Uni-Pixel Inc (fka UNXLQ)

[aldo]

Jeffrey A. Hawthorne
Now let me update you on the memorandum of understanding with GIS. On January 18, 2017, we executed an MOU with GIS for a strategic partnership to include contract manufacturing, sublicensing royalties and a payment for access to our factory for training and know-how to enable GIS to produce metal mesh touch sensors. While we expected the definitive agreement to be signed by March, GIS has not executed the agreement and appears to be focused on trying to improve their short term ROI. We believe that this relationship would be advantageous for both parties in the near term, as outlined in the MOU. And we expect it will be even more advantageous in the longer term as metal mesh market continues to expand. We will not chase this agreement and we will not negotiate down the financial terms. We expect the terms to be equitable for both parties. We have provided all the data requested by GIS and the ball is now in their court. The MOU is still open and expires on April 15, 2017, if a definitive agreement is not signed. The MOU can be extended or terminated by mutual agreement. Separately, GIS continues to be a valued customer.

We believe that having a Asia-based manufacturing partner is strategically important to support UniPixel's future growth. The MOU with GIS is nonexclusive and we have been conducting discussions with another touch panel manufacturer based in China that is interested in a strategic manufacturing partnership. This touch panel manufacturer is a current customer and is a supplier to major U.S. computer and communication companies. They also have access to the large China white box market. I have had initial discussions with their CEO and we're working on a proposal.

Jeffrey A. Hawthorne

Yes, Brian. I mean, we -- they have told us they still like the technology. In fact, GIS is a current customer on one of our design wins. So they're very familiar with the technology. They're integrating one of our metal mesh touch sensors into a touch module. So from that perspective, I think there's been no change there. We do believe it's purely a financial, ROI-driven position that they're taking at this point. And we feel that given the terms of the MOU which took 7 months to come to agreement with them on, that they are more than equitable terms for both parties.

So at this point, we're letting them think about it. We've given them, I think, all the information that will help them make their decision and we'll see where it goes from there. And as I've said, in the meantime, this is not exclusive. We have been in discussions with other module makers and one in particular who is also a current customer that is interested in a strategic manufacturing partnership as well. And I think the thing that I'm encouraged about that one is, in this case, it's CEO-to-CEO discussions. And so if we do get to an agreement that makes sense for both parties, it could move relatively quickly

Jeffrey A. Hawthorne

Yes, Brian. I mean, we -- they have told us they still like the technology. In fact, GIS is a current customer on one of our design wins. So they're very familiar with the technology. They're integrating one of our metal mesh touch sensors into a touch module. So from that perspective, I think there's been no change there. We do believe it's purely a financial, ROI-driven position that they're taking at this point. And we feel that given the terms of the MOU which took 7 months to come to agreement with them on, that they are more than equitable terms for both parties.

So at this point, we're letting them think about it. We've given them, I think, all the information that will help them make their decision and we'll see where it goes from there. And as I've said, in the meantime, this is not exclusive. We have been in discussions with other module makers and one in particular who is also a current customer that is interested in a strategic manufacturing partnership as well. And I think the thing that I'm encouraged about that one is, in this case, it's CEO-to-CEO discussions. And so if we do get to an agreement that makes sense for both parties, it could move relatively quickly

https://seekingalpha.com/article/4059304-uni-pixels-unxl-ceo-jeffrey-hawthorne-q4-2016-results-earnings-call-transcript?page=1