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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Anthony@Pacific who wrote (52454)	3/5/2000 9:03:00 AM
From: Anthony@Pacific	Read Replies (1) \| Respond to of 122087

LOCK<--another Firm .initiates coverage ....on LOCK....explaining in further detail.. -------------------- PRN QUANTUM GROUP, LTD. BEGINS COVERAGE OF SAF-T-LOK WITH A SELL REC Feb 5 1998 10:32 mmendation NEW YORK, Feb. 5 /PRNewswire/ -- The following was issued today by Quantum Group, Ltd.: Saf-T-Lok (Nasdaq: LOCK) has enjoyed a recent appreciation of over 300 percent in the price of their shares. This Florida-based company is in the business of marketing a combination trigger lock for guns. Quantum believes the recent rise in the stock is due to the incentives that were give to a PR firm and a brokerage firm. If the shares of Saf-T-Lok trade above 3 dollars a share state street securities, marketing direct concepts and a business consulting firm receive over 2 million dollars. Quantum believes this incentive has caused aggressive marketing of the stock that has pushed the shares of Saf-T-Lok to unrealistically high levels. Sales The latest reporting quarter Saf-T-Lok reported sales of 5 thousand dollars and a $300,000 loss. Saf-T-Lok has a marketing plan similar to last year which leads Quantum to believe the sales of Saf-T-Lok will not be significant in the short term. Saf-T-Lok issued a recent press release sayin that they received an order totaling $550,000 from a newly formed company called United Safety Action Inc. based in Muncy, N.Y. From Quantum's understanding this is a newly formed company without a sales force whose principal has limited experience in the firearms industry. These facts caus Quantum to believe this sale may be an indication of interest and may not follow through. Quantum believes Saf-T-Lok will remain unprofitable for the foreseeable future as they have not demonstrated any ability to generate sal of these patented locks. Market Capitalization Saf-T-Lok currently has over 15 million fully diluted shares outstanding The current market capitalization is over 75 million dollars. Saf-T-Lok is an industry that Quantum believes would not command a high price earnings ratio even if the company ever was to be profitable. Gun manufacturers estimate this industry grows at a rate under 5% per year. To justify curren valuations, Quantum feels Saf-T-Lok would have to earn in excess of 8 million after tax dollars per year. Saf-T-Lok would have to capture a significant part of the market to accomplish this. Major gun manufacturers have come out with announcements that they are equipping new guns with products other than Saf-T-Loks. Quantum believes this current market capitalization will not be maintained. Insider Stock Sales Over the last year officers and directors have sold their shares in Saf-T-Lok at an alarming rate. Franklin Brooks, the inventor of Saf-T-Lok has sold over 280,000 shares. William Schmidt has sold 88,000 shares. John Gardner, the newly appointed president sold 200,000 shares. Eugene Horanoff sold 47,000 shares. Jeffrey Brooks recently sold 50,000 shares. These sales make Quantum question the confidence this management has in Saf-T-Lok. Conclusion Quantum believes the shares of Saf-T-Lok are currently trading at unsustainable levels. Recent speculation and aggressive marketing of the stock of Saf-T-Lok have driven the shares to an unrealistic price. This is a company that has generated nothing but losses and will continue to do so for the near future. Quantum believes the rise of these shares is a function of short term incentives and not because of company fundamentals. Quantum is setting a twelve month target of under 1 dollar a share. This report should not be considered a solicitation to generate new clients and is not intended for distribution. Quantum Trading is a New York-based trading firm and maintains a short position in Saf-T-Lok. SOURCE Quantum Group, Ltd. -0- 02/05/98 /CONTACT: Steven Ehlers of Quantum Group, 800-409-4445/