An Israeli company that has developed technology to apply a unique traceable chemical marker to any substance – solid, liquid or gas – is to list on the ASX in September looking to raise $6.5m to further develop and commercialise its technology.
Security Matters’ says it is able to create a unique chemical for each item to be tracked. “The company’s team selects a combination of molecules based on the specification of the customer and marked material (for example, the marked medium, the production process, the end use of the product, regulatory requirements etc).”
It also claims to have developed a unique reader that “can identify the marker and identify a response at a sub molecular building block level, making the marker identification highly accurate.”
Further, it claims to also be able to identify the concentration of the marker chemical within a product, so can detect if the monitored material has been diluted or adulterated.
The company is rather vague about its reading technology. It describes a reader as “a patented wavelength spectral profiling system that ‘reads’ markers by detection of energy from the ‘read’ object in response to an energy-ray applied to it.”
It says it is presently using “a generic x-ray wave reader … altered according to the company’s specifications to convert it to a reader.”
This suggests the reader fires X-rays at the material and then analyses the reflected signal: the prospectus says it is able to simultaneously read markers embedded in several layers of packaging and in the enclosed product.
However, the company for some reason seems reluctant to be explicit about its use of X-rays.
Founder and CEO Haggai Alon told IoT Australia “our special reader emits energy and has a unique band of energy sent to the object to read the marker.”
When IoT asked, “you create a molecule that you are able read with some sort of radiation” Alon corrected us saying: “Radiation is a word I did not use.
When we asked, “what sort of energy, are you talking about electromagnetic radiation?” he replied: “The only thing I can say without going deeper is that is from the family of X.”
Three key technologies
Alon said there were three components to the company’s technology
“There is one part creating the sequence of the molecule, then there is unique know-how to embed it in different materials and different phases by choosing different families of materials that are relevant to the substrate.
“Second is our special reader that emits energy and has a unique band of energy sent to the object to read the marker. The third leg is the software and the algorithm that decodes the physics and creates the real information and encrypts it once more to make it secure.”
Early partners named
He said the company was already working with a number of companies to implement its technology.
“We are in proof of concept pilots with BASF, the biggest chemical company in the world and with Perth Mint. We are already commercial in the plastics area through Kafrit a public traded company in Israel. So we can penetrate anything that holds plastic. We have a diamond project with a Canadian partner and we have just signed with Intel.”
The company says it has been accepted into Intel’s Ingenuity Partner Program and Intel will investigate use of the technology in electronics and silicon wafer manufacturing.
According to its prospectus, in May 2018, Security Matters Israel entered into a Memorandum of Understanding with Gold Corporation, which trades as the Perth Mint for the mutual development of a marking and reading solution for the gold mining and refining sector incorporating the company’s technology.
With BASF, the prospectus says BASF’s Performance Chemicals division is evaluating different use cases in which Security Matters’ technology could bring value to BASF and the parties are currently investigating these use cases to choose the first proof-of-concept.
Business development partners
Security Matters’ business development efforts within the Australian market will be led by John Poynton, chairman of Jindalee Partners, a member of its advisory board. The business development efforts outside of Australia will be led by two of the company’s directors, David Rosenblatt and Dr Gregory Clark.
According to the Prospectus, Jindalee Partners assists technology-based companies through all parts of the commercialisation cycle from start-up funding, partnering, internationalisation and listings.
Clark spent 15 years as a research staff member and group leader in the IBM Research Division in New York. He has also been president and COO of Loral Space and Communications and is currently a director of NextDC, chairman of the ANU Advisory Board on Science and Engineering, chairman of CUDOS, a research centre of excellence across several universities.
Why the ASX?
Alon said the company had chosen to list on the ASX because of Nathan Barbarich, an executive at the lead manager RM Corporate Finance. “Nathan has brought other Israeli companies to Australia and has a good name in Israel. RM gave us a good offer,” he said.
“Secondly both government and financial markets are doing a lot to bring Israeli companies to Australia. Third the ASX has really created a good affordable track for early stage companies. You get an answer as to whether you can be listed very fast: 16 to 18 weeks, and it is not expensive.”
He added: “Being listed in Australia a good milestone. You get the regulation, the transparency the experience of being traded. And we work with big companies that appreciate the fact that a small company is listed. And the liquidity in the Australian market is tempting. We are very close to a lot of money.”
The company says it plans to identify and service market leaders across sectors and provide them a white label solution “to solve brand owner issues away from public attention.”
Alon said: “Our strategy is to get the leading companies in the relevant verticals to adopt our technology and by that to become the industry standard and the regulatory best practice.”
He said he expected these companies would be responsible for getting the technology recognised by regulatory bodies where necessary.
Technology developed by Israeli Government
The company to be listed, Security Matters Australia* will acquire the company that holds the intellectual property, Security Matters Israel. Its core technology was developed by the Soreq Nuclear Research Center, an Israeli Government research and development institute for nuclear and photonic technologies under the Israeli Atomic Energy Commission.
According to the Security Matters prospectus its core technologies are covered by US Patent 8158432 B2 “Method and system for marking and determining the authenticity of liquid hydrocarbons”. In January 2015, Security Matters Israel entered into an agreement to license the source IP and commercialise and develop the technology further.
Since then the company says it has filed a further 12 patent applications and has raised $US4.45m from several investors under a number of different investment rounds. An additional $US1.68 million was raised in May and June 2018.
* Not this Security Matters
At the time of writing there is no web site for Security Matters but you will find at https://www.secmatters.com/ details of SecurityMatters a company that “provides critical infrastructure and industrial automation companies with best-of-class industrial cyber resilience technology that enables quick identification and recovery from threats to operational continuity.” It has no connection with Security Matters.
