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DD on FOCS: 2/18/00
Intrex Data Com merger with (FOCS) FiberChemInc to form Decision Link Incorporated.
As has been suggested by another poster, do not be surprised if the StockStalker picks this one as a main pick! It already has been selected elsewhere. IMO THIS IS A LONG-TERM HOLD! IMO the growth prospects are strong.
This is an extremely unique merger situation that has STRONG, STRONG POTENTIAL TO SELL SERVICES AND A PRODUCT BECAUSE OF WIN-WIN PROSPECTS. The services offered by this merger would be strongly demanded because of legislative mandates, large manufacturer?s desire to prevent ground and underground polluting problems to save cost of cleanup, the provision of the patented, unique technology by FiberChemInc, and tremendous interest in protecting the environment. It is also a "wireless" play, a "fiber optic" play, and a pure-and-simple "technology" play.
I spoke with FOCS, which has it?s offices in Nevada. FOCS was created when a small company in California with related technology joined forces with a small company in Albuquerque, New Mexico, with both companies relocating to Nevada in 1989 to form one new company. FOCS ? CEO is Geof Hewit (chemist who brought experience with portable gas chronography to company, has unique ability to raise money from investors and sell products, combining technical knowledge with people skills). The Chief Financial Officer is Mel Kelly, (CPA, with FOCS for 5 years, bringing considerable experience to company from previous related work). Both men are 56. Geof knows the technology and can sell anything and Mel astutely keeps the expenses under control! They comprise a unique team that has brought STRONG MANAGEMENT, LEADERSHIP, and VISION to FOCS, resulting in a company 20 people large who are dedicated and completely committed to company goals. These individuals include engineers, scientists, chemists, physicists, and individuals whose training and expertise cross over between disciplines. Donna, the assistant administrator to Geof Hewit, is knowledgeable and articulate.
FOCS has a unique real-time leak sensor detection technology. There are no other patents for these sensors ? they have exclusive rights.
More specifically, FOCS has patent protected fiber optics chemical sensors that detect through specific light variations (changes in way light travels through the fiber optics) hydrocarbons in the vicinity of the fiber optics. The media sensors detect water or vapor. They can be used to detect leaks in oil lines, in tanks, and through other means, in water, through the air. They incorporate digital electronics to make sense of the fiber optics delivered signals.
Previously, detection reporting was largely on site, using a "hard-wired" procedure. The merger with Intrex Data Com, a private company, is a wedding that allows the sensors to join force with a communication means to detect these leakage signals remotely.
Intrex has a contract with ORBCOM, which in turn is owned by TGO and Orbital Sciences (both NYSE companies). ORBCOM owns satellites. Hence, this merger is a union that permits the potential for global-wide detection and remote satellite signal transmission. Pollution leaks can be instantaneously identified and halted in very quick order!
Major oil and power companies do not want to be held accountable for oil and gas leaks. Clean-ups are tremendously expensive. Regardless, legislature is increasingly requiring that these companies DETECT LEAKS and clean up. FOCS has been working with Florida which has across the board legislature mandating detection and cleanup. Florida has had major problems with oil and gas leakage and waste from manufacturing companies because the water table is close to the surface. Florida legislature has established a precedent with DETECT and CLEAN-UP legislation. Since December 31, Florida has begun to inspect tank farms (above ground storage tanks) and pipe lines, using FOCS instrumentation. The other states that have varying stages of legislative approval and which will similarly mandate detection and cleanup in the coming year are Alaska, New Jersey, Virginia, Pennsylvania, and Wisconsin.
Hence, the new company, Decision Link Incorporated will have impetus for its service and product usage because of legislative mandates.
However, there is also a reason why manufacturers would seek out and contract this company. By including fiber optics in newly laid tanks and pipe lines (whether it be oil or gas or sewage/waste disposal related), industries have the unique advantage of immediate leak detection in order that expensive clean-up can be prevented. Hence, one of the future prospects is that Decision Link will be sought out by all types of manufacturing companies, particularly oil and gas companies, because laying fiber optics, resulting in early leak detection and clean-up prevention, is far less expensive than the cost of extensive leak clean-up. For example, platform oil rigs have been banned from using freeon a number of years ago to detect leaks. Within the last 3 to 4 years, FOCS has assisted a number of these platforms in using their fiber optics rather than volatile, hazardous chemicals to test the water. FOCS has particularly experienced major contract break-throughs this year because of Florida?s legislative mandates.
Apart from seeking out services for costly preventative clean-up reasons, industries will be increasingly mandated to seek out such assistance to clean up leaks. Because FOCS has a unique niche in this market, they will be sought out for both "preventative" and "corrective" reasons. Contracts with companies for "preventative" purposes can result in additional contracts for "corrective" purposes, and vise versa. This dynamic has the potential for contracts increasing geometrically at some point! I believe the future growth prospects of this newly created company are HUGE!
IMO we have a RARE SITUATIONwhere Decision Link Incorporated will be sought out and promoted by two interest groups that are historically at odds with each other ? the environmentalist and the manufacturer. The environmentalist would advocate usage because of "corrective" reasons and the "manufacturer" would seek out usage because of "preventative" reasons.
I was told by FOCS that one of the goals of the newly created company would be to increase recruitment to market the company. Additionally, Intrex owns websites and is prepared to set and advertise expansively on the Internet.
IMO this is a company that has tremendous growth potential. I also believe that this company has the fortitude to set goals to obtain NASDAQ status in a timely, efficient manner with few if any obstacles.
From an ethical perspective, this is the type of company I like to invest in. The other aspect of the WIN-WIN proposition is that we can all financial benefit while we support a company that protects the environment and makes the world a better place to live. There is truly something elegant when the company and the investors have the potential to realize great wealth in the process of obtaining noble goals. And the industries that contract usage of the new companies resources will financially benefit, as well, through the usage of the more cost-effective preventive measures.
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
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