OPPORTUNITY:
SpaceTrak Corporation is in the business of integrating very accurate GPS satellite positioning system data with satellite based communications systems to provide highly specific “real-time” asset management information from its central control center to subscribers in remote and mobile locations worldwide through the Internet. The Company is seeking $6 million to launch initial production and market demos. Pro forma projections indicate revenues exceeding $2.2B for 2012 and $3.6B for 2016 with EBIT of 36% and 39%. Several exit strategies have been contemplated, including a merger, being acquired, or launching an IPO.
THE NEED:
The United States Congress passed an Act. H.R. 1 that requires scanning of all containers entering the U.S. SpaceTrak is positioned to provide the technology and hardware/software to implement this important Act.
H.R. 1, Implementing Recommendations of the 9/11 Commission Act, which requires 100 percent scanning of U.S.-bound containers by 2012:
“(1) In General.—A container that was loaded on a vessel in a foreign port shall not enter the United States (either directly or via a foreign port) unless the container was scanned by nonintrusive imaging equipment and radiation detection equipment at a foreign port before it was loaded on a vessel. (2) Application.—Paragraph (1) shall apply with respect to containers loaded on a vessel in a foreign country on or after the earlier of –(A) July 1, 2012; or (B) such other date as may be established by the Secretary under paragraph (3).”
TECHNOLOGY:
The Company’s proprietary iTRAK technology involves standard internet TCP/IP data transmission protocols and the methods in which SpaceTrak utilizes analog and digital data streams. Integration with “Smart Card” technologies has resulted in several possible patents pending involving this unique integration of advanced technologies. Wireless telecommunications services are provided by national and international low earth orbit (“LEO”) satellite service providers. Satellite positioning data is provided by the U.S. Government funded constellation of 24 earth-orbiting satellites with related land based control systems known as the global positioning system (the “GPS”).
BUSINESS STRATEGY:
SpaceTrak had focused initially on personal iTRAK applications, cargo containers and trailers as its market penetration strategy. The technology has applications across a broad array of markets and applications, too many to successfully address all at once. Priced on the order of $19-29 per unit per month iTrak had planned to dramatically outclass other asset tracking offerings from players like Qualcomm, @Track and TLC in price/performance while generating a highly profitable recurring revenue stream. With design and development of the hardware and software now complete SpaceTrak is ready to begin production and marketing to each of these markets, beginning in the U.S. and then to Europe and Asia. The company’s strategy was to penetrate the focus markets with a very low cost product and subsequently offer value-added services to include hardware, software and operations personnel on a price performance basis. This business model reduced the capital investment required by the end user and ensures the attainment of long-term contracts for the Company. POST 9/11 strategies have changed all of that with estimates that now US Government container security mandates suggest an extremely large and fast developing market segment that could dominate the business plan of the Company for many years to come.
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