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To: Galirayo who wrote (9791)	7/26/2005 6:39:11 PM
From: Sergio H	Respond to of 23958

Okay on MXIM. I was just wondering what specifically you were looking at. Interesting post on Yahoo board from what appears to be an Alanco insider in response to this press release: elmotech.com Thanks for the heads-up on Elmo Tech. You and others may be interested in the following: Elmo Tech has entered the U.S. market with a basic house arrest system that has been modified for low-tech prison uses. The Elmo Tech TRaCE system divides a prison into zones and is capable of telling staff how many people are located in a particular zone. As an example, assume a 500-bed prison is broken down into 10 zones with 50 people in each zone. If an officer or inmate is assaulted within a zone, the TRaCE system can provide a list of 50 inmate suspects. By contrast, the TSI PRISM system would identify the inmates who were in close proximity to the victim during the assault and, in addition, would identify each of these potential witnesses by name, and also provide important additional information about each witness. Over the past four years, TSI's marketing team has initiated every prison RFID RFP (request for proposal) in the US that we are aware of. In most instances, Elmo Tech has elected not to bid except however on those occasions a state has decided to use very weak RFP specifications. Prior to the Ohio Pre-Release project, TSI had beaten Elmo Tech in every head to head competition even though the Elmo Tech bids generally come in approximately 20% lower than TSI's pricing. The TSI system has significantly greater capabilities and, as a result, costs more to install. In the Ohio situation, the RFP specifications were weak on required features and the bid Elmo Tech submitted was nearly 60% lower than TSI's. The difference was nearly three times larger than the historical pricing delta between our competing bids. We believe that the Elmo Tech bid was substantially below its cost and may have been employed simply to ³buy² a project and, thereby, gain entrance into the market. In late 2003, Los Angeles County installed an Elmo Tech TRaCE system as a pilot in a small portion of the county jail. The jail administrators found the system to be ineffective and costly to maintain. As a result, this particular Elmo Tech system is scheduled to be replaced with a TSI PRISM system, and the TSI system will be designed to covering the entire East Complex of that jail. Since its inception, TSI has enjoyed first mover status in the prison RFID market. The company has always assumed its success would create competition. In preparation for that eventuality, Alanco has spent a great deal of time and money engineering and upgrading the TSI PRISM product and reducing its cost. Alanco expects increasing production volumes will continue to drive its costs substantially lower. Nonetheless a low tech less-expensive Elmo Tech-type solution may earn a place in the industry for various prison camp or minimum-security settings, where inmate violence is not nearly as severe. In the current tight budget climate we face in most states today, Alanco does not believe the low-end segment is going to attract significant funding for security upgrades. Therefore we shall continue to target the vast majority of U.S. prison facilities where inmate violence is indeed an important issue. Alanco does not view Elmo Tech's TRaCE system as a serious contender in this target market. The company is maintaining a close relationship with authorities in Ohio and anticipate the utilization of the TSI system installed at the Ross Correctional Facility will provide a clear comparison between our system and the installation provided by Elmo Tech. In the final analysis, it is entirely possible that Ohio authorities will reach the same conclusion as did Los Angeles County. We shall see.