Eurocontrol Technics Group Inc (EUO-X)

They put a tiny quantity of a specialized chemical into petroleum products, and then a spectrometer finds out if it is the proper concentration. They sold this part of the business to a Swiss company and have a 5+ year kind of a royalty stream. The company is working to sell some very sophisticated equipment into the semiconductor space. They are also beating the bushes in Israel, where they have had a long-term source of innovations. If they are successful in 3-D imaging and a portion of extremely sophisticated stuff they are doing in the semiconductor space, it would be optimistic. He sold his holdings.

This is currently trading for cash. They have a royalty agreement with a guarantee for the next 5 years. Partnered with SICPA which is the key which has a system that puts a marker into petroleum products, to figure out whether or not the product is what it should be. Also, has the Xenemetrix side, and are hopeful that between now and the end of the calendar year they’ll have a sale of this device for over $1 million. Also, hoping for some additional sales in the next 12 months. The stock is cheap. People are waiting to see if they have success with the new products introduced. The challenge with the SICPA portion is that it is a very large and private company in Switzerland. Only if you end up seeing a massive increase in the sales and/or royalty stream, will you end up seeing any potential indication of what is happening on the SICPA front. Good relationship, but not a lot of transparency.

One of the more hidden high-tech plays within his portfolio. He likes management. At the molecular level, they can track oil to see if it has been diluted or not. In this whole terrorism thing, this has become a very big deal. A very interesting technology and going forward they will do quite well.

He is waiting to see how they are making out with market reaction to the semiconductor inspection device as well as potential acquisition.

Their specialty in the division they sold to a Swiss company is that they take 4 parts per million and put it into petroleum products to find out whether or not there has been dilution of the product and to make sure that people are paying the proper tax. A very big recurring revenue model. They receive a guaranteed minimum 5% royalty over the next 5 years. This gives a cash value of 24.5 cents and the stock closed today at $0.18. They are now looking at taking on some acquisitions. His 2^nd largest holding.

Molecular marking, injection, monitoring and control components for the petroleum industry. Now partnering with SICPA. Doesn’t know if this will be a very substantial winner. A very small company. Increasing revenues. A market cap of under $16 million.

His 2^nd largest personal holding, which he picked up in Jan-Feb in the $.05-$.07 range. The most recent quarter of earnings was in excess of 40%, and they were also given an award for their great technology. Cash flow positive. About 85% of their business is recurring because of the Petromark side. It takes 4 parts per million and puts it in oil or diesel fuel so they can figure out if people are diluting or doing things they shouldn’t be. Have 3 large clients who spend about $1 million a year for the product, but are able to capture about $10 million a year of additional tax revenue. With the decline in oil prices, the push for governments to end up invoking the system is even greater.