As if Verizon Wireless, American Messaging, and SkyTel weren't doing enough for sales, Nighthawk Systems Inc. (OTCBB: NIHK) took a huge step forward from an operational standpoint today, announcing an alliance with American Traffic Solutions ("ATS").

Based in Scottsdale, Arizona - ATS is a leading domestic player in the high potential photo traffic safety and enforcement solutions market. Over the past few years, cities and states around the nation from Columbus-Ohio to Ventura-California have tested red light cameras with tremendous success.

Check out this report to get a better feel for what this market is all about:
http://www.stopredlightrunning.com/pdfs/Focus%20on%20Safety.complete.FINAL..pdf

For Nighthawk, Red Means Green

With photo enforcement solutions now proven to lead to safer driving habits, reduction in traffic crashes, hindrance of dangerous/aggressive driving - while saving lives and increasing police and public safety - widespread adoption is on the horizon and ATS is helping to lead the way in North America.

To give you an idea of the value-add here: According to the World Report on Road Traffic Injury Prevention issued in 2004 by the Worth Health Organization and the World Bank "the benefits of speed cameras outweigh their costs by a three-to-one margin, without taking fine revenue into account" In addition, although it is a bit dated, the following tidbit of information exemplifies perfectly the need for automated traffic control systems: in 2000, the cost of speeding related crashes in the U.S. was an estimated $40.4 billion, or $76,865 per minute.

With the majority of competition in the space coming from International counterparts (RedFlex Holdings and Gatsometer B.V. are two key players), ATS appears to be holding its own. The company is contracted to install and operate more than 850 red light and speed cameras across the country and more than 220 red light cameras in 19 Texas communities. Going forward, NIHK's customized PT10000 boards and firmware will be implemented into ATS traffic management equipment, which has been achieving stellar sales. This should provide a nice bump to revenues, likely during the fourth quarter of this year and beyond.

Multiple Products = Multiple Revenue Streams

Although most of the buzz lately has been generated by NIHK's CEO700 units gaining record traction within both the utility industry and in green applications, this most recent agreement involves the company's PT1000 board and firmware. In a world where there are simply too many violations and not enough police, ATS solutions, with the help of NIHK products, assist law enforcement in keeping the streets safe from mischievous motorists. Of course, we are thrilled to see NIHK targeting a continuously expanding pool of opportunity, through multiple partnerships, with multiple products.

With research indicating that there are more drivers on our roads than ever before and also that drivers, even those who admit to frequent speeding, think traffic enforcement is too lax (40% of a 2002 survey stated that there was too little enforcement of red light running and speeding), the need for automated enforcement solutions as a complement to traditional methods is paramount. In a testament to their effectiveness, a review of red light camera studies around the world concluded that cameras reduce red light violations by 40-50 percent and reduce injury crashes by 25-30 percent.

Nighthawk saw second quarter revenues improve 60% over Q1 and recently announced its largest sale ever. In addition, the company's PT1000 boards were just implemented in a statewide generator automation project with Verizon before being chosen by ATS. Needless to say, NIHK is now faced with the largest market opportunity in company history. Management's dedication to pursuing favorable business relationships that directly correlate with increased sales volume is taking NIHK to new heights. The only question is: when will the market at large wake up and smell the profits?