UniPixel and Future Tech Execute Letter of Intent for Strategic Partnership
posted on Aug 09, 2017 08:46AM
SANTA CLARA, Calif., Aug. 9, 2017/PRNewswire/ -- UniPixel, Inc. (NASDAQ: UNXL), a provider of advanced solutions to the touchscreen and flexible electronics markets, today announced the signing of a non-binding letter of intent to enter into a strategic transaction with Future Tech, under which Future Tech will produce UniPixel's XTouch™ sensors in ChangzhouCity, Jiangsu Province in China.
Under the terms of the letter, Future Tech expects to form a joint venture that will own and operate a manufacturing facility in Changzhou, China. Future Tech will also be responsible for creating an organization to sell, market and distribute metal mesh touch screen sensors to original equipment manufacturers ("OEMs") headquartered in the Asia Pacific region. Future Tech intends to manufacture sensors for UniPixel, subject to agreement on volume and pricing. A definitive agreement is expected to be executed during September 2017.
The letter of intent provides that Future Tech will pay UniPixel up to $5.1 million for rights, know-how and manufacturing assets that will be transferred to the joint venture; $2 million will be paid at an initial closing, with the remaining amounts payable upon equipment qualification and manufacturing milestones. Future Tech will separately provide all funding necessary to establish the manufacturing facilities, acquire the necessary manufacturing equipment, operate the facility and meet required working capital needs.
Additional details of the letter provide that:
the joint venture will make royalty payments to UniPixel based on an IP license grant.
the joint venture will market the XTouch™ product in the Asia Pacificregion, including to China-based mobile and computer OEM companies where Future Tech maintains existing relationships.
UniPixel will continue to manufacture and conduct research and development for new products in Colorado Springs and will also purchase sensors from Future Tech, thereby expanding the manufacturing footprint for XTouch™ and the sensor supply to meet UniPixel's customer's demand.
UniPixel will contribute know-how and training to the joint venture and also grant licenses to its IP.
Jeff Hawthorne, president and chief executive officer of UniPixel, commented, "We are very pleased to enter into a letter of intent for this strategic partnership with Future Tech. We are confident that Future Tech brings significant resources, relationships and capabilities, and the wherewithal to be a highly effective manufacturing and marketing partner."
"I have long held the view that UniPixel should conduct manufacturing in Asia so that our products are closer to our customers," continued Mr. Hawthorne. "This partnership will allow us to deliver products more quickly, eliminate freight cost arising with shipment from Colorado Springs to Asia, and give us a greater exposure to potential customers in Asia as well as capturing the lower cost benefits of Asia-based manufacturing. While our customers include many U.S. headquartered major computer companies, they all have their display modules assembled in Asia."
"We are excited to undertake this opportunity to partner with UniPixel," said Mr. Caixing Xie, president of Future Tech. "Combining Future Tech's resources, contacts and low cost manufacturing capabilities with UniPixel's technologies will allow XTouch™ to reach the significant potential that we all believe exists for UniPixel's metal mesh sensor technologies."
The Benchmark Company, LLC is acting as the Company's Financial Advisor on the proposed strategic relationship.
About Future Tech
Future Tech is a technology company with manufacturing and related assets in Changzhou City, Jiangsu Province, China.
About UniPixel
UniPixel, Inc. (NASDAQ: UNXL) develops and markets high performance metal mesh capacitive touch sensors for the touchscreen and flexible displays markets. The Company's roll-to-roll electronics manufacturing process patterns fine line conductive elements on thin films. The company markets its technologies for touch panel sensor, cover glass replacement, and protective cover film applications under the XTouch™ and Diamond Guard™ brands. For further information, visit www.unipixel.com.
