Greg McLeish of Leede Jones Gable has initiated coverage on Mission Ready Solutions, giving it a BUY with a Price Target of $0.40, a 150% upside from the current price. The company’s government contracting division, Unifire has built strong relationships with Department of Defense (DoD), Federal Emergency Management Agency (FEMA), Defense Logistics Agency (DLA), United States Army, Navy, Marines, and Air Force. With over 60 active solicitations representing an estimated potential of over $1 billion, the company remains confident in their ability to capture and monetize a portion of these opportunities.
Void in Personal Protective Technologies
Mission Ready Solutions’ management team notes that there is significant amount of “white space” for commercialization of personal protection technologies into the individual markets. Conflicts such as Covid-19, climate change, natural disaster, drought, famine, refugee crises and food security are accelerating the need for personal protective technologies. According to Grandview Research, the global personal protective equipment market size is expected to reach USD $112.07 billion by 2028, registering a CAGR of 7.3% over the forecast period. With Mission Ready Solutions being a industry leading manufacturer and distributor of over 1.5M products, they should benefit favorably from the focus on personal protective technologies – particularly due to their extensive knowledge and experience in providing turnkey solutions to the US government.
The company is also often tapped by the Department of Homeland Security Science and Technology to develop new technologies as demonstrated by the Ballistic Combat Shirt. This was also demonstrated by the renewable award of $199,260 for the development of energy harvesting fabric. Companies participating in the program are eligible for up to $800,000 in non-dilutive funding over four years to adapt commercial technologies for homeland security use cases.
“Protect the Force’s proposed technology could change how first responders are able to perform during emergencies.” “A wearable, portable power source could support safety equipment and communication tools; it has the potential to improve the work of first responders across the nation.”
Melissa Oh, SVIP Managing Director
Increase in US Defense Spending
Geopolitical threats such as China’s rise to power and Russia’s aggression have paved away for historical defense budgets. As on July 14th, the U.S House of Representatives passed a bill that will see the defense budget exceed $800 billion next year after the Senate Armed Services Committee already backed a $45 billion increase in its version of the bill. According to the Lowy Institute, United States military expenditure forecast is expected to hit $932B by 2030. Due to political tensions and political repercussions felt across the globe, Leede Jones Gable states that Mission Ready Solutions is positioned to profit from the increase in U.S. defense spending.
In addition to increases in the US Defense Budget, onshoring of PPE due to the bipartisan legislation of Make PPE In America Act will be beneficial to Mission Ready Solutions. The act calls for the production of personal protective equipment (PPE) to be made in the United States.
“The COVID-19 pandemic made it evident that the American people should not have to rely so heavily on foreign countries for personal protective equipment, and that’s why I’m pleased that our bipartisan Make PPE In America Act was signed into law as a part of the Infrastructure Investment & Jobs Act to bring PPE production back to our shores.“
Ranking Member of the Senate Homeland Security and Governmental Affairs Committee
Multiple Awards Schedules & Contracts
Over the past 12 months, Mission Ready Solutions has build a pipeline of over 60 solicitations that it awaits responses on. Government contracting delays across the industry have allowed the management team to focus on refining their strategic relationships, order fulfillment processes and company resources as it waits for the backlog to clear. One of the proposals the company awaits on is the Veteran Affairs GSA Schedule, a $14 billion opportunity with nearly 1700 in contracts. The schedule would be complimentary to the company’s existing portfolio of GSA schedules.
“While government contracting delays have been experienced across our industry, our team has utilized the time to respond to solicitations, develop and maintain strategic partnerships, and continue refining our order fulfillment processes“
Buck Marshall – Chief Executive Officer
The company has worked over the last few months on expanding its offering through strategic partnerships including QRCrypto, Task Force Antal, NuGen M.D. and Massif. In addition, as a prime vendor of DLA’s Clothing and Textile division, the company was awarded a contract for COTS – Shelter Systems, a $200M US contract value with 1 year base ordering period and 3 year option periods. This was a multiple award, prime vendor contract structured to accommodate the addition of products through the life of the contract.
Focus on Strengthening Financial Position
Since joining the company in 2020, the focus for Buck Marshall has been strengthening the financial position of the company. The former banker and President of the Small Business Administration division at Northwest Bank has used his financial expertise by strategically using cash and common shares to pay down debt. Earlier this year, the company announced that Product Source Group of New York agreed to accept 3.6 million shares of the company at a price of $0.35 in order to satisfy a $1.26M obligation, turning a creditor into a stakeholder. Following the shares for debt obligation, the company also sent payments in the amount of US$4 million, eradicating the remaining balance owed to PSG.
“This arrangement further strengthens our financial position by reducing our outstanding debt and, as a result, our monthly payment obligations. Additionally, the arrangement improves the company’s balance sheet ratios by correctly positioning a significant portion of our outstanding liabilities from short-term to long-term. Importantly, this arrangement serves to further align the interests of the partnership, the Company, and our shareholders as a result of PSG’s newly-acquired equity position in Mission Ready.”
Buck Marshall – Chief Executive Officer
According to Leede Jones Gable, they forecast Mission Ready Solutions to generate $145M in revenue for 2023. Their wide variety of proprietary products (such as the Flex9 armor) will generate meaningful revenue in 2023.
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