Presentation of new patent "INVISIBLE" high security barcode printing and reader system aimed at security printing, Brand protection and logistics

1. 1 Presented to you by: - Agency for Eastern Europe

2. Nicanti in shortA joint venture in Printed Electronics with saleable products Nicanti Oy, a Finnish company, develops, manufactures and markets security solutions based on printed electronics: Company established in 2007, Invested cash more than 1.500.000 €, Technology developed with VTT and Itaca Nova, Based on special inks and radiofrequency readers, A low cost & large volume security solution, The solution is patented, microchips are propriatory, Many applications possible also out of security, Main owners of the company are: 2 July, 2009 2

3. Nicanti in short Mission and Vision of Nicanti Oy Nicanti vision: To become a leading Electrical Coding Systems provider and a notable player in global security solutions market. Nicanti mission: To protect customers’ goods and documents from counterfeits with solutions which are reliable, cost efficient, easy to use and suitable for large volumes. Nicanti’s solutions add significant value to customers by safeguarding their revenues and integrity of their brands. 3 July, 2009 3

4. Nicanti in shortAchievements to-date 2007: Proof of concept Establishment of Nicanti Oy, R&D activity and proof of concept with VTT Oy. 2008: Development & Prototyping Development: Microelectronics (RF microchip), Special eCode inks, Encryption and code geometry algorithms, Patent applications, first prototypes manufactured. 2009: Start sales & Industrialisation Manufacturing of pre-series in industrial envirnment, Organisation of the supply chain, Secure www-interface completed, Sales activity started in March, Selection and training of printers, First customer order received in June. 4 July, 2009 4

6. The Nicanti reader is able to measure the variations of these properties and therefore to read hidden digital information.

7. Every object or document may contain different information.The Nicanti tmtechnologyispatent pending 5 July, 2009 5

8. Nicanti eCode Nicanti Reader Data management The reader uses Radio Frequency to detect the code. Only Nicanti reader can decrypt the code. A customer key is required to decrypt the code, give info on authenticity and send the information to IT system. Simple reader: “Check”: Gives information on authenticity. Advanced reader: “Numeric”: May send code to PC or Mobile Phone after decryption. Information is compared to original in DB. The authentication data is given by the customer. Nicanti manages the data, secured web-interface. Customer has access to information related to hisproducts and documents. Data can be extended to supply chain or retailing info. Encrypted codes are generated with Nicanti software on https web. Content of information: 96 bits Inks with taylored electrical properties are used to print the codes without silicon or silicon based chips. Printed inks can be overcoated with standard inks. Transparent or visible inks. Substrate may be paper, packaging or any rigid/flexible non-mettallic substrate . The Nicanti offering July, 2009 6

9. The Nicanti OfferingWhy should customers consider the Nicanti solution Revenue increase from reduction of fakes: Protection of originals, cloning or counterfeiting eCodes is practically impossible, Transparent inks enable eCoding without visible marks to printing surface, eCode can also be over-printed with normal colours and images of the brand, Reliable: Inks are stable in time, no loss of information, no chip on pack or on the document, Identifying electrical properties with radiofrequency waves is existing technology, Readers already manufactured in industrial environment, Affordable for mass markets: eCode contains same infomation as RFID but is 20 times cheaper (one cent technology), Nicanti Readers are durable and cost is very low (based on customized microelectronics), Easy and flexible: Readers are easy to carry, simple to use, checking does not require any knowledge of product, Printing process as with normal inks, no extra machines or components, Environmentally friendly: No metal, no silicon in the code, a detail that can be a driver! 7 July, 2009 7

10. Technical information How the Nicanti system works – Step 1 eCode generation: In a protected web site a customer key is generated (128bit). eCodes are generated based on the input of numeric information (96 bits) which has been encrypted with the customer key. The drawing of the eCode is made available in pdf or binary format. It is virtually impossible to generate an eCode autonomously because, both the code and the key, contain internal characteristics. (demo available on http://nicanti.xenonlab.com) July, 2009 8

11. 9 Technical information How the Nicanti system works – Step 2 2. Printing of the eCode: A special ink is required, may be pigmented or transparent (Nicanti Ink). Fixed eCodes (changes are rare): Offset, Flexo or Silk Screen printing. Serial eCodes (changes every print): Inkjet, Thermal transfer printing. Substrates: paper, rigid & flexible plastics, textiles .... (no metal). During the printing process the eCode is usually over-coated with traditional ink and therefore is made invisible. July, 2009

13. Acquisition of the code geometry,

14. Decryption of the geometry and verification of the authenticity of the internal characteristic,

15. If authentic the information is send to PC or Mobile Phone by cable, WLAN or Bluetooth.10

17. Microelectronics and Sensors,

19. Use of special security inks (only available through secure channels),

20. Use of cryptography and customer keys (customizes the system for every customer),

21. Microchip developed by Nicanti (retro-engineering of analog chip is not possible),

22. Specific firmware difficult to develop,

23. High security cryptographic algorithms for data transmission (equivalent to banking),

24. Possible connection to a database for code authentication.These combinations make the system very safe and easy to use.

25. Future development opportunities Future applications inside and out of the security Security applications: Non-Security applications: Use of programmable eCode Inks: Ink is not conductive when printed, laser or RF may program the ink further down the process. Miniaturisation of the eCode: Small two-dimension codes, new sensor geometry required. Distance reading: RF principles to be used to read in distance. Double security inks: A second security characteristic in the ink enhances the difficulty of copying, modification on reader required. Integration/customization: Proof of concept in mobile phone made, developments required. Brand communication: Striping of code can give information to consumers and suppliers. Multi Media applications: Low cost readers for home applications, games. Lotteries: Low cost substitution of scratch cards. July, 2009 12 VTT, with Nicanti’s support, is already running two R&D projects on some of these ideas. The projects (920K€) are sponsored by TEKES (Finnish government).

26. Market and competitionCounterfeiting, unfortunately a double digit industry Market potential: 5% of world trade, approximately 500 billion Euros, is based on counterfeited products, Branded good producers can loose as much as 15% of revenues to counterfeits, 10% of drugs sold in US are fake, 25% in developing countries! (source IAA), Today, the global expenditure in security solutions is about 5 billion Euros annually, The market is global and grows over 10% p.a., Globalisation made life earier for counterfeiters, solutions can be copied at lower costs and control of is not so strict anymore. For more information go to: http://internationalauthenticationassociation.org/content/counterfeit_statistics.php Customer needs and supply: Need for security solutions is vast and urgent (in industry and governament agencies), Customers are against costly solutions and complex applications, Relibility, low cost and easiness are the key requirements, Several security solutions available, not many combine low cost and reliability. 13 July, 2009 13

28. Natural health

30. Cheques, notes

31. Tickets, coupons

32. Security IDs

33. Office equipment

34. Machinery

35. Industrial spare parts

36. Consumer spare parts14 July, 2009 14

37. July, 2009 15 Market and competition – Security Techniques 1From “tactile/visual “to “numeric” security increases, but not always the cost! Increase in security “Visual/Tactile” methods: Holograms, Intaglio Printing, Special Colour effects, Controlled defects … Advantages: Simple, no reading equipment required, “emotional”. Disadvantages: Relatively easy to copy, no serial information, high cost. Instrumental Analysis: UV, IR, Refractometry … Advantages: Easy, Disadvantages: The “trick” is easy to copy only difficult to find, no serial info. “Numeric” Information: RFID chip, Surface recognition …. Advantages: May be used for tracking & tracing, very practical (RFID) Disadvantages: Cost of readers and unit cost of assembled chip. Nicanti has reduced the cost of these numeric protection systems.

38. Market and competition – Security Techniques 2Commonly used competing solutions 16 July, 2009 16

39. CUSTOMER Devliery of Readers Devliery of printed eCode Order for eCodes Order for Readers PRINTER NICANTI READER MANUFATURER Specification for eCodes Specification for Readers Deliveryof Microchips Order for Microchips (Delivery of inks) Order for inks INK PRODUCER ASIC MANUFACTURER Nicanti operations and supply chainA rough operating model, which may be adapted case by case. Delivery of inks DATA MANAGEMENT 17 July, 2009

40. 18 For further information, demonstration and pricing please contact: Contact details: Jiri Perkous Labska 183 277 15 Tisice +420 725 797 238 Czech republic jperkous@tisice.cz Your Eastern Europe agency