BOSTON, July 5, 2006 (PRIMEZONE) -- Technest Holdings, Inc. (OTCBB:TCNH), a defense and homeland security company, today issued the following letter to Markland Technologies' shareholders:
Dear Shareholders of Markland Technologies,
On June 29, 2006, Technest Holdings, Inc. filed an SEC registration statement on Form SB-2 to register 2,500,000 shares that will be distributed by Markland Technologies, Inc. as a stock dividend to Markland shareholders of record as of May 1, 2006. I want to welcome you to Technest Holdings, Inc., and tell you why your arrival as new shareholders could not have come at a better time.
Who we are: Our Company is an industry leader in the fields of defense force protection, remote sensing technologies, chemical detection and host of other emerging security technology applications. Our customers include the U.S. Department of Homeland Security, U.S. Department of Defense, and the National Institutes of Health, as well as U.S. Army, Navy, and Marine intelligence agencies. In May, for example, we received a further $7.7 million from the U.S. Army's Night Vision and Electronic Sensors Directorate (NVESD) for additional remote sensor technology products and engineering services.
Products and technologies: Our products and technologies are used for border surveillance and port security, training and training devices, and intelligence and special security. We also have a series of products, some in current use and some in late development stages, addressing the evolving commercial opportunities offered by the recently proposed Secure Border Initiative (SBI) of the Homeland Security Department.
We believe the market opportunities for growth are strong, and that we are well positioned to build on our achievements. I invite you to listen to a discussion of the Company's strengths on www.MeetTheCEO.com.
Strong revenue growth: We posted record revenue of over $55 million for the nine months ended March 31, 2006, and gross profits for the same period of nearly $10.3 million, or 19% of revenue. We also posted an operating loss of $1.1 million and a net loss for the period of $3.3 million. As I stated at that time, these results confirm our ongoing business strategy of creating a world-class integrated portfolio of sensing technology products, services and solutions to meet national security needs.
Technology platform and products: Over the past year, we have built a strong platform for future performance through our two wholly owned subsidiaries: 1) EOIR Technologies -- a leader in engineering support and prototyping for nearly 25 years, specializing in electro-optic sensor systems and, 2) Genex Technologies -- an advanced organization for three-dimensional imaging research and development.
Our core competencies in R&D, engineering services, systems integration and prototyping have enabled us to build a strong intellectual property (IP) portfolio. Currently, Technest has more than 25 patents and patent applications pending as well as five trademarks. By exploiting these key assets, we have developed a series of advanced security products for use by government agencies. For example:
-- Cerberus System -- a re-configurable multi-sensor, high-resolution
system designed for long-distance infrared and visible light detection
as well as motion detection, which also maintain seamless panoramic
coverage of 360 degrees, among other benefits.
-- AACES -- Automated, Adaptive Chemical Examination System -- not only
detects but also identifies chemicals at standoff ranges of several
kilometers and can do so passively, at a distance safe from danger to
the user. The system can also transmit data wirelessly to a PDA,
allowing the user to be at even greater standoff ranges.
-- WASS -- Wide Area Surveillance System -- is a multi-sensor targeting
system with real-time imaging, situational awareness displays and a
360-degree gimbal scan. Still in development, we believe this product
shows excellent potential for solving force protection, site monitoring
and border-security problems.
-- 3-D Camera Imaging System -- creates integral 3-D images with the
ability to incorporate identification and biographical information on
a real-time basis. One current application of this system is used to
store profiles in a database that can be instantly applied by law
enforcement agencies in the event a child is reported missing.
High-level security position: Approximately 56% of Technest's total workforce of approximately 200 employees has special top-secret clearance and 97% of all our employees have interim secret clearance at a minimum. This unique characteristic allows us to work very closely on highly sensitive initiatives with key government agencies, such as the U.S. Army's Night Vision and Electronic Sensors Directorate, the Marine Corps Systems Command, the Navy Sea Systems Command, the National Ground Intelligence Center, and more. In today's intense geopolitical climate, we believe other companies cannot replicate this capability because of increased difficulties in obtaining the wide range of security clearances needed.
Moving ahead: As we continue to grow our IP portfolio and maintain the stable cash flows from our core service business, we expect our future annual revenues to be driven primarily by strategic alliances for our new products.
Product pipeline: Currently, we have a pipeline of approximately 20 products that will follow the commercialization of our initial products, and we are actively pursuing accretive acquisition candidates in order to broaden our core capabilities. Our goal is to combine Technest's expertise in product development with companies specializing in product sales, distribution and technology licensing. By building a following for our products with broad-based applications, we endeavor to deliver above market returns for our shareholders.
High-growth potential: When the investment bank Rodman & Renshaw invited us to present at their Third Annual Security, Biodefense & Connectivity Conference on June 19, 2006 our unique business model drew investor attention for its steady contract based revenue and strong growth potential. Our funded backlog of more than $48 million ensures a steady flow of future cash flows as we execute the next phase of our growth strategy. We have established a leadership position in the high-growth security marketplace, and we are confident that our expertise in defense technologies will drive long-term shareholder value.
Corporate Governance: In keeping with our desire to become listed on a national exchange, we are committed to a strong corporate governance structure. We have already established a Board of Directors with a majority of independent directors. These independent directors also comprise our audit committee and compensation committee. We invite you to visit our website at www.technestholdings.com to learn more about the company and review our published code of ethics.
We welcome you aboard!
Sincerely, Dr. Joe Mackin President and Chief Executive Officer
Investors are cautioned that certain statements contained in this press release are "forward-looking"' statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, applicability, benefit and use of our product and possible future actions, which may be provided by management, are also forward-looking statements as defined by the Act. Some of the factors that could significantly impact the forward-looking statements in this press release include, but are not limited to: the functionality of our product; a rejection of the Company's products and technologies by the marketplace; and disputes as to the Company's intellectual property rights. Forward-looking statements are based upon current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about Technest Holdings, its products, economic and market factors and the industries in which Technest Holdings does business, among other things. These statements are not guarantees of future performance and Technest Holdings has no specific intention to update these statements. More detailed information about those factors is contained in Technest Holdings' filings with the Securities and Exchange Commission. http://www.sec.gov.