1

- Agency for Eastern Europe

Presented to you by:

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: 2July, 2009 2

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

Nicanti in shortMission and Vision of Nicanti Oy

July, 2009 3

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.

4July, 2009 4

The Nicanti offering- Basic ConceptsWe modify and measure electrical properties of materials, a simple RFID

5

Some Physics:• When materials are exposed to Radio

Frequency (RF) they react in a different way as a function of their electrical properties (conductive & capacitive).

The Nicanti solution:• With a printing process, the electrical

properties are modified in a controlled way.• The Nicanti reader is able to measure the

variations of these properties and therefore to read hidden digital information.

• Every object or document may contain different information.

The Nicanti TM technology is patent pending

July, 2009 5

The Nicanti offering

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 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 andsend 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.

Nicanti eCode Nicanti Reader Data management

July, 2009 6

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! 7July, 2009 7

Technical informationHow the Nicanti system works – Step 1

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

9

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.

Technical informationHow the Nicanti system works – Step 2

July, 2009

July, 2009 10

3. Reading of the eCode:

Only the Nicanti reader can read and decrypt the code and only if it contains the customer key.Customer key is downloaded through a secure protocol on Internet (banking standards achieved).

The reader is striped in the area where the code is printed (see picture).

Operations performed by the reader:– Detection of the presence of eCode ink,– Acquisition of the code geometry,– Decryption of the geometry and verification of

the authenticity of the internal characteristic,– If authentic the information is send to PC or

Mobile Phone by cable, WLAN or Bluetooth.

10

Technical informationHow the Nicanti system works – Step 3

July, 2009 11

Combination of 3 disciplines:• Polymer and nanoparticle science,• Microelectronics and Sensors,• Mathematics and Information Technology.

Practical security aspects:• eCode is not visible (therefore cannot be cloned),• Use of special security inks (only available through secure channels),• Use of cryptography and customer keys (customizes the system for every

customer),• Microchip developed by Nicanti (retro-engineering of analog chip is not

possible), • Specific firmware difficult to develop,• High security cryptographic algorithms for data transmission (equivalent to

banking),• Possible connection to a database for code authentication.

Technical informationWhy is the Nicanti security system is superior in security

These combinations make the system very safe and easy to use.

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.

Non-Security applications:• 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

Future development opportunitiesFuture applications inside and out of the security

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).

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.

13July, 2009 13

• Phones, cameras, iPods• Cosmetics, beauty care • Luxury items • Branded or baby food

14

Market and competitionPotential customer segmentation

Documentsof value

Brandedconsumer goods

• Taxation receipts

• Cheques, notes

• Tickets, coupons

• Security IDs

Healthcare and medical

• Pharmaceuticals

• Natural health

• Medical equipment

• Office equipment• Machinery • Industrial spare

parts • Consumer spare

parts

Brandedindustrial goods

July, 2009 14

July, 2009 15

Market and competition – Security Techniques 1From “tactile/visual “to “numeric” security increases, but not always the cost!

“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.

Increase in security

16

Market and competition – Security Techniques 2Commonly used competing solutions

Holograms RFID Tags Bar Codes Surface Recognition

Physical Sensitivity

Magnetic Stripes

Nicanti e-Codes

SOLUTION DESCRIPTION

Printed hologramDirect print or on

tag.

Microchip with antenna on a tag.

Bar codes printed with normal inks.

Digital memoriz. of surface or

defected artwork.

Ink requiring special equip. to

be detected.

Stripes of magnetic material

with info.

Ink with tailored electrical

properties.

MATURITY OF TECHNOLOGY Mature Medium Mature New Mature Mature New

READING METHOD

Visual (no reader) RF, Contactless Optical readers Laser or scanner UV, IR, therm. lampPhotomultipliers

Magnetic readers RF Nicantie-Code reader

DIGITAL No Yes Yes Yes No Yes/No Yes

UNIT COST 5-20 cts€ 7-150 cts€ < 1 cts€ > 5 cts€ (?) 1 cts€ 2-10 cts€ 1 cts€

TYPICAL APPLICATIONS

Consumer & industrial goods, documents.

Expensive consumer and industrial goods.

Low cost goods, documents.

Low series consumer goods.

Consumer goods, documents.

Documents. Documents,All types of goods.

STRENGTHS

No reader required.Visible to consumer (perception).

Very practical use.Combines logistic and security in one device.Safe in expensive version.

Very simple to read.Easy to print.Very Low cost.

Not visible.No special tooling.Difficult to copy.

Easy to checkEasy to applyLow cost.

Easy to checkCan contain some information.

Simple to read,Low cost,Cannot be self generated,very difficult copy.Control of technology.

WEAKNESSES

Original barrier for protection (high cost tooling) not valid anymore in China.Have to be expert to recognize a fake.

Only safe in expensive version.Size and composition of tag.Conceived as a logistic tool.Large size.Cost of reader.

Not considered secure anymore.

Very high cost for memorizing data.Expensive reading costs (need special reader and/or special software).

Once you know the trick, very simple to copy.Have to be expert to recognize a fake.No serial information.

Application costs.Poor security.May loose memory.Not environmental friendly.

New technology to be tested.Start-up company.

July, 2009 16

17

CUSTOMER

NICANTI

Order foreCodes

PRINTER

INKPRODUCER

(Delivery of inks)

Order for inks

Specificationfor eCodes

Order forReaders

READER MANUFATURER

ASIC MANUFACTURER

Delivery of Microchips

Order forMicrochips

Specification for Readers

Devliery of printed

eCode

Devliery

of Readers

Nicanti operations and supply chainA rough operating model, which may be adapted case by case.

DATA MANAGEMENT

Delivery of inks

July, 2009

18

Your Eastern Europe agency

For further information, demonstration and pricing please contact:

Contact details: Jiri PerkousLabska 183277 15 Tisice+420 725 797 238Czech republic jperkous@tisice.cz