Tag Archives: Doug Blakeway

Nanotech Security Corp. stock declining but Cantor Fitzgerald Canada analyst Ralph Garcea gives the stock a buy rating

Linda Rogers has written a Feb. 29, 2016 article about a Vancouver-based company rather perturbingly titled ‘What’s Propelling Nanotech Security Corp to Decline So Much?‘ for Small Cap Wired,

The stock of Nanotech Security Corp (CVE:NTS) is a huge mover today! The stock is down 3.23% or $0.04 after the news [Nanotech Security announced its first quarter fiscal 2016 results in a Feb. 29, 2016 news release], hitting $1.2 per share. … The move comes after 7 months negative chart setup for the $68.48M company. It was reported on Feb, 29 [2016] by Barchart.com. We have $1.06 PT which if reached, will make CVE:NTS worth $8.22 million less.

The Feb. 29, 2016 Nanotech Security news release (summary version) highlights the good news first,

  • Revenue of $1.5 million consistent with the same period last year.  Security Features contributed revenues of $569,000 largely from development contracts and Surveillance delivered $940,000.
  • Gross margin improved to 50% up from 34% in the same period last year.  The improvement reflects the increased mix of higher margin Security Features revenue.
  • Renewed a $1.0 million banknote security feature development contract. The Company successfully renewed the third and final phase of a banknote development contract with a top ten issuing authority to develop a unique Optically Variable Device (“OVD”) security feature for incorporation into future banknotes.  The final phase is expected to generate revenues of approximately $1.0 million.
  • Signed new $3.0 million KolourOptik banknote development contract. The Company signed a new three phase development contract to use the KolourOptik™ nanotechnology to develop a unique OVD security features with another G8 country for incorporation into future banknotes.
  • Strategic meetings with large international banknote issuing authority.  The Company continues to work with a large international banknote issuing authority to deliver a significant volume of colour shifting Optical Thin Film (“OTF”), and partner with our KolourOptik™ technology.  Management continues to devote a significant amount of time and resources in advancing these opportunities.
  • Signed a Memorandum of Understanding (“MOU”) with Hueck Folien, a European manufacturer to supply OTF to the banknote market.  The MOU contemplates an operational agreement to collaborate in the volume production of a colour shifting OTF security feature.  The OTF product is anticipated to initially be used in banknotes as threads and then expand into other markets in the future.

Doug Blakeway, Nanotech’s Chairman and CEO commented, “These two development contracts are material achievements.  Issuing authorities are paying us – something not common in the industry – to design unique banknote security features with our OTF and KolourOptik™ technologies.”  He further added, “Nanotech’s team has scaled the Hueck Folien production facility to where we believe together we can provide the initial volumes demanded by a top-ten issuing authority.  Our relationship with Hueck Folien continues to funnel security feature opportunities to Nanotech.”

The company’s sadder news can be found in their seven-page Feb. 29, 2016 news release (PDF). Their net earnings for the final quarter of 2015 and 2014 were both losses but in 2014 their loss was (931,271) and in 2015 it was (1,746,335). Still, the company’s gross profit from revenue for the same time periods was 50% in 2015 as opposed to 34% in 2014 despite slightly less revenue in 2015.

Assuming I’ve read this information correctly, Nanotech Security does seem to be in a fragile situation but that can change. After all, IBM was in serious trouble for a number of years during the 1990s when there was even talk the company might go bankrupt. As far as I’m aware, IBM is no longer in imminent danger of disappearing from the scene. *ETA March 9, 2016: It seems I used the wrong example if Robert X. Cringley’s March 9, 2016 article ‘What’s happening at IBM? (It’s dying)‘ for Beta News is to be believed.)* Getting back to my point, companies do go through cycles and it can be difficult to determine exactly what’s happening at some of the earlier stages.

Certainly, Cantor Fitzgerald Canada analyst Ralph Garcea has an optimistic view of Nanotech Security’s prospects according to a March 1, 2016 article by Nick Waddell for cantech letter,

Nanotech Security (TSXV:NTS) offers a better and more secure solution in multiple market segments that together are worth billions of dollars per year, says Cantor Fitzgerald Canada analyst Ralph Garcea.

This morning [March 1, 2016], Garcea initiated coverage of Nanotech with a “Buy” rating and a one-year price target of $2.50, implying a return of 110 per cent at the time of publication.

Garcea notes that Nanotech has already created solutions for the consumer electronics, brand identification and currency segments. He points out that one of the company’s biggest differentiators is that its solution can be embedded onto almost any material. This is important, he says, because it means that security can be embedded into places it previously could not go, such as directly onto a pharmaceutical pill.

Shares of Nanotech Security closed today [March 1, 2016] up 2.5 per cent to $1.22.

I have written about Nanotech Security frequently and believe the most recent is a Dec. 29, 2015 posting. For those unfamiliar with the company’s technology, it’s based on the structures found on the blue morpho butterfly. The holes in the butterfly’s wings lend it certain optical properties which the company mimics for its anti-counterfeiting technology.

One final comment, I am not endorsing the company or any of the analysis of the company’s financial situation and prospects.

Business in Vancouver discovers nanotechnology

There’ve been two articles in the Vancouver (Canada) newspaper, Business in Vancouver by Tyler Orton about a Simon Fraser University spin-off (start up) company, Nanotech Security. I first mentioned the not-yet-named company in a January 17, 2011 posting about proposed anti-counterfeiting measures based on the structures present on the Blue Morpho butterfly’s wings.

Orton’s Feb. 24, 2015 piece for Business in Vancouver provides an update on the company and on some of the business issues associated with a new technology and the strategy being used to introduce it,

Colour-shifting optical film has been the industry standard for banknote security since the 1990s. Depending on the angle of view, colours change on security features printed on bills in a way that the average person can recognize.

Because the nanotechnology has yet to be fully commercialized, the optical film side of the business is growing the most.

… increased demand for the optical film products prompted Nanotech to add a second shift at its Quebec cellulose facility, which was acquired – along with the legacy business – from North Vancouver’s Fortress Paper (TSX:FTP) in August.

Fortress Paper CEO Chad Wasilenkoff said when discussions began over the sale of Fortress Optical Features (FOF) he was immediately drawn to Nanotech’s butterfly technology.

“Getting a brand-new security feature that has not been used anywhere before … [banks] are just not willing to take a chance on new things in general when it comes to banknotes,” he told Business in Vancouver.

“It will take a little while to come to fruition, but we think putting these two entities [Nanotech and FOF] together will definitely fast-track that.”

Counterfeiting hit its most recent peak in 2004, when 470 fake notes per million were detected across the country, according to a 2011 Bank of Canada (BoC) study.

Wasilenkoff, whose company operates another banknote security firm in Switzerland, said he was happy with the return on investment after Fortress bought the BoC assets for  $750,000 and sold them to Nanotech three years later for $17.5 million.

“We were able to find a solution that was really synergistic for both companies,” he said, adding that Fortress will receive preferential treatment on new security features Nanotech develops.

LeRoux [Nanotech chief development officer Igi LeRoux] added that acquiring the legacy business was necessary if the nanotechnology was to be taken seriously in an industry that greets upstart companies with skepticism.

“[Now] We have an established network, we have an established market base, we have an existing product and – most importantly – we have an existing reputation in the industry.”

Orton’s Aug. 28, 2015 piece for Business in Vancouver builds on his Feb. work (Note: Links have been removed),

Banknotes implanted with nanotechnology, bills printed with pinhead-sized images at maximum resolution or even coins that can store of data.

… it’s not the kind of out-there concepts that only exists in the mind of the CEO of Nanotech Security [Doug Blakeway].

The Burnaby-based banknote security firm has been working non-stop to get these anti-counterfeiting measures onto the streets as quickly as possible and is preparing to ramp up production and sales of its technology after securing $2.6 million in its latest round of fundraising that closed Wednesday (August 26 [2015]).

Blakeway said the plan is to converge the nanotechnology and the optical film technology soon. It’s a measure he said is necessary to introduce the nanotechnology to issuing authorities that may be skeptical about the new product.

It probably won’t be until November before Nanotech discloses which countries are using its technology. Issuing authorities, Blakeway said, are reluctant to reveal exactly what measures they’re taking to fight counterfeiting.

“You can talk about the top 10 issuing authorities or the G8 issuing authorities,” he said.

But Nanotech isn’t stopping only at imprinting bills with the microscopic holes.

Mints began asking last year if it could transfer its technology onto coins in a stamping operation without any extra cost, save for the dye they use.

Moving forward, the coins will be able to store data through an image that’s carried through light waves.

I trust someone will notify the US government about this proposed nanotechnology-enabled coinage. There have been concerns about Canadian coinage in the past as noted in a May 7, 2007 article in thestar.com by Ted Bridis (Associated Press),

An odd-looking Canadian coin with a bright red flower was the culprit behind the U.S. Defence Department’s false espionage warning earlier this year, the Associated Press has learned.

The odd-looking – but harmless – “poppy coin” was so unfamiliar to suspicious U.S. Army contractors travelling in Canada that they filed confidential espionage accounts about them. The worried contractors described the coins as “anomalous” and “filled with something man-made that looked like nano-technology,” according to once-classified U.S. government reports and e-mails obtained by the AP.

The silver-coloured 25-cent piece features the red image of a poppy – Canada’s flower of remembrance – inlaid over a maple leaf. The unorthodox quarter is identical to the coins pictured and described as suspicious in the contractors’ accounts.

The supposed nano-technology actually was a conventional protective coating the Royal Canadian Mint applied to prevent the poppy’s red color from rubbing off. The mint produced nearly 30 million such quarters in 2004 commemorating Canada’s 117,000 war dead.

“It did not appear to be electronic (analog) in nature or have a power source,” wrote one U.S. contractor, who discovered the coin in the cup holder of a rental car. “Under high power microscope, it appeared to be complex consisting of several layers of clear, but different material, with a wire like mesh suspended on top.”

The confidential accounts led to a sensational warning from the Defence Security Service, an agency of the Defence Department, that mysterious coins with radio frequency transmitters were found planted on U.S. contractors with classified security clearances on at least three separate occasions between October 2005 and January 2006 as the contractors travelled through Canada.

It seems those army contractors were prescient about nanotechnology-enabled coins. As for the potential to use these coins for spying, I leave that speculation to those who know more about the technology.

Canadian nanotechnology commercialization efforts: patents and a new facility

Nanotech Security, a Vancouver-area business focused on anti-counterfeiting strategies which has been featured here a number of times, has secured two patents according to a May 30, 2015 news item on Nanotechnology Now,

Nanotech Security Corp. (TSXV: NTS) (OTCQX: NTSFF), announced that the Company has been granted two patents; one from the United States Patent and Trademark Office and one from the European Patent Office. The Company continues to expand the protection of its technology with the addition of these patents to its intellectual property portfolio.

Clint Landrock, Nanotech Chief Technology officer, commented, “We are pleased to be granted these additional patents as they further solidify our hold on the next generation of authentication technologies for the banknote, branding and secure document industries.”

Notech Security’s May 27, 2015 news release, which originated the news item, provides more details about the technology being patented,

Based on these patents the Company has launched “Pearl”, our first foray in plasmonic full colour images.  A nano array image of Vermeer’s famous painting “Girl with a Pearl Earring”, which brilliantly displays her ruby lips, blue scarf and bright white collar and features two distinct authentication viewing modes in one feature.  The user can view the full colour image in both transmission and reflection (shining a light on or through the image) – an effect impossible for a hologram to achieve.  …

Here’s Pearl,

NanotechSecurityPeral

Courtesy Nanotech Security

The news release goes on,

Doug Blakeway, Nanotech Chief Executive Officer, commented, “An initial showing of Pearl to the banknote industry came back with comments of having never seen such a bright visual effect in a security device.”  Immediate interest in Pearl has initiated discussions with issuing authorities.

EPO No. 2,563,602 names Charles MacPherson as the inventor.  The patent covers layered optically variable devices (“OVDs”) such as colour shift foils that uniquely employs additional interactivity using piezoelectric layers to activate the authentication mode of a security device used as threads in products such as banknotes, passports and secure packaging.  This patented multi-layered thin film technology offers Nanotech a competitive edge in the development of colour shifting security devices.

USPTO No. 9,013,272 names Dr. Bozena Kaminska and Clint Landrock as co-inventors.  Building on patents previously granted to Nanotech, this patent secures integral intellectual property, which covers a range of diffractive and plasmonic luminescent devices such as security features used in banknotes.

Nano facility in Alberta

Presumably this Canadian federal government announcement about funding for a nanotechnology facility at the Northern Alberta Institute of Technology (NAIT) is in anticipation of a Fall 2015 election (from a May 31, 2015 news item on Nanotechnology Now,

Today [Friday, May 29, 2015], the Honourable Michelle Rempel, Minister of State for Western Economic Diversification, announced $1.5 million in funding to support the Northern Alberta Institute of Technology (NAIT) in establishing a centre that will allow small- and medium-sized enterprises (SMEs) to test, develop, and commercialize micro- and nano-coated products.

A May 29, 2015 Western Economic Diversification Canada news release on MarketWired expands on the theme,

Federal funding will enable NAIT to purchase specialized coating handling and blasting equipment, a spray booth, cutting machines, compressors, and to upgrade the facility’s ventilation system and power supply.

The facility, which is also receiving support from MesoCoat Technology Canada, will operate within the existing Nanotechnology Centre for Applied Research, Industry Training and Services (nanoCARTS), and is expected to benefit a wide range of sectors including oil and gas, surface technology and engineering.

Quick Facts

  • Since 2006, the federal government has invested more than $13 billion in new funding in all facets of the innovation ecosystem including advanced research, research infrastructure, talent development, and business innovation.
  • NAIT’s nanoCARTS provides industry with prototyping, product enhancement, testing and characterization services related to nano and micro technology. The new facility will help to expand nanoCARTS’ range of services available to SMEs.
  • NAIT has the expertise in rapid prototyping, materials testing, manufacturing, training and mechanical design to help companies develop and commercialize new products.

Quotes

“Our Government understands that technology advancements help increase Western Canada’s competitive advantage. By investing in the establishment of this new micro- and nano-coated product development centre, we are demonstrating our commitment to supporting jobs and economic growth.”

  • The Honourable Michelle Rempel, Minister of State for Western Economic Diversification

“Applied research is essential in NAIT’s role as a leading polytechnic. This investment strengthens our ability to work with industry to solve their real-world problems. This ultimately helps them to be competitive and innovative. I would like to thank the Government of Canada for its investment.”

  • Dr. Glenn Feltham, President and CEO, NAIT

“We are grateful to the Government of Canada for their financial and strategic support, which has been instrumental in establishing this centre at NAIT. The applied research we are carrying out has the potential to extend the lifespan of piping used in oil production and save billions of dollars in downtime and replacement costs. Wear-resistant clad pipes being developed at this centre are expected to make oil production safer, more efficient and more affordable.”

  • Stephen Goss, CEO, MesoCoat Technology Canada

That would seem to be the sum total of the Canadian commercialization effort at the moment. It contrasts somewhat with the US White House and its recently announced new initiatives to commercialize nanotechnology (see my May 27, 2015 post for a list).

Canadian company, Nanotech Security Corp. hopes to purchase Fortress Optical Features

Nanotech Security Corp. started life as a spin-off company from Simon Fraser University in Vancouver, Canada. A  Jan. 17, 2011 posting and a followup Sept. 29, 2011 posting will probably give you more information about the technology and the company’s beginnings than you every thought you’d want.

For those interested in the company’s current expectations, an Aug. 27, 2014 news item on Nanotechnology Now describes Nanotech Security Corp.’s plan to purchase another business (also Canadian with the parent company [which is not being purchased] headquartered in North Vancouver},

Nanotech Security Corp. (TSXV:NTS) (OTCQX:NTSFF) (“Nanotech” or “the Company”) today announces an agreement with Fortress Global Securities Sarl, a subsidiary of TSX listed Fortress Paper Ltd. (“Fortress Paper”), to purchase 100% of Fortress Optical Features Ltd. (“Fortress Optical Features”), a producer of optical thin film (“OTF”) used as security threads in banknotes in several countries. The definitive share and loan purchase agreement (the “Purchase Agreement”) provides for Nanotech to acquire 100% of the issued and outstanding securities of Fortress Optical Features for consideration of up to $17.5 million, of which 3 million Nanotech shares (up to $4.5 million) is contingent on the future operating performance of Fortress Optical Features. Nanotech has also entered into an agreement with Canaccord Genuity Corp. (“Canaccord Genuity”) to act as sole lead manager and book-runner, and including Craig-Hallum Capital Group, in respect of a private placement of subscription receipts of the Company convertible into Nanotech common shares (“Shares”) and Share purchase warrants (“Warrants”) in a targeted range of $9.0 million to $16.0 million as more fully described below. To date, subscription agreements in excess of $8.0 million have been received which is an amount sufficient to pay the cash portion of the acquisition under the Purchase Agreement. All monetary amounts are in Canadian dollars.

An Aug. 26, 2014 Nanotech Security Corp. news release, which originated the news item, provides additional details,

The acquisition of Fortress Optical Features will serve as a platform to accelerate commercialization of Nanotech’s KolourOptik technology by integrating it into Fortress Optical Features’ product line as an addition of KolourOptik images to the OTF threads.

Nanotech will acquire Fortress Optical Features’ state-of-the-art building and vacuum metal deposition equipment, located near Ottawa.

The transaction combines complementary businesses that can leverage established banknote customer relationships to accelerate market entry and leapfrog competitive technologies. To date, Fortress Optical Features’ technology has been utilized by 11 international currencies.

Fortress Optical Features’ CEO Igi LeRoux, and COO, Ron Ridley, will be integrated into the Company’s senior management.

Fortress has the right to appoint one director to the Nanotech board and Nanotech will appoint a director to a Fortress affiliate concerned with security paper production.
Cash portion of the purchase price to be funded by a subscription receipts offering at $1.50, each convertible into a Share and one-half Warrant as fully described below.
Concurrent financing and acquisition closings are scheduled for September 10, 2014.

“We believe this will be a transformational transaction for Nanotech”, stated Doug Blakeway, President and CEO of Nanotech. “By layering our KolourOptik nanotechnology onto Fortress Optical Features’ security threads which are currently used in numerous currencies, we will create a next-generation product for the banknote industry”.

Mr. Blakeway added, “Additionally, the transaction will expand Nanotech’s current IP portfolio for optical security features to include Fortress Optical Features’ 14 current patent applications which should enhance our ability to compete in other commercial spaces such as passports as well as product branding and authentication”.

Fortress Optical Features’ core business is optical thin film material used in security threads incorporated in banknotes in several countries. Originally developed by the Bank of Canada, and subsequently sold to Fortress Optical Features in 2011, this technology was deployed on Canadian banknotes from 1989 until 2011 as well as ten other international currencies. In the twelve month period ending December 31, 2013 Fortress Optical Features generated approximately $2.3 million in revenue and its existing plant could service production of about eight times the level of production which generated this revenue.

Fortress Optical Features recently invested $4.2 million to renovate its existing production facility and added $1.0 million in new equipment over the past few years. As part of the transaction, Nanotech will acquire Fortress Optical Features’ state-of-the-art production facility and high technology OTF production equipment. Fortress Optical Features is currently pursuing business in some of the world’s largest countries and sees potential new opportunities internationally. According to Secura Monde International, the top five banknote producing economies include China, India, the European Union, the United States and Indonesia.

TRANSACTION DETAILS AND CLOSING CONDITIONS

Under the terms of the Purchase Agreement, Nanotech will pay up to $17.5 million to be satisfied by a combination of $7 million cash, 5 million common shares of Nanotech and a secured vendor take-back note of $3 million with an interest rate of 4% per annum. Of this consideration 2 million shares will have a four month hold period from closing and 3 million shares will be escrowed and shall be released based on certain specific performance milestones based on sales of product to new customers over up to 5 years. Shares may be released early in the event of a sale of the business or change of control of Nanotech. Contingent shares not released after 5 years will be cancelled. Details of the share release formula will be found in the Purchase Agreement to be filed at www.sedar.com.

All Shares have a deemed value of $1.50 and the acquisition and financing transactions do not constitute a change of business nor a change of control for Nanotech but will be treated under TSX Venture Exchange policies as a fundamental acquisition.

Completion of the transaction will be subject to customary closing conditions, including receipt of all regulatory approvals of the TSXV as well as the listing of the common shares issuable in connection with the transaction, including those underlying the subscription receipts. If Nanotech elects to terminate the acquisition in reliance on an allowable condition, a $600,000 break fee payable in Shares is due to Fortress Paper. Nanotech and Fortress Optical Features anticipate the transaction and financing will close on or about September 10, 2014.

RELATED AGREEMENT DETAILS

As part of Nanotech’s acquisition of Fortress Optical Features, the parties and/or their affiliates have entered into certain ancillary agreements. These include a supply agreement under which Fortress Optical Features will continue to supply OTF security threads to Fortress Paper’s Swiss-based Landqart specialty paper division. Landqart will enjoy favoured customer status subject to certain minimum purchase obligations. Under a lease and related shared services agreement, a Fortress Paper affiliate will lease approximately 2/3 of the 100,000 sq ft building being acquired as part of Fortress Optical Features assets and the parties will share the costs of steam production, electrical power, security, and administration services. The $3 million note is fully secured against Fortress Optical Features shares and assets.

SUBSCRIPTION RECEIPT OFFERING

Nanotech has entered into an agreement with Canaccord Genuity, acting as sole lead manager and sole bookrunner, and including Craig-Hallum Capital Group, to sell on a best-efforts marketed private placement basis, up to approximately 10,667,000 subscription receipts of the Company (the “Subscription Receipts”) at a price of $1.50 per Subscription Receipt (the “Subscription Price”), for gross proceeds to Nanotech of up to $16.0 million.

The Subscription Receipts will automatically convert, without additional payment, into one common share and one-half of a common share purchase warrant of the Company for each Subscription Receipt upon completion of the transaction. Subject to certain conditions, each whole purchase warrant will entitle the holder to purchase one common share of Nanotech at a price of $1.90 for a period of one year from issuance. The warrants are subject to accelerated expiry in the event that the common shares of Nanotech trade on the TSX Venture Exchange at $2.25 or more for a ten consecutive day period after the four month resale restricted period applicable to the Shares in Canada expires. Completion of the Subscription Receipt offering is subject to certain conditions, including receipt of the approval of the TSXV and all other necessary regulatory approvals.

Net proceeds from the Subscription Receipt offering will be used by the Company to partially fund the purchase price payable for Fortress Optical Features and for general corporate purposes.

The Subscription Price represents a discount of approximately 6% to the closing price of $1.60 per common share of Nanotech on the TSXV on August 25, 2014 and a discount of approximately 7% over the 30-trading day volume-weighted average price of $ 1.61 per common share of Nanotech on the TSXV, up to and including August 25, 2014.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

####

About Nanotech Security Corp.

Nanotech has been a leading innovator in the design and commercialization of advanced security products using nano-optical devices. Nanotech’s KolourOptik™ and Plasmogram™ optically variable devices (“OVD”s) are nanotechnology based product platforms originally inspired by the unique optical properties of the iridescent wings of the Blue Morpho butterfly. Nanotech OVD images produce intense, high definition images that are ideal for brand authentication and for distinguishing currency, documents, personal identification, consumer electronics, etc. from fakes. Nanotech’s KolourOptik OVD platform creates unique, easy to authenticate images through interaction of light with nano-sized (billionth of a meter) arrays of surface indentation structures imbedded through algorithms and electron beams into various substrates. These nanostructures create vivid colour images, activated by a simple tilt or rotation, and achieve higher resolutions than the best LED-displays currently available, as well as having optical properties not achievable with holograms.

Additional information about Nanotech and its technologies can be found on its website www.nanosecurity.ca or the Canadian disclosure filings website www.sedar.com or the OTCMarkets disclosure filings website www.otcmarkets.com

ABOUT FORTRESS OPTICAL FEATURES

Fortress Optical Features produces optically variable thin film security material for the security threads contained in certain previous Canadian banknotes and various other international currency denominations. The film is a unique combination of layered or ‘stacked’ thin film materials to produce a predictable colour replay. Additional features of the film include differing optical features or colors which appear when the banknote is tilted. The material was developed by the Bank of Canada in coordination with the National Research Council of Canada in the early 1980s and was first used as a patch on Bank of Canada $20, $50, $100 and $1,000 denominations of Birds of Canada series issued from 1988-1993 and also used on all Canadian Journey denominations issued from 2004 –2011. Fortress Optical Features’ high security products are marketed to security paper manufacturers throughout the world.

Additional information about Fortress Optical Features and its technologies can be found on its website www.fortresspaper.com/company/optical-security-features

This News Release contains forward-looking statements about the proposed acquisition by Nanotech of all of the issued and outstanding securities of Fortress Optical Features and the related offering of Subscription Receipts. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”, “intends”, “estimates”, “predicts”, “potential”, “targeted” “plans”, “possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could” or “should” occur or be achieved.

These forward-looking statements include, without limitation, statements about our market opportunities, strategies, competition, and the Company’s views that its nano-optical technology will continue to show promise for mass production and commercial application. The principal risks related to these forward-looking statements are that the Company’s intellectual property claims will not prove sufficiently broad or enforceable to provide the necessary commercial protection and to attract the necessary capital and/or that the Company’s products will not be able to displace entrenched hologram, metalized strip tagging, and other conventional anti-counterfeiting technologies sufficiently to allow for profitability.

There can be no assurance that the transaction will occur or that the anticipated strategic benefits and operational synergies will be realized. The transaction is subject to the successful closing of the Subscription Receipt offering and to various regulatory approvals, including approvals by the TSXV, and the fulfilment of certain conditions, and there can be no assurance that any such approvals will be obtained and/or any such conditions will be met. The transaction and the Subscription Receipt offering could be modified, restructured or terminated.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Nanotech’s expectations only as of the date of this News Release. Nanotech disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This News Release is not an offer to sell or the solicitation of an offer to buy any securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described in this News Release have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States absent registration or an applicable exemption from the registration requirements of such laws.

This News Release is not an offer to sell or the solicitation of an offer to buy any securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described in this News Release have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States absent registration or an applicable exemption from the registration requirements of such laws.

So there you have it. No one is responsible for anything but they hope for the best.

A patent for Nanotech Security Corp

The Nov. 5, 2012 news item on Nanowerk is a bit confusing (to me, a neophyte) in regard to which enterprise actually holds the patent,

The patent (USA Patent No. 8,253,536B2) names the Company’s Director and Chief Scientific Officer, Dr. Bozena Kaminska and its Chief Technology Officer, Clint Landrock as co-inventors. The patent covers a number of core aspects of Nanotech’s technology including claims for the use of optically efficient nano-hole arrays as security features. The patent also claims the use of nano-scale structures that are smaller than a wavelength of light in conjunction with printable electronic components such as electronic displays, batteries and solar cells. Originally filed in early 2009, the patent has been assigned to Simon Fraser University where it is exclusively sub-licensed to Nanotech pending its transfer to a Nanotech affiliate upon completion of its Advance Royalty obligations schedule to complete next year.

If I understand this rightly, Nanotech Security Corporation which is licencing the patent from Simon Fraser University (SFU) will be passing the licence on to a spinoff or affiliate company in 2013 while the parent corporation continues to develop other technologies for commercialization. SFU not Nanotech Security Corporation nor any proposed affiliate holds the patent rights.

In the company’s November 5, 2012  news release (which orignated the news item), they refer to USA Patent No. 8,253,536B2 as a parent-patent and here is what SFU and/or Nanotech Security Corporation claimed in this patent,

The patent encompasses the structure, design and manufacturing process for NTS’s security technology, NOtES®, which deploys a controlled array of extremely tiny holes that can be quickly imprinted in large numbers directly onto virtually any surface, creating a vibrant, crisp, ultra high definition image. This highly sophisticated authentication feature replicates nano-scale (billionth of a meter) light-reflective structures similar to those found in nature, for example on the iridescent wings of certain butterflies.

Mr. Blakeway [Doug Blakeway, CEO and Chairman] added, “This parent patent is at the foundation for not only further uses and new designs in the security and authentication space, but branches out to many other applications involving nano-optics with extremely high optical efficiency – including solar cell technologies. [emphases mine] We believe that nano-optic technology is in its infancy, and has huge potential for growth.”

I wonder what SFU and Nanotech Security Corporation are planning to do with their new patent. I hope it won’t be used in an attempt to kill competition. There’s at least one other Canadian company  (Opalux mentioned in my Jan. 31, 2011 posting) which works with optically efficient nano-hole arrays and at least one team in the UK (mentioned in my May 20, 2011 posting) also working in this area.

As for my concern, it’s widely acknowledged internationally that the patent systems are causing problems as per a sample of my previous postings on patents, copyright, and/or intellectual property,

UN’s International Telecommunications Union holds patent summit in Geneva on Oct. 10, 2012

Billions lost to patent trolls; US White House asks for comments on intellectual property (IP) enforcement; and more on IP

Patents as weapons and obstacles

I’m not arguing against the underlying intent for patents and copyright. The laws were designed to stimulate invention and innovation by insuring that the creators were compensated for their efforts.  Sadly, that intent has been lost and today we have situations where research and creativity are stifled due to ‘copyright and patent thickets’.

NanoTech Security Corp’s new shim and a few oddities about the company

The Sept. 29, 2011 news item on Nanowerk announces,

Nanotech Security Corp. has reached a major milestone in authentication and anti-counterfeiting security technology developed by replicating nano-scale structures similar to those found on the wings of the iridescent Morpho Butterfly.

Nanotech Security Corp. is pleased to announce its team of researchers have successfully created the world’s first master shim http://www.nanosecurity.ca/press_imagesvideos.php [Note: I was not able to access this site when I tried Sept. 29, 2011, 3:14 pm PST.], or master die, that manufacturers can use to reproduce nano-holes in a variety of materials – including banknotes – in large volumes quickly and cost-effectively without changing the manufacturing process.

Nanotech brings the next generation of authentication technology

“Proving that our technology can be re-created successfully with the use of a master shim was a crucial step in making it available for commercial use to our potential partners,” said Doug Blakeway, CEO and chairman of Nanotech Security Corp.

“This milestone makes our technology accessible and affordable to banknote manufacturers, while allowing them to maintain the highest level of security they require.”

I posted about NanoTech Security Corp earlier this year (January 17, 2011) when the research team who are affiliated with Simon Fraser University (SFU) were in the process of publicizing their work. This is exciting news and I hope do they well. At the same time, I am somewhat puzzled as there are a number of inconsistencies starting with the company’s age.

From the Nanotech Security Corp home page,

NANOTECH Security Corp. has a 20 year history
designing and selling security devices. Devices include
security threads for bank notes and high value documents, communication surveillance and intelligence gathering equipment for the International Defense and Law Enforcement markets.

The news item on Nanowerk states this,

With a rich history in law enforcement and security applications, Nanotech Security Corporation has embarked on a new venture bringing world class nanotechnology from Simon Fraser University to the authentication and anti-counterfeiting market.

Founded in 1985, Nanotech Security has evolved substantially, successfully implementing devices and technology in areas of criminal justice, infrared night-viewing, tracking security and forensics.

The company would be 26 years old if it were founded in 1985. The more digging I do the more confusing it gets. According to the information about NanoTech Security (NTS) Corp listed on the Toronto Stock Exhange’s Infoventure page, the company was incorporated in May 1984 (which would make it 27 years old). [ETA Oct. 3, 2011: It’s highly unlikely the company was called NanoTech Security Corp in 1984 or 1981. Was it called something else? There is no company history on the website to clarify.] NTS has two other companies as subsidiaries (?), Strategic Technologies (address and phone no. identical to NanoTech Security Corp’s listing on its website) and Tactical Technologies in Pennsylvania. [ETA Oct. 3, 2011: Tactical Technologies was formed in 1994]

The NTS website lists Tactical Technologies in its Products category (another oddity),

Tactical Technologies Inc., is a wholly owned subsidiary of NanoTech Security Corp.
Tactical is engaged in the design, manufacture and supply of sophisticated communications, surveillance, intelligence gathering and forensic equipment for the Law Enforcement and Defense Industries. Tactical works closely with its customer base and has pioneered many unique products and system solutions which surpass the needs of top security, investigative, enforcement, defense and offender detention professionals. Tactical’s core products consist of covert body worn audio transmitters, repeaters, and intelligence kits which include receivers and recording capabilities.  Recently one these products, the Citation V, was featured last March in an episode of CSI: Miami. Other products include custom built surveillance vehicles, mobile/portable surveillance platforms; Cellular/IP based video surveillance systems, agent alert alarm transmitters, and other video surveillance systems. Tactical’s operations are located in Holmes, Pennsylvania; about five miles west of Philadelphia.

www.tti-narctech.com

There’s actually more information about Tactical Technologies’ products on the NSI website than there is on its own company website,

Under the laws of the United States of America,
the dissemination of product information for goods
manufactured by Tactical Technologies Inc. is restricted.

I did finally find the NTS management team page (which includes the two SFU scientists [Bozena Kaminska and Clint Landrock] whose work provides the platform for this company’s products) on the NTS website  in the Press Room area [Note Oct. 3, 2011: Stylistic and grammatical changes made]. The description for Doug Blakeway, Chief Executive Officer and Chairman, provides this information,

Mr. Blakeway is Chairman and CEO of Nanotech Security Corp. (formerly Wireless2 Technologies Inc.), a publicly traded international high level public security corporation which he founded in 1985 and Managing Director for G4S Justice Services (Canada) Inc. [emphases mine] Mr. Blakeway has extensive connections in the security and policing sectors. As an entrepreneur and investor, over the past 40 years, he has founded and operated a number of successful endeavors from service oriented companies to high technology electronic manufacturing. Mr. Blakeway is a proven inventor with a variety of diverse patents for such things as a rotary engine; a portable diamond drill feed, a fluid management system, GPS asset and personnel tracking systems and an infrared night viewing system. As a helicopter pilot, his vision and tenacity resulted in the founding of WM Aviation Inc. – the parent company of Helijet Airways, the first regional helicopter service in B.C. He is presently an entrepreneur in Residence at Simon Fraser University, Venture Connection. He mentors companies and individuals and is a member of the BC Angle Form and an investor in early stage companies. Since 1982, Mr. Blakeway has been a director of a number of public companies on the TSX & Venture Exchange. He is currently a member of the board of directors of Nanotech Security Corp., IDIT Technologies Corp., IDME Development Corp., Legend Power Systems Inc, Tactical Technologies Inc, Wireless Industry Partnership Connector Inc. (WIP), and RFind Systems, Inc. Mr. Blakeway serves on audit, compensation and corporate governance committees and with his knowledge of the policies and procedures for listing Capital Pool Companies (CPC’s) has facilitated the successful qualification of a CPC to a Tier 2 issuer on the TSX Venture Exchange. Mr. Blakeway is a past member of member of British Columbia Securities Policy Advisory Committee (SPAC), and member of Simon Fraser University Surrey – Business Advisory Council, Canadian Listed Company Association, The Digital Media and Wireless Association of BC (DigiBC), Wavefront Wireless Innovation Society of BC and The Executive Committee (TEC), an international organization for CEOs.

The reference to Wireless2 Technologies could explain [Note Oct. 3, 2011: This was originally worded as “certainly explains”] why the company can claim a history of 20 years or more and I expect  they are using the association with Tactical Technologies as reason to claim experience in security, surveillance, etc. I was not able to find much information about Wireless2 Technologies.

As well, I’m not clear as to the relationship that Strategic Technologies has with anything and I can’t find much information about it either. Further, I was not able to find mention of Mr. Blakeway on the G4S (Canada) website. Here’s the company history,

G4S Secure Solutions (Canada) Ltd. was founded in October 1966 by retired members of the Royal Canadian Mounted Police as Canadian Protection Services (CPS).

A recently expanded service offering, which includes all critical areas of the security industry, our Secure Solutions team has nearly 8,000 employees across the country.  We operate in many different markets from Government to Private Energy & Utilities, Condominiums & Residential to Transport & Logistics, Major Corporations to Financial Institutions, Petrochemical to Natural Resources, and Healthcare to Retail & Loss Prevention.

In early 2000, G4S Cash Solutions (Canada) Ltd. entered the Canadian market as Securicor, with the purchase of a number of cash services providers. Through these acquisitions, G4S Cash Solutions gained over 71 years of experience of the Canadian cash services market.

In 2005, expansion continued with the acquisition of Ontario’s largest regional service provider, a move that further ingrained the business in the nation’s largest market. With over 2,500 employees and 55 branches across the country, G4S Cash Solutions continues to operate the largest, market leading coast-to-coast service network in Canada.

As a result of the 2004 merger between Group 4 Falck A/S and Securicor plc, two Canadian security service divisions were united in Canada under a global brand.

With over 10,000 employees across the nation, G4S brings a wealth of security knowledge and expertise to the Canadian marketplace.

In Canada, our complete focus as security experts is to provide innovative and quality security solutions to businesses across the country.

I cannot find a reference to G4S Justice Services (Canada) other than listings in the Yellow Pages, CanPages, and the like. G4S is an international company which was founded in 1901 in Denmark. Its headquarters are currently located in the UK. The Canadian subsidiary is in fact two entities G4S Secure Solutions (Canada) and G4S Case Solutions (Canada). Mr. Blakeway is not included on the website as a member of either management team. As I noted it’s all rather puzzling but that may be due to my ignorance of business structures.

It’s early days yet for NTS and I imagine this is the ‘growing pains’ part of the process and that these inconsistencies will be rectified and, perhaps, some of the more ‘hyped’ terminology regarding the products and the attempts to fuse the company name with the entire field of nanotechnology will be toned down.

Butterflies inspire anti-counterfeiting measures

The Morpho butterfly is a singularly beautiful blue impossible for artists to reproduce with pigments as the colour is due to nanostructures which cause the wing’s unique optical properties. (Image copied from Wikipedia essay on Morpho butterflies.)

Photograph of a Blue Morpho butterfly (Morpho menelaus) by Gregory Phillips.

The butterfly has excited a lot of interest in the nanotechnology field and this morning (Jan. 17, 2011) research scientists (Clint Landrock and Bozena Kaminska) based at Simon Fraser University (Vancouver, Canada) announced that in an effort to eliminate currency fraud they have found a way to duplicate the butterfly’s optical properties on paper currency. It all starts with holes (from the Jan. 17, 2011 news release),

Imagine a hole so small that air can’t go through it, or a hole so small it can trap a single wavelength of light. Nanotech Security Corp., with the help of Simon Fraser University researchers, is using this type of nano-technology – 1,500 times thinner than a human hair and first of its kind in the world – to create unique anti-counterfeiting security features.

How this works is microscopic gratings composed of nanostructures interact with light to produce the shimmering iridescence seen on the Costa Rican morpho butterfly. The nanostructures act to reflect and refract light waves to produce the morpho’s signature blue wings and absorb other unwanted light.

The highly advanced wing structures are the result of many millennia of evolution, and only recently have Nanotech’s scientists discovered how to reproduce these structures reliably. While others have talked about the possibility of re-creating it, Nanotech has made this a reality.

The U.S. Treasury, which produces up to 11 billion banknotes annually, is a potential customer for Nanotech’s product. The new U.S. $100 bill, designed with state-of-the art security features, was supposed to be introduced in February 2011 but it’s been delayed due to some manufacturing issues.

According to Blakeway [Doug Blakeway, SFU Venture Connection’s entrepreneur in residence and also CEO and chairman of Nanotech Security Corp.], Nanotech’s product – which has attracted the attention of treasuries internationally – is superior to holograms and can’t be duplicated.

“Nobody has ever done this,” he said. “We have succeeded while everybody is still trying to duplicate or imitate a butterfly’s wing because it absorbs light and gives off the color. There’s no color pigment – there’s nothing like a dye or anything else. It’s a hole that traps light and releases color.

“You can’t copy or scan it in, you can’t inkjet it on paper, you can’t do any of these things. It’s extremely sophisticated and expensive to make the shims and dyes to produce, but very inexpensive to produce it at the end. Anywhere you can think of where a hologram is being used today, our technology can replace it. It’s more secure than a hologram. You can’t lift it off – we can put it onto metal, plastic, or paper.”

There is a video clip of a Discovery Planet item about the scientists’ presentation at the recent Las Vegas Consumer Electronics Show. (Note: The clip is about 11 minutes long and the ‘Morpho’ money item is partway through.)

I’m a little puzzled about whether or not this is really the first time (as Nanotech Security Corp. claims) someone else has been able to reproduce the butterfly’s optical properties since there is a company in Japan, Teijin, which produces ‘Morphotex’, a textile that has the same properties as the butterfly. This was mentioned in my July 19, 2010 posting which also features an image of Donna Sgro’s dress made from the textile.