Foundation for New Industry; Visualant's ChromaID™ Authentication and Diagnostic Technology

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Foundation for New Industry; Visualant's ChromaID™ Authentication and Diagnostic Technology

Company Issues Letter from Founder and CEO, Ron Erickson

SEATTLE--(BUSINESS WIRE)-- Visualant, Inc. (OTCBB:VSUL), an industry-leading provider of chromatic-based identification and diagnostic solutions with its ChromaID™ technology, issued the following letter:


Dear Visualant Shareholders and Partners:

We have recently made a number of announcements that are strategic in nature and significant to the Company's future. As a consequence, I feel it makes sense to provide an overview and a context for these announcements and give you a foundation for understanding Visualant, its ChromaID technology and the opportunity before us. Many of you have followed us for some time; hence, much of what I write will not be new to you. For new followers of Visualant, I hope this letter will enhance your understanding of the Company, ChromaID and its potential.

We have been working on the Visualant technology for several years. Dr. Tom Furness and Dr. Brian Schowengerdt, working in the lab, created what we are now branding as ChromaID™. The history of how the technology came to exist and how it works is a fascinating story. It is well told in "The ChromaID Story" which you can find at http://visualant.net/resources/Visualant_The_ChromaID_Story.pdf on the newly revamped Visualant website at www.visualant.net.

After laboring in the laboratory for several years, in 2012 we began taking serious steps to move into the marketplace. We obtained four patents covering the intellectual property underlying ChromaID and continue to pursue additional patents for our technology. We entered into an important strategic relationship with the world-class manufacturer Sumitomo Precision Products. To show their enthusiasm for VSUL, Sumitomo became an equity investor, in addition to a licensee of the ChromaID technology, and a joint development partner. With their critical assistance, new demonstration units were developed and demonstrated to the world at the large instrumentation show, JIMA, in Tokyo in October of 2012. We brought three demonstration units back to Visualant headquarters in Seattle, and Forbes magazine published an article which includes a series of pictures demonstrating some of the prototypes we have to look forward to (http://www.forbes.com/sites/phillipkeys/2012/08/08/us-and-japanese-companies-combine-to-bring-precision-spectral-matching-to-the-masses/).

We have been actively demonstrating the ChromaID technology over the past three months to a number of potential licensee and development partners. Most recently we demonstrated ChromaID at the Photonics West trade show in San Francisco in February of this year. We met many potential partners and discovered new and interesting possible applications for the ChromaID technology. The highlight of the show was winning the coveted so-called "Oscar" of Photonics - the Prism Award as Product of the Year in the Green and Sustainable category. We are very proud of this achievement, especially with product sustainability increasingly important to the Fortune 500. I thank everyone on the Visualant team and all of our supporters and shareholders who helped us achieve this award.

The announcement of this award came just days after the announcement that the Company acquired all of the remaining rights associated with its convertible debenture financing. The details of that transaction were set forth in an 8K (see: http://biz.yahoo.com/e/130130/vsul8-k.html) filed by the Company on January 29, 2013. Additionally, an investor group and company insiders and affiliates acquired the outstanding common stock previously held by such debenture holders. As I stated at the time, "We are pleased to resolve all outstanding matters with our prior convertible debenture holders. With the acquisition of their common stock as well, we have established a foundation for the Company's growth." Simply put, this transaction removed the potentially dilutive impact of the debenture holders and privately placed their stock in the hands of Company insiders and affiliates and other holders. We feel this is an important transaction due to the ties and commitment to the Company it demonstrates. More detail on this transaction and the Company can be found in our most recently filed 10Q (see: http://biz.yahoo.com/e/130211/vsul10-q.html).

Today, we feel well-positioned to move forward. We believe we have a strong intellectual property underpinning ChromaID, a great strategic partner in Sumitomo Precision Products, a significant industry award under our belt, and a great team of scientists and managers at Visualant. So, what are our plans? As I say on the Visualant website, "The most interesting application of the ChromaID technology is the one I cannot imagine." That is very true. As a consequence, our first product will be a Development Kit. The Development Kit, which we expect to begin selling to select interested parties around the world during the quarter ending June 30, 2013, is anticipated to be our first technology revenue producer. It should allow potential partners and licensees to work with the ChromaID technology and develop applications in their own industry or field of use. We hope to see many exciting applications flow from the exploitation of the Development Kits. We will be making a formal announcement of the Development Kit's availability and pricing in the very near future.

Following on the heels of the Development Kit, we plan to bring our second product, our so-called "Exemplar Product," to market in 2013. This is expected to be a product we will develop and bring to the market with a distribution partner. We plan to use our TransTech subsidiary (which has annual revenues of over $8 million), which will be a ready-made channel of distribution for much of the ChromaID technology and products.

At Visualant, we are convinced that our ChromaID is technology around which an entirely new industry can be built. We have previously discussed the broad applications of ChromaID in the authentication and diagnostic marketplaces. Those two categories cover a myriad of other potential uses and opportunities in the largest industries in the world: Security, Environment, Medical, Consumer Products, Agriculture, Pharmaceutical, and so many more.

Properly brought to market, ChromaID has the potential to do a great many things: authenticate passports and driver's licenses and currency, see oil in water or water in aviation jet fuel, diagnose certain maladies and human conditions (work we are pursuing in our labs today), make cosmetic assessments and even help you match paint color or tooth color for your new crown, insure the antibiotic or blood pressure medication you are taking is real and not counterfeit, be embedded in your smart phone so you can have an authentication/diagnostic tool in your pocket, etc...the list goes on, limited only by the imagination. For, as I say, "Everything in the world has a unique machine readable chromatic identifier." It is nature's fingerprint and we can read it with our ChromaID.

Join us in imagining the future for Visualant and its ChromaID technology. Go to www.visualant.net and learn more. Make plans to obtain a Development Kit.

We look forward to hearing from you. We have an exciting year ahead and we look forward to sharing it with you.

Sincerely,

Ron Erickson
Founder and CEO

About Visualant, Inc.

Visualant is a public company whose shares trade under the stock symbol VSUL. The Visualant Spectral Pattern Matching technology directs structured light onto a substance, through a liquid/gas, or off a surface, to capture a unique ChromaID. When matched against existing databases, a ChromaID can be used to identify, detect, or diagnose markers invisible to the human eye. ChromaID scanner modules can be integrated into a variety of mobile or fixed-mount form factors. The patented technology is disruptive, making it possible to effectively conduct analyses in the field that could only previously be performed by large and expensive lab-based tests.

Visualant entered into a one-year Joint Development Agreement on May 31, 2012, with Sumitomo Precision Products Co., Ltd. ("SPP"), which focuses on the commercialization of the SPM technology and a License Agreement providing SPP with an exclusive license of the SPM technology in identified Asian territories. For more information, visit http://www.visualant.net.

Sumitomo Precision Products Co., Ltd. is publicly traded on the Tokyo and Osaka Stock Exchanges and has operations in Japan, United States, China, United Kingdom, Canada, and other parts of the world. Additional information on SPP is available at www.spp.co.jp/English/index2-e.html.

Safe Harbor Statement

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. This release contains forward-looking statements regarding expectations for future financial performance, which involve uncertainty and risk. It is possible the Company's future financial performance may differ from expectations due to a variety of factors, including, but not limited to (i) exposure to various risks related to our need for additional financing to support our debts, fund product development and fund ongoing operations; (ii) the sale of significant numbers of our shares; (iii) a volatile market price for our common stock; and (iv) our need to repay amounts due to repurchase warrants and additional investment rights. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.



For Visualant, Inc.
Hal Bringman
Desk: +1 206-299-0622 ext. 801
Mobile: +1 310-210-8011
Email:hal@nvpr.com
Skype: halbringman
or
Tina Qunell
Mobile: +1 206-919-9652
Email:tina@nvpr.com

KEYWORDS:   United States  North America  Washington

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