The Nose Knows

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For fun, engineer Ed Staples loves to take his electronic nose out for a sniff. At a restaurant, for example, his device can disclose the chemical composition of a favorite dish.


But the company he co-founded in 1995 has more serious and potentially lucrative jobs for the zNose. The device can be used to detect chemical weapons in cargo containers, improvised explosive devices in abandoned Iraqi automobiles or liquid explosives in a water bottle going through airport security.


Electronic Sensor Technology Inc.’s portable chemical vapor analyzer, which has a growing clientele in the food, industrial and environmental safety industries, is now taking aim at the homeland security market.


The Federal Aviation Administration funded some of his early research, Staples said.


“The FAA eventually decided it needed a trace detector, not something that would pick up your dirty underwear as well as chemical explosives,” he said. “But since 9/11, the threats are changing like mad, and that’s where a device that can learn and adapt has the edge.”


Despite its name, the zNose actually “hears” vapors by measuring unique sound frequencies.


At the core of the zNose is a tiny crystal that vibrates at microwave frequencies inside a sensor unit about the size of a hand-held vacuum. The sensor takes an air sample, and detects changes in the crystal’s sound wave frequency. The data is transmitted to a laptop computer where proprietary software compares the frequencies to an extensive chemical database and creates a visual image called a chromatograph of a particular odor or combination of odors and their concentration.


Give the zNose the right parameters and it can tell a food company whether a bushel of strawberries is at its peak ripeness, or if a vat of soy milk needs a little more sugar. One customer used the sensor to determine whether one of its catfish bait suppliers was skimping on quality, said David Long, associate sales director.


Company officials and longtime customers say the zNose’s gas chromatography technology is superior to others currently on the market in terms of speed, specificity and sensitivity, as well as portability. The typical field unit includes the sensor, a small auxiliary power unit and a laptop computer.



Chromatography on steroids

“The zNose is gas chromatography on steroids and really the only thing out there that gives us real-time, objective monitoring,” said project engineer Mike Marando of Woburn, Mass.-based GEI Consultants, which began using the device in 2002.


A traditional laboratory gas chromatographer using different technology and costing $100,000 can perform only 10 to 20 measurements a day, but Staples says a $30,000 zNose unit can perform up to 400 analyses. Marando says he regularly performs more than 100 measurements a day, in conditions ranging from sub-zero to sweltering. He uses it to detect coal tar at former gas manufacturing plants that his company is helping to clean up.


Northrop Grumman Corp, Lockheed Martin Corp, Kraft Foods Inc., Dow Chemical Co. and several branches of U.S. military are among past customers. In addition, the company has been providing units at no charge to a handful of military units serving in Iraq to test their effectiveness in detecting IEDs.


Staples and Chief Executive Teong Lim, both engineers, began working together at the Rockwell Science Center in the 1970s. Staples brought his background developing the crystal sensor technology for electronic devices at Texas Instruments Inc. In 1983 they formed Amerasia Technology Inc., which was funded by federal grants and specialized in sensor research. Co-developer Gary Watson, who had been involved in gas chromatogaphy research for explosive detection at XonTech Inc. in Van Nuys, joined the company in 1988.


As the zNose technology was perfected, Electronic Sensor Technology was spun off from Amerasia in 1995. The company, in Newbury Park, went public via a reverse merger in January 2005 on the Over-the-Counter Bulletin Board, where its shares trade at around 25 cents.


The company has long operated at a loss, a situation that Lim expects to turn around in 2007. The company reported a 2005 net loss of $2 million on revenue of $2.1 million, but in a recent filing said sales in the first 11 months of 2006 were well ahead of all of 2005.



Foreign markets

The company’s fastest growing markets are overseas. The product has been used in China to monitor river water quality and the government of Kuwait plans to use the device at embassies and customs facilities in the coming year, Lim said.


A major goal of the company is to drive sales by making the unit cheaper and simpler to use. Long said that while the early incarnations of the device were a geek’s dream, they provided a wealth of data too complicated for a layperson. Frank Zuhde, an associate director of marketing with a knack for programming, has since refined the software to provide simpler results.


“It has to be usable with minimal training, because in an emergency you don’t know who will have to pick it up,” Long said.


The company is working to develop a system that will sell for between $10,000 and $15,000, and Staples’ dream is to one day produce specialized cell phone-sized consumer units. That’s because the zNose has several potential home health uses, he said, noting he is working with an area non-profit group to see how well the zNose, via breath analysis, can detect lung infections in children with cystic fibrosis.


Still, the small company has a number of hurdles to overcome in gaining the type of attention and orders usually grabbed by larger contractors, such as Fairfield, Conn.-based General Electric Co. which last week announced a homeland security joint venture with Great Britain’s Smiths Group PLC.


“In detection, you basically have two markets: the Department of Homeland Security, which tends to be large contracts, and corporate, where a smaller company has more of a chance,” said David Silverberg, editor of the trade publication HSToday. “Even so, a joint venture with a larger company can be a smart route to go, even for companies as large as GE and Smiths.”


Electronic Sensor Technology did have a joint venture with a Florida firm that did not pan out, but the company is talking with other companies, Lim said. “We may not be able to compete with a GE for some contracts, but we can be strong in our niche markets.”



Electronic Sensor Technology Inc.


Core Business:

Odor analysis sensors


Employees in 2005:

15


Employees in 2006:

25


Goal:

Evolve its specialized zNose technology into versatile consumer-affordable devices for a wide variety of uses


Driving Force:

To establish vapor detection as an effective tool for addressing security and safety concerns

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