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Prepared by:

Danny Deadlock, MicroCap.com

Eurocontrol Technics Group (EUO.V 5 cents) January 22, 2015 __________________________________________________________________________________________

Energy Security Technologies including Authentication, Verification and Certification

www.eurocontrol.ca http://www.gfi-petromark.com/ http://www.xenemetrix.com/ http://xwinsys.com/

http://learnxrf.com/

Shares Outstanding: 89 Million / Market Cap $4.5 Million

Sept 30th: Cash and A/R $3.2 million / Debt $2.2 million

Nine month Revenue: $4.5 million / Gross Profit $2.3 million / Net Loss $80k

12 Month Capital Gain Target of 100% to 350%

Our target is based upon a multiple of two times annual revenue. If Eurocontrol lands one or two more country

contracts (fuel or crude oil authentication) in the next 12 months, it should move their revenue into the range of $10

million or more. Based upon a fair value of $10 to $20 million (1.5 to 2 times annual revenue), this should equate to a

(fair value) share price range of 11 to 22 cents and capital gains in the range of 100% to 350%

If it takes longer to secure contracts, it will take longer for fair value to materialize. If they land contracts quicker (or

larger) than expected, then the capital gain potential increases. Apparently there is growing interest from private equity

in this type of business and internationally there is very limited competition. Eurocontrol’s main competitor is Authentix

who I have commented on below.

A scenario I would like to see is a merger between Eurocontrol and Authentix that creates a single dominant player

within the industry (on a global scale). Private equity could easily finance such a scenario and it would free up the true

value of Eurocontrol.

The low price of crude oil and fuel will benefit Eurocontrol as low prices

allow governments to consider new or increased fuel taxes. This in turn

increases smuggling and fuel adulteration (leading to lost taxation revenue

and rising crime).

Eurocontrol has more in the pipeline outside of crude oil and fuel marking

(GFI Petromark / Global Fluids International) but until their other divisions

generate revenue I am only assigning value to GFI. Their XwinSys division may have something substantial that is close to

commercialization but until we see an announcement on this, it will remain “potential” value.

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A 3 minute VIDEO on this page of their website provides an excellent overview of GFI and its potential

http://www.eurocontrol.ca/subsidiaries.aspx

Risk: Idle Investment at times because the nature of their industry means their Sales Cycle is lengthy (they are always

dealing with politics and the most senior levels of government).

Reward: Contracts when awarded can be large and long term. For a small company this can have a significant impact on

sales, earnings and the share price. This potential also makes it difficult to buy the stock for a good price on material

news.

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The objective of this report is to identify the growth opportunities for Eurocontrol. It is very difficult to determine fair

value on a small company like this because we have no peer comparisons. In identifying the size of the market and the

potential growth, an investor can assign their own valuation based upon personal risk tolerance.

Over the years I have seen many small biotech or technology companies with little to no revenue taken over for several

hundred million dollars because their products or technology were unique and provided long term recurring revenue

growth. In the case of Eurocontrol and the unique nature of their business, we can only speculate on future growth

potential.

Investment Diversification

As the bear market in junior exploration enters its fourth year, the need for diversification on the TSX and TSXV takes on

greater importance.

In theory Eurocontrol provides countries with one of the only concrete “taxation solutions” on oil production or fuel

consumption. Many developed nations like Canada and the United States feel the problem is not bad enough to warrant

a solution but for dozens of other countries where oil theft, smuggling, and fuel adulteration are a huge problem, the

lost taxation revenue to the government (and the people) is a massive problem. A problem that could be resolved by

Eurocontrol – if given the opportunity.

Operating Divisions Overview

Eurocontrol specializes in the acquisition, development and commercialization of innovative energy security,

authentication, verification and certification technologies. The Company has three wholly-owned subsidiaries – Global

Fluids International S.A. (GFI), Xenemetrix Inc. and XwinSys.

1) Global Fluids International is a world leading provider of fully integrated marking, mixing and detection systems for

the oil distribution industry. GFI’s unique and proprietary liquid authentication system, Petromark™, is the direct result

of a joint venture with a world renowned research laboratory. GFI is the sole manufacturer and supplier of the

Petromark™ integral system, and it has been proven to be superior to all other solutions available in the market today.

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2) Xenemetrix is a leading designer, manufacturer, and marketer of energy-dispersive x-ray fluorescence (EDXRF)

systems and components. Located in Israel with a subsidiary in Austin, Texas. EDXRF spectroscopy is one of the simplest,

most accurate and economic analytical methods for the determination of the chemical composition of many types of

materials.

3) XwinSys is currently developing intellectual property that will combine 2D and 3D image processing technology, from

Brossh Inspection Systems Ltd. of Israel, with Eurocontrol’s subsidiary Xenemetrix Ltd’s Energy-Dispersive X-ray

Fluorescence (“EDXRF”) technology. The 2D and 3D imaging will be used for surface scanning of wafers and electronic

boards used in semiconductors, while the EDXRF technology will be used for elemental analysis of the materials that

comprise the wafers and electronic boards.

Petroleum Industry - Market Potential

GFI’s Petromark works in Gasoline, Diesel, Crude Oil, Heavy Black Fuel Oil, Refined Products & Solvents, Lubricants,

and Bio-Fuels

Annual global loss from the illicit trade of petroleum and related products is estimated at more than $100 billion.

Criminals steal crude oil and fuel from trucks, pipelines and ships to fund illegal activities.

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Eurocontrol’s technology acts as a deterrent for smuggling, tax evasion, adulteration and commingling of fuels.

The Petromark technology is covert, ISO 17205 approved (meaning it will hold up in court), and testing is done in the

field with a portable lab / analyzer. In addition, they are the only company with a solution for crude oil. Existing

methods for refined fuel use colored dyes that appear far less effective when compared to Petromark.

Eurocontrol has commercial contracts with three existing countries (Albania, Tanzania, and Uganda). They are in

advanced discussions with other countries and have strategic marketing efforts with dozens of other countries around

the world – including troubled oil giants Nigeria and the Sudan who are ideal candidates for “fingerprinting oil and

fuels”.

The sales process involves very high levels of government and industry - the typical sales and marketing approach does

not work. Eurocontrol will typically partner with a powerful corporation within the region. Someone who has strong

contacts and understands the complex nature of the political system and how it is affected by the petroleum industry.

Logic would say almost every country needs this technology – but we are dealing with governments, big business, and

organized crime. There are no easy decisions when it comes to a business of this nature. Unfortunately it is the people of

developing countries who suffer from the delay or avoidance in implementation (because of lost taxation revenue that

can be put back into infrastructure, health care and education).

Potential GFI Opportunities in 2015 and 2016

Eurocontrol is in discussions (several advanced) with the following countries and/or has submitted tenders for projects

that have been put out for bid. I don’t know the specifics or timing other than Hungary and Mozambique are apparently

well advanced.

Hungary Mozambique Zambia Ghana Nigeria

Morocco Cameroon Indonesia Senegal Philippines

There are 196 countries so the market is very large BUT developing and third world countries need to recognize the

problem and do something to counter the loss in revenue. For many countries, the

dilution, theft and smuggling of petroleum products (both raw and processed) is a

huge contributor (funding source) for organized crime and terrorism.

“Fuel Fraud Costing Europe More Than $4 Billion in Lost Taxes” [Bloomberg Aug 26,

2013]

“The heist underscored growing fuel theft, smuggling and fraud in Europe, where

governments from Poland to the U.K. are losing between 100 million euros and 1.3

billion euros in tax revenue a year.”

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Eurocontrol provides the solution by “Fingerprinting” oil or fuel at the molecular level and providing governments

with a proven solution. The Eurocontrol solution would mark the crude oil or fuel and that would not only allow them to

track where it is going, but it would help ensure criminals are held accountable. It would also serve as a significant

deterrent because right now there is no way to prove where crude oil originated.

Ex: Nigeria Loses Over U.S.$6 Billion Yearly to Crude Oil Theft, Says TUC Boss

http://allafrica.com/stories/201501141325.html

Zambia (Example of Potential & Demand)

https://www.daily-mail.co.zm/?p=16132

January 5, 2015

The Energy Regulation Board (ERB) intends

to introduce fuel marking to control fuel

contamination and dumping of the product

on the local market. Fuel marking involves

the introduction of a bio-chemical invisible

marker into petroleum products while

monitoring fuel marker concentration levels

using appropriate detection equipment.

The plan, which is contained in an ERB

report, will also help reduce the smuggling

of petroleum products into the country.

“ERB will introduce fuel marking in Zambia this year and onwards.

The regulatory body undertook studies of fuel marking and established that it is the most effective intervention to

control, minimise and eliminate fuel adulteration and dumping. “Adulteration compromises the quality of petroleum

products resulting in damage to vehicle engines, leading ultimately, to increase in the maintenance costs, and negative

environmental and health impacts from adulterated fuel fumes,” the ERB says in the report.

The measures will help ERB to maintain a level playing field in the downstream operations by eliminating perceived

benefits associated with unfair practices in the petroleum industry. The report notes that monitoring of fuel marker

concentration will be conducted at various points in the supply chain at pre-determined frequencies to rule out

malpractices. It notes that the fuel marker will help regulate the contamination of petrol or diesel with lower kerosene by

individuals.

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Other Countries

BRAZIL - 35% of the fuel alcohol market in the country is clandestine. The government estimates losses near $600

million. The “Fuel Mafia” embezzles, corrupts and issues death threats

INDIA - Fuel adulteration mafia has very high connections in government. Detection methods and standards are so weak

that little is being done or can be done until they change the system of tracking

MEXICO - At least one quarter of the gasoline and diesel sold in the country is mixed with chemical solvents resulting in

an estimated decrease of 23.2% in fuel sales (and taxes). The existence of a mafia dedicated to the theft of fuels, where

Pemex employees participated, has been discovered

COLOMBIA – an estimated 300,000 gallons of gasoline are stolen daily.

ISRAEL - Large fuel companies have big problems at gas stations where cheap kerosene is mixed with gasoline and diesel

ECUADOR – Fuel theft is estimated to cost the government almost $1 Billion annually.

PETROMARK TECHNOLOGY

Petromark™ is based on very safe X-ray fluorescence (XRF) analytical technology which uses the interaction of x-rays

with a target compound molecule to identify its exact composition and quantity. This non-destructive/ intrusive method

achieves unparalleled accurate results, quickly, and inexpensively.

The Marker has the following advantages:

It is embedded at the molecular level

and is invisible and impossible to

imitate, remove and/or alter.

It is an all-purpose marker.

Petromark™ marks and traces

gasoline, diesel fuel, crude and heavy

black fuel oil, refining

derivatives/solvents, lubricants and

bio-fuels.

It complies with engine’ emission

and environmental regulations and

was proven as “non-damaging” to

engines, mufflers and catalytic

converter systems.

It does not alter the characteristics

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of the marked fuel or other additives/markers that are present in the fuel and does not affect the performance

of the vehicles.

It is extremely stable in the fuel for extended durations, is resistant to light, heat and extreme weather

conditions.

It is ISO accredited and certified

Data Control

The system is remarkably fraud’ immune and the incriminating information can be directly transmitted in real

time.

Test results are displayed as PASS / FAIL and display the adulteration percentage and current marker

concentration in PPM.

The Mobile Analysis Units (MAUs) continuously transmits data (including GPS location) to a central

monitoring/control system:

Detection and analysis is conducted immediately on-site and transmitted in real-time for inspection and review

at the Control Center.

Authentix

http://www.authentix.com/industries/oil-gas/

Authentix would be Eurocontrol’s main competitor and CEO Bruce Rowland will waste no time explaining Eurocontrol’s

advantages over Authentix. I would expect nothing less from the CEO but when you listen to him he builds a strong case.

Authentix has fuel marking contracts in 15

countries and a lot of that may have to do

with their financial backers. In April 2008

they were taken over ($100 million +) by

The Carlyle Group, J.H. Whitney, and The

Manti Group. The group paid about two

times 2008 revenue. The Carlyle Group is a

very powerful global asset management

firm specializing in private equity with an

estimated $200 Billion under management.

While Carlyle Group gives Authentix extra

“clout”, there may be a growing list of

countries who would prefer not to work

with them for political reasons – the

company is based in Washington with very

close ties to the George Bush family and

the Republican Party.

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I am not yet sure how this will affect Authentix but as you can see from the table above, they have several very

important patents expiring in 2015. This may open some doors for Eurocontrol.

CONCLUSION

Eurocontrol will likely be a difficult stock to buy “on news” because typically the contracts are large, valid for years, and

can change the revenue model or valuation overnight. Our approach will be to give the company a twelve month

window and then re-assess as the business (hopefully) produces decent top line revenue growth.

The Eurocontrol CEO

is doing an excellent

job controlling costs

and budgeting so if

they are awarded any

larger contracts in

2015 and 2016, I feel

very confident he will

do a good job growing

their earnings (EPS)

and cash-flow.

The share price has

languished for the

past several years as it

has taken significant

time to establish markets and prove their technology.

Also what held them back was the involvement of an investment group from Toronto who they finally separated from in

2013 or early 2014. I will not mention any names but they were well known for paying themselves grossly excessive

management fees and they had a terrible street reputation. That “separation” was the best thing that happened to

Eurocontrol and CEO Bruce Rowlands (CEO).

Fuel theft is creating shortages across many developing countries and as

this article shows from January 15th, tanker piracy (crude oil and refined

fuel) is on the rise across Asia – not just Africa.

http://shipandbunker.com/news/world/801124-intertanko-rise-in-asian-

piracy-is-significant-and-worrying

These problems are nothing new but they are getting far worse as

terrorism grows, organized crime expands, and economies struggle –

citizens look for ways to avoid paying taxes and governments look for ways to tax more. Governments have a clear

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solution in Eurocontrol products and services but anything that involves government and politicians takes more time

than anyone ever expects.

It would make sense for Authentix to spend $20 million or more (20 cents per share) to acquire Eurocontrol and

consolidate the industry. This strategy secures new technology and removes competition allowing them to pick up new

revenue and markets. There is such limited competition in this industry but it is potentially a very large market. If they

wanted to sell Authentix, it also would make it easier to sell if Eurocontrol was out of the market.

Maybe if EUO can pick up another two or three countries they would be deemed as a serious threat – but then the

valuation should be more than $20M

As an investment EUO requires a lot of patience and at times tolerance for price volatility. But if they can start getting

more traction in 2015 and 2016, the capital gain potential from this level is very substantial - and we shouldn’t have to

assume a ridiculous amount of risk in the process (or so I am hoping).

Investment in Research & Development

The CEO would like to be in a position where they can invest more $ in research and development. The company has

several very promising new technologies that they would like to advance (plus they have access to new technology that

is complimentary but still provides diversification). In their efforts to control costs, they have deferred this R&D until

they secure new country contracts.

I would also like to see their share price higher so that they had the option to finance in stages (at more respectable

prices) and earmark a good portion of those funds to R&D. If you review the websites of Eurocontrol divisions (shown at

the beginning of this report), you will see where many future opportunities exist for growth and diversification through

new technologies.

I will follow Eurocontrol's corporate developments closely over this next year and report anything relevant within the

industry that could have a (material) impact on their growth.

CONTACT INFORMATION

Bruce Rowlands, CEO

browlands@eurocontrol.ca

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Report Produced By:

Danny Deadlock: Publisher & Equity Analyst, MicroCap.com

ca.linkedin.com/in/dannydeadlock

Dated: January 22, 2015

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MISC MEDIA on Fuel and Crude Theft

http://www.kvue.com/story/news/world/stratfor/2014/12/09/amid-mexicos-energy-reform-fuel-theft-poses-

risks/20133937/

"As opposed to the smaller actors previously involved, crime groups have the capacity to organize hydrocarbon theft on

a massive scale across multiple regions with a high level of efficiency."

http://www.proactiveinvestors.co.uk/companies/news/73293/eurocontrols-anti-fuel-adulteration-system-directly-

linked-to-big-increases-in-govt-revenue-73293.html

"Eurocontrol's anti-fuel adulteration system directly linked to big increases in govt revenue" [Oct 2014]

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http://www.busiweek.com/index1.php?Ctp=2&pI=2014&pLv=3&srI=53&spI=20&cI=11

East African Business Week (Eurocontrol Success in Tanzania)

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DISCLAIMER:

NO COMPENSATION (financial or otherwise) has been paid to Danny Deadlock or any company affiliated with

MicroCap.com. However, it should always be assumed that Danny Deadlock may own shares of Eurocontrol (purchased

in the open market) and may be an active buyer or seller at any point in time that this report is in distribution.

FORWARD LOOKING / CAUTIONARY STATEMENTS:

Certain statements contained in this report may constitute forward-looking information and statements. All statements in this report, other than

statements of historical fact, that address events or developments concerning Eurocontrol that may occur, are "forward-looking information and

statements".

Forward-looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue",

"estimate", "expect", "may", "will", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe", "budgeted",

"scheduled“ and "forecasts", and similar expressions and variations (including negative variations).

Forward-looking information and statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown

risks, uncertainties and other factors that may cause the public company’s actual results, level of activity, performance or achievements to be materially

different from those expressed or implied by such forward-looking information and statements.

In preparing this report, several estimates and assumptions have been made. Many of these estimates and assumptions are based on factors and

events that are not within the control of Danny Deadlock, MicroCap.com, or Eurocontrol and there is no assurance they will prove to be correct. Several

risk factors may cause actual results to differ materially from those anticipated in these forward-looking information and statements.

Although Danny Deadlock through MicroCap.com believes the expectations and forecasts reflected in these and other forward-looking information and

statements are reasonable, there can give no assurance they will prove to have been correct. Such expectations and forecasts can be affected by

inaccurate assumptions or by known or unknown risks and uncertainties. New factors emerge from time to time and it is not possible for Danny

Deadlock to predict all such factors and to assess in advance the impact of such factor on the public company’s business or the extent to which any

factor, or combination of factors, may cause actual results that differ from those contained in any forward-looking information or statements.

All of the forward-looking information and statements contained in this report are qualified by these cautionary statements. The reader of this

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disclaims any intention or obligation to update or revise any forward-looking information and statements, whether as a result of new information, events

or otherwise.

This is not an offer to sell or a solicitation of an offer to purchase securities of Eurocontrol. This report is intended to be educational in nature

and for informational purposes only. The reader is cautioned that they should personally verify (validate) all information contained within this report.

Danny Deadlock makes no guarantees (either direct or implied) that the information contained within this report is free of errors.

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contents of this report or otherwise. In particular, no representation or warranty, express or implied, is made as to the fairness, accuracy or

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contained in this report. The information contained in this report is provided as at the date hereof and is subject to amendment, revision and updating in

any way without notice or liability to any party.

Information contained herein has been prepared by Danny Deadlock without the assistance, input, or influence of Eurocontrol. While Danny

Deadlock has used best efforts to ensure the accuracy and completeness of the information presented, such information has NOT been

independently audited or verified and Danny Deadlock (or any affiliated companies) assumes no responsibility for its accuracy.

The forward-looking information contained in this document is expressly qualified by this cautionary statement