance to track and trace assets and people is estimated to be $390 Million in 2007. This includes: • Security & Defense (e.g. tracking of rescue workers) • Medical facilities (e.g., tracking of hospital assets (drugs, equipment and personnel). • Public facilities (e.g., schools, universities and government buildings) • Commercial logistics (e.g., warehouse and storage) • Transportation (e.g., public transport and auto vehicles) • Specialty assets (e.g., animals, mining operations • Law enforcement (e.g., evidence records) The market is projected to grow at a 30% CAGR and reach over $1.2 Billion in 2011. 4. SOLUTIONS AND APPLICATIONS Vuance offers two premier product-lines in which complementary technologies are integrated to provide comprehensive solutions for clients. A. Incident Response Management Systems (IRMS)
VUANCE’s IRMS subsidiary offers a comprehensive, integrated solution that state and local public safety workers (police, fire, EMS and other rescue workers from other agencies) can use to comply with the Homeland Security NIMS directives which address security, infrastructure protection and incident command systems. It includes: • • • • • • •
Perimeter security Mobile access control Credentialing and identification technology to manage personnel First responder accountability and communications interoperability Property control Smart cards and readers RFID tags
IRMS allows appropriate government agencies to quickly establish a secure wireless and/or 900 megahertz (MHz) communications and access control perimeter surrounding an incident site in less than 15 minute by emergency personnel with little or no training and operates independent of local power availability. This provides total accountability over first responders and other personnel and/or assets entering and leaving the scene. The 900 MHz technology includes the ability to communicate on a non-line of sight basis over miles. Mobile enrollment and credentialing systems issue smart-card credentials, with or without biometric verification (e.g., fingerprint) and update databases instantly to ensure accountability for all people within an incident scene or secure area. Lightweight, rugged verification units that read contact and/or contactless smart cards, as well as driver’s licenses and barcode enabled ID cards communicate with local incident management or a remote headquarters facility. Responders communicate across technological and organizational boundaries without changing equipment using interoperability links made between military and civilian radios with all types of telephones (cell, satellite, land-line, etc.). Finally, Vuance’s equipment can be equipped with weatherproof and shock-resistant RFID devices to track critical equipment and other assets within and surrounding the scene. 4
With RAPTOR, the new technology acquired in Q3, 2007, IRMS allows for appropriate credentials issuance through compartmentalized storage and secure retrieval of trusted identity, training, skills and licensure data. Using a system of advanced registration through a web-based portal, RAPTOR authenticates the registrant’s identity and verifies the provided information through primary sources. Data are stored and processed within a card’s memory and/or microprocessor chip(s). It is a scalable solution that can serve as the primary repository of a public or private credentialing program and/or be integrated with additional databases to provide comprehensive functionality to agencies. Some of the current IRMS applications include: • City of Columbus, Ohio (2005) – first responder focus • Los Angeles, CA ( 2006) – city and police department • 3 highly populated county governments in the US Northeast (2007) – first responders • US Army mobile access control units • Correctional institutions – access control With RAPTOR and some technology from SHC, Vuance has additional products to integrate into its IRMS solution and bolster the Company’s ability to enter strategically important markets. Markets on Vuance’s radar include health care, law enforcement, and oil and gas. B. Active RFID Real-time Location Services (Pure RF) The Pure RF technology suite offers end-to-end wireless solutions for actively tracking and tracing people, objects and assets on a real-time basis. RTLS tracks large numbers of items simultaneously providing an active set of different signals and alerts. The software and hardware rely on small, low-powered, RF (radio frequency) tags that are attached to an object or person. License-free radio bands are used to track the RF signal and can be read on hand-held devices. The transmitter can be programmed for periodic or event-driven transmissions. Vuance has identified other applications for RTLS exists from a safety and/or profitability standpoint and is actively pursuing them. When it acquired SHC, it also acquired its AAID™ Security Solutions, a distributor of AutoAccess™ long range, hands-free Vehicle Identification, Asset/Personnel Tracking and Emergency Evacuation/Mustering Systems based on Wavetrend RFID technology. Using ultra long-range RFID readers, tags, applications software, clients can track visitors, reduce loss prevention (stolen vehicles), control access, and guide emergency evacuations. Additional markets on Vuance’s radar include law enforcement (to track evidence) and hospitals (to track assets like drugs & equipment, and people including patients & visitors). C. Branded Security Enterprise Product-lines. With the acquisition of SHC and its subsidiaries’ products and solutions, Vuance now has a new set of branded products which are sold through business partners into commercial enterprises, institutions and local governments. These include: • AAID’s AutoAccess ID product line consists of readers, tags, antennas, custom software, access control panels, tag mounting devices, power supplies and accessories, which are sold to installing dealers, wholesale distributors, vertical market systems integrators, and private label strategic partners. In addition, AAID provides consulting services and application design assistance to end users, architects and security consultants. • Compass Technologies provides specialized access control solutions for the university marketplace. Its modular and scalable approach for lock-down and paging/notification has helped school systems (e.g., including Columbine and Rutgers) to address the complexities and challenges of current security requirements. It is sold through regional system integrators serving this market. • MASC (Managed Automated Security Controls) offers integrated solutions for commercial enterprises that want to control access, detect intrusions and provide alarm monitoring, intercom, video surveillance and touch-screen convenience with other security systems in one seamless software package. The MASC design is capable of incorporating smart cards which meet NIMS/ICS specifications. It is sold through regional and national system integrators serving this market. • Clarity Software and Insignia Hardware offer a software-hardware access control solution suitable for smaller businesses. It is sold through distributors and dealers who specialize in security solutions. 5
5. SALES STRATEGY Vuance has a two-pronged sales strategy: • Develop strong strategic relationships with business partners – systems integrators and distributors – who introduce Vuance’s solutions into their respective markets. These include: Bearing Point, Accenture, Clark Security Products, Graybar, CSC, Northern Video Systems, Scan source Security Distribution, and Wynit. • Employ dedicated sales teams to work closely with the business partners who can sell specific solutions to in their respective markets. The four dedicated sales teams are: IRMS and RAPTOR sales to government agencies and commercial enterprises. Vuance’s team responds to bids through system integrators involving RFPs from these clients requiring COTS (Commercial Off The Shelf) Solutions for many challenging applications. o RFID sales through leading system integrators. Vuance’s team customizes and adapts solutions that can then be installed and supported by these Business Partners. o Electronic Access Control Systems sold through distributor and dealers (e.g., Insignia, Clarity and other security solutions). This team focuses on the seamless solutions that can be sold. o Electronic Access and Control Systems sold through regional system integrators (e.g., Compass, MASC and other defined products). The team provides needed product support. Key to Vuance’s success is that it is the only company to focus on providing end-to-end, seamless solutions to meet the access control, credentialing and real-time location services. IRMS competitors like Salamander Enterprise Air, Corestreet, and Raytheon, offer limited solutions. Competitors providing Active RFID solutions, like Lockheed Martin’s Savi, Wherenet, RF Code, and Sovereign, focus on specific market places, such as transportation or health. o
6. GROWTH STRATEGIES Vuance has a multi-pronged approach to growth. • Build a Superior Sales Engine. Vuance is accomplishing this by moving its corporate quarters to the US and dedicating four sales teams to support the different sales channels, sectors’ unique needs. • Grow organically. o Increase the customer value (e.g., smaller size, greater range and lower costs) o Identify new applications for existing products and solutions o Develop new products/solutions that meet clients needs • Make Synergistic Acquisitions. Continue to “leapfrog” growth through strategic acquisitions of companies with complementary products and relations with strategic partners and clients, as it has with its SHC and RAPTOR acquisitions. • Improve Relationships with Investors. With Vuance’s common stock now listed on the NASDAQ Capital Market, and priced around $5, it will gain greater visibility, especially among institutional investors. To help tell the story to industry specialists, investment bankers, money and hedge fund managers, brokers, and other investors, Vuance in Q3, 2007 engaged Target 3 Communications, an integrated IR/PR firm.
7. LEADERSHIP TEAM Vuance Ltd.’s experienced management team is part of its competitive advantage. Headquartered in McLean, VA, which also hosts its US subsidiary, Vuance, Inc., the Company also has US offices in Wisconsin (central Shipping and logistics), Pennsylvania (service and support), Georgia (AAID service and support). Vuance also has an office in Hong Kong and operates its RF research and development facility in Israel. A. Senior Management • Eli Rozen, Chairman of the Board – co-founder SuperCom Ltd. Prior to SuperCom, he founded and served as President of Electrocard Ltd., the predecessor of SuperCom, which was active in the ID card market. • Eyal Tuchman, Chief Executive Officer – joined the Company in 2002 as CFO. Prior to joining he served as CFO of Magam, a public company traded on the Tel-Aviv Stock Exchange. Previously, he was
a Senior Auditor at Kesslman & Kesslman, on of the top five CPA firms in Israel. He holds a CPA and received a BA in Economics & Accounting from Ben Gurion University, • Joel Konicek, Chief Operating Officer. The former CEO and President of Security Holding Corp., he joined the company when SHC was acquired in 2007. With extensive hands-on experience with security systems used by commercial enterprises, he published Security, ID systems and Locks, the Book on Electronic Access Control in 1998. He holds a B.Sc in Engineering from University of Florida. • Lior Maza, Chief Financial Officer – joined in 2007. With 10+ years of financial management experience, he previously served as Finance Director at PowerDsine, Ltd. (NASDAQ: PDSN), a pioneer in Power over Ethernet (PoE) solutions (later acquired by Microsemi Corp. (NASDAQ: MSCC)). Prior to that, he was Corporate Controller of Invoke Solutions, an innovator of real-time, interactive research technology. A CPA, he received an MBA with distinction from Heriot-Watt University, Edinburgh Business School. • Ron Peer, Senior VP, Business Development. With 20+ years experience in the Israeli and US Hi-Tech industries, he’s held many top management positions in Vuance where he leveraged his in-depth marketing and business vision. He has an expertise in brand counterfeiting and document security solutions. Previously, he directed several startup and turnaround situations, recruiting and developing strong management teams to achieve success. Mr. Peer holds a B.Sc in Electronic Engineering, and Business and Marketing Diplomas from Tel-Aviv University. • Jim Perutkca, CTO, Vuance. The former CTO of Security Holding Corp., he joined the Vuance in 2007. A 30 year veteran of the security industry, he’s a specialist in RFID empowered electronic access control for wide area networks. Previously, he founded and led JRP Data Systems • Moshe Wolfson, CEO Vuance Inc. (US subsidiary) and VP Sales NA. With 20+ years of expertise in Information Technology, he joined VUANCE in 2003. Previously, Mr. Wolfson was Vice President of Sales and Marketing at dsIT Technologies, a solution technology provider for Real Time military solutions. Prior to this, Mr. Wolfson was Executive Vice-President of Malam Systems, one of Israel’s major Systems Integration and Software Development companies and managed the IT Division. He also served in the Israeli Army Computer Center. Mr. Wolfson has a M.B.A. from Tel Aviv University and a B.Sc. in Mathematics and Computer Science. B. Advisory Board • R. James Woolsey, Chairman, served as Director of Central Intelligence from 1993-1995. He is currently Vice President of Booz Allen Hamilton's Global Strategic Security practice. Woolsey previously served on the National Commission on Terrorism. He was Under Secretary of the Navy, Ambassador to the Negotiation on Conventional Armed Forces in Europe (CFE), and was General Counsel to the U.S. Senate Committee on Armed Services. Woolsey was appointed by President Reagan as Delegate at Large to the U.S.-Soviet Strategic Arms Reduction Talks (START), and the Nuclear and Space Arms Talks (NST). He also was an Advisor with the U.S. Delegation to the Strategic Arms Limitation Talks (SALT I). Woolsey served on the President's Commission on Defense Management, President's Commission on Federal Ethics Law Reform, and President's Commission on Strategic Analysis. He was a Captain in the U.S. Army and was a staff member for the National Security Council. Mr. Woolsey is a graduate of Stanford (Phi Beta Kappa), holds an M.A. from Oxford University (where he was a Rhodes Scholar), and received a L.L.B. from Yale Law School (where he was Managing Editor of the Yale Law Journal). • Neil C. Livingstone, Member, is the CEO and founder of Global Options, Inc., an international risk management and business solutions company headquartered in Washington, D.C, and part of the GlobalOptions Group, a public company with $70 million in annual sales. "One of this nation's preeminent authorities on terrorism” as described by NBC’s Tom Brokow, Dr. Livingstone authored nine books on terrorism, security, and foreign policy and published more than 200 articles. He has spent more than two decades advising clients regarding a wide array of complex and intractable problems, ranging from the prevention of industrial espionage to conducting internal investigations, suppressing the theft of intellectual property, advising corporations on political and economic risks, protecting corporate leaders and celebrities, and recovering hostages and kidnap victims. Leading corporations and institutions routinely seek his views on a variety of topics. To date he has delivered more than 500 major addresses, both in the U.S. and abroad. He also has advised top government officials and testified before Congress. An Honors graduate of the College of William and Mary, Dr. Livingstone also has an M.A. from the University of Montana, and an M.A., M.A.L.D., and Ph.D. from the Fletcher School of Law and Diplomacy. • Oliver “Buck” Revell, Member, is President of the Revell Group International (RGI), a global business and security consulting firm comprised primarily of former senior FBI, law enforcement, 7
security service, intelligence, diplomatic and military officials with a broad range of experience. For 30 years, he served as a Special Agent and Senior Executive of the Federal Bureau of Investigation (1964-1994), and from 1985 to 1991 as Associate Deputy Director (SES-6), where he was in charge of the Investigative, Counter-Intelligence, Counter-Terrorism and International programs of the Bureau. In 1987, he took charge of a joint FBI/CIA/U.S. military operation (Operation Goldenrod) that led to the first overseas apprehension of an international terrorist, a role for which he was commended by President Ronald Reagan. He retired in 1994 as an Associate Deputy Director. From 1999 to 2003, Mr. Revell was President of the Law Enforcement Television Network (LETN), a nationwide news and training satellite system for law enforcement. He is past Chairman of the Greater Dallas Crime Commission and is currently President of the Institute for the Study of Terrorism and Political Violence in Washington, D.C. Mr. Revell is a member of the Overseas Security Advisory Council (OSAC) at the U.S. State Department; and the Steering Committee, Trans-National Threat Project, Center for Strategic and International Studies (CSIS). He is also a member of CSIS’s Private Sector Advisory Group (PSAG) for the Department of Homeland Security and was the founding Chairman of the International Association of Chiefs of Police Committee on Terrorism. Revell is a respected commentator on national and international television networks on the subjects of terrorism, national security and criminal justice.
8. FINANCIAL UPDATE Over the past year, Vuance entered into two key financial decisions which enable it to focus on growth. • Vuance raised $3.15 million of additional capital through the issuance of convertible bonds and warrants to a financial advisor and leading micro-cap investment group (Special Situations), the bonds can be converted into Vuance common shares at a conversion price of $5.00. • Vuance also sold its non-US smart-card business to On Track Innovations (NASDAQ: OTIV). In exchange it received 2.872 M shares of restricted common stock with sales restrictions limiting 1/7 of the shares to be eligible each quarter (valued at the time at $15.1M). It also entered in a service and supply agreement which enable it to receive revenues from existing contracts which are estimated to generate $5-8M annually for the foreseeable future. Vuance ended its second quarter, 2007 with $2.8 million in sales and a gross margin of $1.7M, 56% higher than the prior-year period. Due to increased sales and marketing expenses, the company’s quarterly loss increased to $1.3M or $0.33 per share. The company ended the quarter with $2.9 million in cash and 15.7 million in marketable securities. Details are below.
9. CONCLUSION Vuance Ltd. brings several competitive advantages when bidding on homeland security and public safety related IRMS and Active RFID contracts and providing solutions for system integrators and distributors • It is the only company focused on providing end-to-end, seamless solutions to meet the security, safety and real-time location service needs of government agencies, institutions and commercial enterprises. • Proven 19 year track record of reliably providing cost-effective solutions to launching diverse projects to meet the needs of clients and strategic partners • Focused US sales strategy including business partner relationships with Industry-leading system integrators and distributors. • Commitment to grow organically and through strategic acquisitions. • Experienced management team supported by an industry-leading Advisory Board of top experts in homeland security, public safety and anti-terrorism.