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Email von Traiman !!! Dear Mr. Home, Thank you very much for your letter and your patience. Despite the lack of news over the past several weeks, business activities continue at an exciting pace. In particular, the results of the company's 10-Q for Q3 2010 point to very encouraging figures for investors. I would like to draw your attention to Page F-2 of the SDSS Consolidated Balance Sheets as of September 30, 2010 (http://sec.gov/Archives/edgar/data/1391674/.../f10q0910_suspect.htm). Two of the line items in particular demonstrate that the company is moving forward. The company reported "Deferred Revenues of $169,742" and "Advances from Customers of $706,870". SDSS does not post earnings as revenues for contracted projects until they are completed. Due to the nature of security contracts, it could be considered a breach to release the details and locations of contracts before the system is fully implemented. It is for this reason that sales are not always reported in real-time. Reporting certain sales to the public could compromise the company's ability to record follow-up sales--a large component of SDSS's revenue building strategy. It is the SDSS model to slowly introduce Cogito units to specific markets, and then to increase the number of units toward the installation of a Central Data Storage System. The introduction of such systems takes unique customization, development and training to effectively implement the Cogito system. In addition, there is typically an ongoing consultation element of contracts. The advances and deferred revenues demonstrate that SDSS is heavily engaged in the market, participating in activities that will ultimately lead to numerous press releases. In addition, I would like to point your attention towards two important pieces of media (attached) that demonstrate the effectiveness of Cogito in the field. Law enforcement agencies are continuing to be impressed with Cogito's ability to quickly identify potential terrorists or criminals. But equally as important, is the ease in which the Cogito automated interrogation can be applied to a suspect. Unlike other technologies, law enforcement procedures, and interrogation methods, Cogito screenings can be implemented without a warrant or court order. This is one development that must not be overlooked. Law enforcement, can accurately determine whether a suspect has connection to a criminal incident or organization instantaneously, without wasting time and energy on bureaucratic procedures. This is one of Cogito's greatest advantages; an advantage that should increase demand significantly for Cogito technology. As for the introduction of a new CFO, investors will likely come to view the change favorably. The move is part of the company's long-term strategy to graduate from a small startup to a more established company poised to succeed on the stock market. Ran Daniel's resume as CFO (http://sec.gov/Archives/edgar/data/1391674/.../f8k120610_suspect.htm) is extensive. The company is confident that his appointment will bring the professionalism that investors require moving forward. Also, you should expect a letter to shareholders updating investors of several company developments in Q1 2011. I am hopeful that a regular schedule of news releases will follow, resulting in the boosting of share prices. Sincerely, Alex
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