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NBT Equity Research LLC Sector: Transformative Technology Vertical Market: Automated Authentication/Security Technology Company: Visualant, Inc. VSUL www.visualant.net

Initiating Coverage January 20, 2011: Speculative Buy

Target Price: $2.25 Current Share Price: $0.42

Shares Outstanding: 38.8 million as of 1/20/11

Public Float: 16.4 million as of 1/20/11 Market Cap: $16.3 million as of 1/19/11

We initiate coverage on Visualant, Inc. (VSUL) as a pure-play on a unique, very low cost, patent pending technology for highly secure and accurate authentication technology across a very wide $20 billion+ market opportunity.

VSUL’s unique business model for a technology licensing firm—consolidating existing security/ authentication enterprises—gives the company a clear path to rapidly growing cash flow. This consolidation strategy supports the higher margin but “lumpy” licensing revenue model of most transformative technology companies we follow. We expect it to rapidly build current

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NBTEQUITY GROUP

www.nbtequityresearch.com NBT Research LLC NBT Communications LLC NBT Capital LLC

enterprise value from 25% margin revenues at what ultimately should become a mostly high margin technology licensing company.

Investment Thesis/Key Investment Points

Cheap, highly efficient primary and secondary authentication/verification technology is a holy grail in the tech world. Visualant’s unique and patent-pending way to “read” materials and liquids for their unique spectral signatures at the molecular/photonic level opens up vast and highly profitable opportunities across a wide range of applications and industries.

Combining the vast applications for VSUL technology with its security/authentication industry consolidation strategy, we see a very rare opportunity for both rapid enterprise value creation and substantial upside from licensing revenues for shareholders.

What Does Visualant Technology Do?

Visualant, Inc., develops low cost, high speed light-based security and quality control solutions for use in homeland security, anti-counterfeiting, forgery/fraud prevention, brand protection and process control applications.

The patent-pending technology uses controlled illumination with specific bands of light to establish a unique spectral signature for both individual and classes of items. When matched against existing databases, these spectral signatures allow precise identification and authentication of any item or substance.

Visualant’s proprietary technology analyzes the unseen but unique “spectral signature” or photonic fingerprint/components of color of ANY

NBTEQUITY RESEARCH © Copyright 2011

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