FROM Yesterday Filing by MMTIF:
MICROMEM TECHNOLOGIES INC. MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED OCTOBER 31, 2016 PREPARED AS OF MARCH 2, 2017 (Unless other indicated dollar amounts reported are stated in U.S. dollars) 6 II. COMPANY PROFILE AT OCTOBER 31, 2016 1. Update of Product Development Activity. Chevron: The significant developments in 2016 are presented as below:
a) We began the year, in November 2015, with the nanoparticle tracer testing completed in testing facilities in Texas. To that point in time Chevron had provided cumulative financing of $1,719,712 to the project. The testing was successful in identifying, with accuracy and precision, a number of the nanoparticle tracers which were measured. We invoiced Chevron for $193,501 and received payment in Q1, 2016.
b) Our follow up discussions with Chevron continued through to late March 2016 as to the go forward steps. At that point, Chevron indicated that they wanted to pursue certain specific tracers in the go forward work as the next phase of the development project.
c) Our discussions continued through July at which point we executed an addendum to our contractual work with Chevron to complete the next round of tracer tests. An initial budget of $400,000 for this work was established and we received $200,000 of this funding in August, 2016.
d) We began working with our subcontractor to move forward with this phase of the development work. This work progressed well throughout the fall and a series of status reports were issued continuing through late December.
e) We received an additional $100,000 of funding against this work from Chevron in December.
f) In early February, 2017 this round of testing was completed and we believe that these testing results were successful.
g) Chevron is continuing to evaluate these test results. We anticipate initial commercial orders once this evaluation is completed.
h) During 2016, we engaged in discussions with a large U.S. based process control manufacturing company as a candidate to take forward the production of the ultimate commercial units. These discussions continue and are positive.
i) We have previously executed a development contract with Chevron in spring 2015 for the development of a cement integrity sensor platform. Given the Company’s cash constraints in 2016, this development initiative was not substantially pursued in 2016 and forms part of our go forward 2017 pipeline.
Castrol: The significant developments in 2016 are as presented below:
a) We invoiced and collected $250,000 from Castrol in Q1 2016. We continued our development work with our prime subcontractor through March 2016. We met with the Chevron team [ should be Castrol imo] in the UK in June 2016. The outcome of those discussions was that we agreed to move forward in the second half of 2016 with the development of the fieldable units in the immediate term and we agreed to continue the development plans for the miniaturization for automotive use as the final end product. These discussions were again confirmed in a follow-up in-person meeting in July with Castrol.
b) We worked with our subcontractor to develop an overall budget for the next phase of the miniaturization work and for the fieldable units. We invoiced Chevron [ again should be Castrol] for $100,000 relating to the fieldable unit work in late fall, this amount was paid in November, 2016.
c) We have since engaged with the Castrol’s commercialization teams and are pursuing Castrol’s marine diesel division for the fieldable units.
d) In fall, 2016, we met with a large manufacturer/marketer of process control equipment and have engaged in discussions with that group as a leading candidate to manufacture and market the eventual miniaturized end product for the automotive sector.
e) By the end of our fiscal year, we had developed with Castrol a critical path towards completion of the miniaturized product for automotive use over the course of 2017-2018. The budgets were established and our subcontractor is working with the e Company to execute this development program.
f) Late in the fiscal year, and as a direct result of our Castrol dealings on the fieldable units, we were approached by a large European energy company who has expressed a direct interest in our fieldable units; these discussion and negotiations continue.
Flextronics: The development contract that was established with Flextronics in 2014 remains in place. The Company has contracted with Flextronics to conduct specific work and is working with Flextronics to clear our outstanding account with them. It is anticipated that we will engage with Flextronics in Q2 2017 to identify the timing for the completion of the work going forward.
