ScanTech AI Announces Initiative to Combat Contraband in Correctional Facilities Across the Americas

Rhea-AI Summary

ScanTech AI Systems (NASDAQ: STAI) has announced an agreement with the Virginia Department of Corrections (VADOC) to deploy its Fixed-Gantry Sentinel CT scanner, targeting the contraband detection market in correctional facilities. The initiative addresses a significant market opportunity, with the checkpoint scanning sector for over 6,000 U.S. correctional facilities estimated at $1.5 billion.

According to an October 2024 Urban Institute study, maximum-security prisons, male detainee facilities, and larger institutions face higher rates of contraband recoveries. VADOC and neighboring state agencies represent approximately 5% (300) of these facilities. The company's technology aims to enhance security operations by detecting illicit drugs, weapons, and unauthorized communication devices in correctional facilities across the Americas.

Positive

• Agreement secured with Virginia Department of Corrections for Sentinel CT scanner deployment
• Targeting $1.5 billion checkpoint scanning market opportunity across 6,000 U.S. correctional facilities
• Strategic positioning in an underserved market sector with significant growth potential

Negative

• None.

Insights

Security Technology Analyst

The VADOC contract marks ScanTech AI's strategic entry into the $1.5 billion correctional facility security market, representing a significant milestone in the company's expansion strategy. With approximately 6,000 correctional facilities nationwide and VADOC controlling roughly 5% of the market, this initial deployment could serve as a important reference case for broader market penetration.

The timing is particularly advantageous, as the October 2024 Urban Institute study has documented escalating contraband challenges in maximum-security facilities. This creates a compelling value proposition for ScanTech AI's Fixed-Gantry Sentinel CT scanner, which combines advanced CT imaging with AI-driven detection capabilities. The focus on mailroom screening addresses a critical vulnerability in facility security, potentially creating a sustainable revenue stream through both equipment sales and recurring software licensing.

The market dynamics suggest significant growth potential. Assuming an average implementation cost of $250,000 per facility (based on comparable security screening solutions), even capturing 10% of the total addressable market could generate substantial revenue. The AI-enhanced detection capabilities could provide a competitive edge over traditional scanning solutions, particularly in identifying sophisticated contraband concealment methods.

However, investors should note that market penetration in the corrections sector typically involves lengthy procurement cycles and extensive validation periods. Success with VADOC could accelerate adoption across other state systems, but the sales cycle in this sector often extends 12-18 months. The key catalyst will be demonstrable performance metrics from the VADOC implementation, which could drive accelerated adoption across neighboring state systems.

ScanTech AI is leading the charge in combating contraband in correctional facilities with cutting-edge artificial intelligence merged with advanced CT scanning technology

Atlanta, GA, Feb. 18, 2025 (GLOBE NEWSWIRE) -- ScanTech AI Systems Inc. (NASDAQ: STAI) (“ScanTech AI”) is tackling contraband in correctional facilities.  Today, ScanTech AI announced that it has reached an agreement with the Virginia Department of Corrections (“VADOC”) to deploy its innovative Fixed-Gantry Sentinel Computed Tomography (CT) scanner.  This project is part of ScanTech AI’s initiative to address the pervasive issue of contraband in correctional facilities throughout the Americas. More details on VADOC’s official announcement can be found here: https://vadoc.virginia.gov/news-press-releases/.

Contraband, including illicit drugs, weapons, and unauthorized communication devices, poses significant challenges to the safety and security of correctional institutions. An October 2024 study by the Urban Institute found that maximum-security prisons, male detainee facilities, and larger institutions experience higher rates of contraband recoveries, underscoring the need for advanced detection solutions.

The ongoing challenge of contraband entering correctional facilities, particularly through mailrooms, has fueled a growing demand for advanced detection and security systems. With over 6,000 correctional facilities—including state, federal, county, city, and juvenile detention centers—across the U.S., this sector of the checkpoint scanning market is estimated to have an approximate value approaching $1.5 billion. This estimate is derived from data provided by the Bureau of Justice Statistics on correctional facilities nationwide, combined with industry projections for security screening solutions in correctional settings. The Virginia Department of Corrections and its neighboring state agencies account for approximately 5%—or approximately 300—of these facilities. By leveraging its cutting-edge contraband detection technology, ScanTech AI Systems aims to enhance security operations and create safer correctional environments nationwide.

“The success of this program with VADOC will demonstrate the effectiveness of our technology in addressing the needs of this underserved sector of the checkpoint scanning market,” said Dolan Falconer, the Chief Executive Officer of ScanTech AI. “We are committed to partnering with correctional facilities across the Americas to implement solutions that enhance safety and security.”

By expanding the deployment of its Sentinel CT scanner, ScanTech AI aims to support correctional institutions in safeguarding their facilities and the individuals within them, addressing a significant challenge faced by departments of correction throughout the United States and beyond.

About ScanTech AI Systems Inc.

ScanTech AI Systems Inc. (NASDAQ: STAI) has developed one of the world’s most advanced non-intrusive ‘fixed-gantry’ CT screening technologies. Utilizing proprietary artificial intelligence and machine learning capabilities, ScanTech AI ’s state-of-the-art scanners accurately and quickly detect hazardous materials and contraband. Engineered to automatically locate, discriminate, and identify threat materials and items of interest, ScanTech AI’s solutions are designed for use in airports, seaports, borders, embassies, corporate headquarters, government and commercial buildings, factories, processing plants, and other facilities where security is a priority.

For more information, visit www. www.scantechais.com 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”), including statements regarding ScanTech AI’s management team’s expectations, hopes, beliefs, intentions, plans, prospects or strategies regarding the future, including possible business combinations, revenue growth and financial performance, product expansion and services. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Additionally, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek” or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release are based on the current expectations and beliefs made by the management of ScanTech AI, in light of their respective experience and their perception of historical trends, current conditions and expected future developments and their potential effect on ScanTech AI, as well as other factors they believe are appropriate under the circumstances. There can be no assurance that future developments affecting ScanTech AI will be those that it has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the parties) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including product and service acceptance, regulatory oversights, research and development success, and that ScanTech AI will have sufficient capital to operate as anticipated. Should one or more of these risks of uncertainties materialize, or should any of the assumptions of ScanTech AI prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Additional factors that could cause actual results to differ are discussed under the heading “Risk Factors” and in other sections of the filings of ScanTech AI (and its predecessor, Mars) with the SEC, and in the current and periodic reports filed or furnished by ScanTech AI (and its predecessor, Mars) from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on the information available to ScanTech AI as of the date hereof, and ScanTech AI assumes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as may otherwise be required under applicable securities laws.

Contact

ScanTech AI Systems Inc.
James White, CFO
jwhite@scantechibs.com 

Investor & Media Relations Contact

International Elite Capital Inc.
Annabelle Zhang
+1(646) 866-7928
annabelle@iecapitalusa.com 

FAQ

What is the market size for STAI's correctional facility scanning technology?

The checkpoint scanning market for correctional facilities is estimated at $1.5 billion, covering over 6,000 facilities across the U.S.

How many correctional facilities could STAI potentially serve through the VADOC agreement?

VADOC and neighboring state agencies represent approximately 300 facilities, or 5% of the total U.S. correctional facilities.

What types of contraband does STAI's Sentinel CT scanner detect?

The scanner is designed to detect illicit drugs, weapons, and unauthorized communication devices in correctional facilities.

Which correctional facilities show the highest rates of contraband according to the Urban Institute study?

According to the October 2024 study, maximum-security prisons, male detainee facilities, and larger institutions experience higher rates of contraband recoveries.