Presenting a new Chipless technology for low cost RFID applications

1. Presenting a new Chipless technology for low cost RFID applications

2. InkSure Technologies • Provider of covert, machine readable security solutions (“CMRT”) to definitively and quickly identify genuine branded products and documents for protection against counterfeiting • Our expertise in spectral detection of covert marks enables InkSure to provide the most advanced readers in the authentication industry • 4½ years of commercial sales • Billions of consumer products protected with InkSure technology • Product and Image Security (“PISEC”) award winner: 2000,2003,2006 • Member Document Security Alliance (“DSA”) and North America Security Products Organization (“NASPO”) • U.S. public corporation (INKS.OB) • Corporate Headquarters in Fort Lauderdale, FL; Global R&D Center at the Science Park in Rehovot, Israel

3. InkSure RF • Wholly owned subsidiary of InkSure Technologies Inc. • Holder of 3 patents, 1 patent application to print and read Chipless RF labels for various RFID applications • Highly skilled dedicated R&D team for reader/label development • Proof of concept successfully demonstrated publicly at IDTechEx’s RFID Smart Labels USA 2006 conference in Boston, March 29. • Approaching initial field testing, with commercial sales expected by end of 2007

4. So What is Chipless? • RFID systems involving codes/symbology that do not contain a silicon chip • Potential to produce the lowest cost RFID tag • Capabilities for printing directly on top of products or packaging • Passive/ Read only • Frequencies above UHF

5. Tens of Millions= Secure access, test tubes/blood samples, toys Hundreds of millions= Laundry, library, livestock, logistics, assets security Billions = Pallets, cases, air baggage, smart paper tickets, banknotes, financial cards, parcels drugs, archiving Trillions= Supermarket barcodes, brand protection Yearly Market Potential Source: IDTechEX Today, no more than several hundred million RFID devices are sold yearly.

6. Tag Price ComparisonsSource: IDTechEX Chipless Chip Range1m 32c Tag price* 10c 10-20c Range0.1m 4c Target to sell trillions a year 2c Anti-theft 1 bit ID 96 bits More Data k bit *When bought in millions

7. InkSure Vision for Chipless RFID • Achieve a sub-cent cost target for fully printed tag • Provide a completely printed symbology on or within the product/package using digital or conventional printing technologies with focus on inkjet engines. • Provide an anti-counterfeiting solution based on the unique RF properties of the ink used for printing the tag. • Address the reading of printed labels in difficult real life conditions • Non-line of sight • Any orientation/angle • Anti collision effect-identify single tags within tag groups • Provide 25bit to 96bit information applications

8. How our Technology Works • The existence of diffraction has limited the extent to which symbols or images (such as barcodes) can be compressed. • Diffraction is the bending, spreading and interference of waves when they pass by an obstruction or through a gap. When a bar code symbol is placed too near another symbol, its waves interfere with those of its neighbour (diffraction) and vice versa, making it impossible to accurately read either bar. • This limitation has restricted the density with which symbol based codes can be printed, and therefore the minimum size required for machine-readable codes. By extension, this has also limited the number of digits which can be used, for example, in barcodes.

9. Technology: Diffraction Phenomena • Current technologies do not take into account that the diffraction phenomena are predictable. That is, it is possible to place 2D objects within extremely high density, yet still use deductive methods to identify them • Although the labels produced using this method are 2-dimensional, the phenomena itself produces a 3D effect. In this way, it is possible to derive the exact position of the label, even if behind an obstacle. This capability minimizes the challenge of correctly identifying objects that are located directly behind other objects (“collision”)

10. Technology: Using The Diffraction Phenomena • Our approach : devise a code of simple objects together with algorithms for interpreting the phenomena produced when they are printed close to each other • Depending upon the wavelength used to query and transmit the information and the code used, it is possible to print the desired level of information in small areas • No silicon chip required • 96-bit printed code consumes only 10% of the conductive ink required for a printed RFID antenna • Detection principles based on Synthetic Aperture Radar (SAR), Interferometer Synthetic Aperture Radar (ISAR) and RF Holography (RFH)

11. How our Technology Works Each code produces a unique image. Red colors indicate the presence of code information Image processing algorithms detect the image and extract its information Segmentation of label information from background Multiple image separation Further analysis of the image completed only in the labels area

12. 96 Bit Tag Structure - Concept 108mm x 15mm • Sequence of 37 symbols, each positioned (or not) in 1 of 9 potential vertical positions • Special symbols for tag positioning • 96 bits matrix = EPC code capacity • Very high error correction capacity • Tag dimensions = 108mm x 15mm

13. How our Technology Works ConductiveInk Printing Technology EM Fields Diffraction Theory Radar Methods RF Signals Processing Antennas Techniques Digital Signals Processing Control Algorithms Imaging Algorithms Error Correct. Algorithms Deciphering Algorithms

14. Where Are We Now ? • Symbols have been tested to date on paper board, typical packaging materials and polymeric foils

15. Where Are We Now ? • Symbols have been printed using conventional and commercially available printing techniques Tag image – Using Screen Printing Tag image – Using Ink Jet Printing

16. Where Are We Now ? • Multiple label reading capability is showing positive signs. We have tested a pattern consisting of 2-3 labels and results were good reading and full separate identification of each tag in most of the test scenarios

17. 108mm x 15mm Where Are We Now ? • 96 bit tag size has been reduced: 108mm x 55mm

18. September 2006 Read Range =1 foot Read Speed=1 second( single tag) Information Capacity=up to 96bits Print Sizes=108mm x 15 mm(96 bits) Non-Line of sight reading=yes Any orientation read capability=yes Anti –collision=yes Anti-counterfeiting capability=no December 2007 Read Range =10 feet Read Speed = 1 second (stationary) Information Capacity=up to 128bits? Print Sizes= 108mm x 15 mm & Less Non-Line of sight reading=yes Any orientation read capability=yes Anti –collision=yes Anti-counterfeiting capability=yes Where Are We Now Summary

19. How Our Technology Will Be Used • Consumer Promotions Estimated Annual Volume Potential: Billions ¹ • Brand Protection needs for Multi-Layer Anti- Counterfeiting Estimated Volume Potential:100s of billions ¹ • Printing Industry –Sorting and Verification of Documents Estimated Volume Potential:100s of billions ¹ • Drug/Pharmaceutical identification Estimated Volume Potential: 100s of billions¹ ¹ ID TechEX and Internal estimates for unit volumes

20. How Our Technology Will Be Used • Asset tracking /internal identification Estimated Volume Potential: Hundreds of Millions¹ • Replacement of barcodes for added information and added “package real estate” Estimated Volume Potential: Trillions¹ • Anywhere “Low Cost and Easy to Print” is important= $ & ¢ !!

21. Next Steps • Complete tests over a maximum variety of substrates, packaging materials, application environments etc. • Complete the development of our “SAR/ISAR/RFH” and Processing algorithms. • Identify five partners for test programs • Phase One (Sept. ’06 through Feb. ’07): • Format and print InkSureRF codes onto selected products • Scan encoded products with prototype readers at InkSure • Phase Two (March ’07 through Aug. ’07): • Live field test involving readers, encoded products and customer IT • Commercial Release – September/October 2007