Q: Can you please tell us about your company and the specific problem or challenge that you are addressing?
Eurocontrol Technics Group Inc (CVE:EUO) is a public company that trades on the TSX Venture Exchange in Canada and the OTCQB (EUCTF) market in the United States. The Company specializes in the acquisition, development and commercialization of innovative authentication, verification and certification technologies. Eurocontrol has two wholly owned subsidiaries, Xenemetrix Ltd. and XwinSys Technology Development Ltd. both of Israel and an agreement with SICPA S.A. of Switzerland for earn-out payments of 5% (minimum $9 million) on revenues generated from the oil and gas marking and monitoring field relating to the sale of its former subsidiary Global Fluids International (GFI) S.A. to SICPA earlier this year.
Xenemetrix is a leading designer, manufacturer and marketer of ED-XRF systems, a metrology technology in the test and measurement market that is the most accurate and economic method for determining the chemical composition of many types of materials, including the analysis of petroleum oils and fuel. Xenemetrix has an exclusive long-term supply, maintenance and support agreement with SICPA GFI to supply SICPA GFI with Xenemetrix products and services related to the oil and gas marking and monitoring field.
XwinSys has developed a new and unique, fully automated and patented metrology system for the semiconductor industry that combines ED-XRF and 3D automated vision technologies.
Eurocontrol’s focus is the test and measurement field. Historically, the problem the Company focused on through its former subsidiary, GFI, was the illicit commercialization of oil and gas. With the sale of GFI in early 2016 to SICPA, Eurocontrol is still involved in the oil and gas marking and monitoring through earn-out payments from SICPA and also through the Company’s subsidiary Xenemetrix which exclusively supplies the detection equipment to SICPA GFI. The Company’s product focus through its subsidiaries and its M&A focus is test and measurement within the broader scientific instrumentation industry. In addition to the manufacture of ED-XRF equipment for customers worldwide, Xenemetrix is currently working with Netafim and DigiFlex to bring new products to market in the test and measurement space. The MOU with Netafim, a world leader in drip irrigation technology, is in the precision agriculture industry for the development of ED-XRF technology for use by farmers to test soil samples with the test data being shared in an information depository in the Cloud which when populated will provide farmers with relevant, important data towards maximizing crop yields. The MOU with DigiFlex, a company that has patented ink technology, is for the investigation and creation of a synergistic approach to security printing to combat counterfeit products utilizing ED-XRF technology.
Q: Can you please tell us a little about the market and the market opportunity?
The market for authentication, certification, test and measurement equipment is vast – not only precision manufacturing but also in the fight to combat the illicit economy which is estimated to be between $5 and $7 trillion dollars annually, including an estimate that between 10 to 15% of prescription drugs are counterfeit. XRF touches many aspects of daily life indirectly – it is used in the quality control of many products including determination of iron content in milk powder and essential minerals found in vitamin tablets to provide a couple of examples of how XRF plays a role in health care. The ability to screen unknown samples in their raw form aids in protecting the public from hazardous chemicals as well as identifying the elemental composition of evidence from a crime scene. Xenemetrix has approximately 1,000 spectrometers installed across a wide range of industries in both the public and private sectors including with government departments and groups that are funded by governments such as academia and defense.
In terms of combating the illicit market, one of the most effective ways for governments and companies to protect their tax base or products is test and measurement. Xenemetrix’s ED-XRF technology is integral for SICPA / GFI in the detection of fuel alteration. And for XwinSys, ED-XRF combined with 3D automated vision has been utilized to develop disruptive technology for the semiconductor and related industries. XwinSys’s patented Onyx system is at the forefront of metrology inspection systems providing thin film thickness analysis with nanometer resolution, measurement of oxidation layers and determining the geometry and composition of 3D-IC structures, the future of semiconductor manufacturing.
Q: Please tell us a little about your technology that drives your platform?
The technology that drives our platform is Energy Dispersive X-ray Fluorescence (ED-XRF) spectroscopy which is one of the simplest, most accurate and economical analytical methods for the determination of the chemical composition of many types of materials. The technology is suitable for almost all sample types and shapes (solids, liquids and powders) and for XwinSys is utilized in combination with 3D automated vision to measure the thickness and composition of multi-layer thin films.
Q: What geographic markets are you focusing on currently?
The Company’s subsidiaries are both based in Israel and developed in Israel with support from the Office of the Chief Scientist of Israel. With Eurocontrol’s subsidiaries products addressing global problems and global manufacturers and the current install base being worldwide, the Company is not focused on a specific geographic market, but more on specific markets that the Company’s technologies address including adulteration of oil, counterfeit products, precision agriculture and semiconductor manufacturing to name a few.
Q: What markets will you focus on in the near future and what is your plan to conquer them?
Eurocontrol is focused on partnering with successful corporations that can either bring the Company’s technologies to their customer base or that can utilize the Company’s technologies in concert with their products to expand their market. Examples of this strategy include the sale of former fuel marking subsidiary, GFI, to SICPA and the partnership with Netafim in precision agriculture. The Company’s subsidiary, XwinSys is fully focused on the semiconductor industry to introduce its Onyx metrology inspection system which was developed with input from global semiconductor manufacturers and was very well received when unveiled at SEMICON WEST.
Q: What are the key user benefits and features of your platform?
High precision and innovation. In terms of XwinSys, the Onyx metrology inspection system is a disruptive technology that provides users with a combined non-destructive inspection and in-line metrology system designed to handle the 3D-IC current and future challenges. This system with its hybrid configuration enables both inspection and metrology capabilities, along with small-scale material composition and 3D structure analysis.
Q: Who are your competitors?
Xenemetrix has a number of competitors in the ED-XRF field, the majority of which are significantly larger companies including to name a couple, Anton Parr GmbH and Bruker Corporation which purchased Jordan Valley Semiconductors Ltd., a competitor to Xenemetrix.
Q: What advantage does your product offer in contrast to your competitors?
Higher precision at a reasonable price and the ability to customize for specific applications.
Q: What makes your platform stand out?
Patented technological innovation to address specific industries like fuel marking, precision agriculture and the semiconductor industries as well as awards and certifications – for Eurocontrol, being listed on the PROFIT 500 for the past three years and for Xenemetrix holding numerous ISO certifications and being the recipient of two Frost & Sullivan awards in 2010 and 2015.
Q: Tell us about your team?
Eurocontrol has a strong management team, both corporately and technically. The Company is led by Chairman and CEO, Bruce Rowlands, who joined the Company when formed in 2006. Bruce Rowlands has over 25 years experience with emerging market companies in sales, operations and capital markets. Other members of the Board include SICPA representative, Gilles Léraillé, Vice President, Business Development for SICPA’s Government Security Solutions division, Dennis Logan, a Chartered Accountant familiar with publicly listed companies being the current CFO for a TSX Venture listed company and having spent 13 years in the investment banking community, Ken Wawrew, a seasoned high tech executive in the test and measurement space whose company, Image Processing Systems was listed on Deloitte & Touche’s Fast 50 report for three consecutive years and Paul Wood, an individual with over 25 years extensive M&A, corporate development and restructuring experience. From a management point of view, heading up the Israeli subsidiary companies is Doron Reinis, co-founder of both Xenemetrix and XwinSys and an individual with great insight into the future of ED-XRF technology who leads a staff of 50 comprising extremely talented technical and marketing individuals. Two other key members of the Eurocontrol corporate team are Andres Tinajero, CFO who is a finance professional that holds a number of degrees including a BA, a MBA and a CPA and Charlotte May, who has over 20 years experience in corporate governance, public company administration and marketing having experience on both the buy side and the sell side of the institutional brokerage industry.
Q: What is your focus for the next 6-12 months?
At a subsidiary level, commercialization of XwinSys’s Onyx metrology inspection system, solidifying technology marriages on Xenemetrix MOUs with Netafim and DigiFlex and at a corporate level, acquisition of companies that offer complementary technologies in the authentication, certification, test and measurement fields.
Q: How much money have you raised and from who?
Eurocontrol is well funded with Cdn$13.5 million in the bank at the end of August. The Company last raised funds in December 2010 and since that time has been self funded.
Q: Are you looking to raise another round? If so, how much?
Eurocontrol would consider raising funds for acquisition purposes.
Q: Anything else that you would like to add?
Eurocontrol is a widely held stock with significant institutional support including SICPA which owns approximately 13% of the outstanding shares. For an emerging junior company, Eurocontrol shares have good liquidity and are currently trading just above cash.