On December 5, 2018 Patriot One (PAT.V) announced its pre-qualification for up to $1 million from the federal government’s Build in Canada Innovation Program (BCIP) for testing by the Department of National Defence.
Story update: on December 5, 2018 PAT received an initial $287,000 (USD) purchase order from Smart CT Solutions for multiple PATSCAN threat detection systems.
Non-dilutive capital is always good.
But from a treasury-perspective, this isn’t earth shattering.
A tech company that detects concealed weapons from parking lots to buildings – PAT is already a darling of the capital markets – having recently closed a $46 million financing.
Raising money on Bay Street, and being backed by a federal government are two different levels of support – with two different meanings.
To raise the $46 million, Cannacord lead a syndicate of underwriters, offering 18,400,000 units at $2.50. Each unit comes with a warrant (PAT.WT.C) entitling the holder to purchase another share of PAT at $3.25 – any time in the next two years.
In the cold metrics of the markets, Cannacord’s motivations are easy to unravel.
Cannacord wants its clients to own a big chunk of PAT. Participating in a financing is a way to do that without putting in massive bids on the open market – which would drive the share price up.
Cannacord brokers get up early. They wear expensive suits. They are gregarious and knowledgeable about local sports.
But we are willing to bet that the total number of Cannacord experts in “high-frequency electromagnetics”, “counter-terrorism” and “facial recognition software” – is zero.
What Cannacord knows – is charts.
The federal government’s Build in Canada Innovation Program (BCIP) is not concerned with charts.
It is looking for tech innovators who are ready to move operations from the laboratory to the marketplace.
PAT’s tech will be vetted by teams of government scientists, offering a level of technical scrutiny unavailable inside Cannacord’s plush offices.
The program pays up to $500,000 for non-military innovations and up to $1,000,000 for military innovations.
The BCIP program helps innovators in these ways:
- land a first major sale
- keep control of the intellectual property,
- get their innovation tested in real-life settings
- help advance products to market faster.
Patriot One submitted its proposal to the program in early 2018 once the Company’s PATSCAN threat detection solutions achieved an adequate Technology Readiness Level (TRL).
PAT’s weapons detection technology was evaluated on the merit of innovation. Upon pre-qualification, the BCIP program sourced a Canadian Government Department as test partner.
Patriot One was pre-qualified under the military innovation component of the BCIP program.
The BCIP military component has six priority areas:
- Arctic & Maritime Security
- Command & Support
- Cyber-security
- In-Service support
- Protecting the Soldiers
- Training Systems
Patriot One meets the priority areas of Arctic & Maritime Security and Protecting Soldiers.
Other pre-qualified military inventions include Rolls-Royce Canada’s, “Contoured metal chute to provide improved cable guidance for winch level-winds, increasing cable life and reducing maintenance costs.”
It’s not hard to see why PAT’s pitch works so well with government funders.
Compared to “cable guidance for winch level-winds” – concealed weapons detection technology is a deliciously simple concept to digest.
We have been tracking PAT for two years, writing 24 articles including;
- December 20, 2016 PAT signs on Homeland Security Boss
- February 22, 2017 PAT expands its proprietary database of weapons “signatures”
- March 15, 2017 PAT signs a deal with University of North Dakota for a pilot study
- May 15, 2018 PAT goes to Washington
- June 27, 2018 PAT is turning me into a love sick fool
- September 12, 2018 PAT biz model makes more and more sense
- October 12, 2018 PAT share price spiking
- October 25, 2018 PAT Innovations with Cisco
- November 21, 2018 PAT raises $46 million
Although we get why Canada’s federal government is interested in military applications for PAT’s technology – as investors – we believe the holy grail is the U.S. commercial and retail market.
A September 12, 2018 Amnesty International Report made the remarkable assertion that “gun violence in the United States is a human rights crisis.”
According to the Washington Post, “there are more than 393 million civilian-owned firearms in the United States – enough for every man, woman and child to own one and still have 67 million guns left over.”
In 2016 (the last year of accurate statistics) over 38,000 people were killed and 116,000 suffered non-fatal injuries due to firearms in the United States.
Recently, numerous U.S. soft targets have been targeted by shooters: a grocery store in Kentucky, a synagogue in Pittsburgh, a yoga studio in Florida and a college bar in Thousand Oaks, California.
ABC affiliate KTNV Channel 13 Las Vegas, did a feature news piece on PAT’s weapons-detection technology.
“After months of testing and development inside the Westgate Hotel and Casino, employees from Patriot 1 Technologies were busy Tuesday demonstrating several products aimed at helping police and security identify potential threats,” stated KTNV.
“The ability to test our PATSCAN CMR and some of our other threat detection solutions in a real-life setting with an arm of the Department of Defense is exciting,” stated Martin Cronin, CEO and President of Patriot One, “As a Canadian-based company, we are truly honored to be part of this effort to protect our serving military personnel around the world.”
Full Disclosure: Patriot One is an Equity Guru marketing client and we own the stock. It is one of the companies we are extremely confident in – and proud of.
