Global Photonic Energy Corporation
GPEC was incorporated on February 7, 1994 in the State of Pennsylvania to fund, develop and commercialize photonic energy conversion and storage technologies utilizing organic semiconductors for the production of electricity (i.e., converting incident light energy into electric current) based on the research of Dr. Mark E. Thompson, then a professor at Princeton University.
On September 10, 2013, GPEC incorporated in Pennsylvania a wholly-owned subsidiary, GPEC Holdings, Inc., which later formed GPEC Sub, Inc. (“GPEC Sub”). In September 2013, GPEC consummated a short-form merger, in which GPEC Sub was merged into GPEC, GPEC Sub ceased to exist and GPEC became a wholly-owned subsidiary of GPEC Holdings, Inc. The purpose of this restructuring was to prepare GPEC to be acquired by the Company.
On September 24, 2013, as a result of the Share Exchange Transaction discussed in Item 1.01, GPEC became a wholly-owned subsidiary of the Company.
BUSINESS
GPEC was founded and incorporated in February 1994 and is engaged in the development, commercialization, and licensing of advanced thin film solar technologies and intellectual property. Since then, GPEC’s sponsored research programs at Princeton University, University of Southern California (“USC”) and the University of Michigan (“Michigan”) have resulted in more than 600 issued or pending patents worldwide covering materials, architectures, and fabrication processes for organic and inorganic flexible, thin-film photovoltaic technologies. The technology is targeted at, but not limited to, certain broad applications, including (a) mobile electronic device power, (b) electric vehicle charging or “power paint,” (c) semi-transparent solar power generating windows or glazing and (d) traditional off-grid and grid-connected solar power generation. Laboratory feasibility prototypes have been developed that successfully demonstrate key building block principles for these technology application areas.
Research and License Agreements
On October 22, 1993, American Biomimetics Corporation (“ABC”) entered into a Sponsored Research Agreement and License Agreement with Princeton University for work being done in the laboratory of Dr. Mark E. Thompson. In August 1995, this original sponsored research agreement with Princeton University was assigned to USC when Dr. Thompson accepted a position at USC. In August of 1996, ABC assigned to GPEC its rights to various research inventions under the foregoing agreements. On May 1, 1998, GPEC, Princeton University and USC entered into a new Sponsored Research Agreement, which continued without interruption the research of Dr. Thompson (at USC) and added to it the research being done by Dr. Stephen R. Forrest (at Princeton University). At the same time, the parties entered into a License Agreement which they considered an amendment of the earlier license agreement. This 1998 Sponsored Research Agreement formed the basis for future renewals of this agreement in 2004, 2006 and 2009. From May 1, 2009 through June 30, 2013 GPEC paid and expensed $3,233,341 under the Research Agreement.
In 2006, the Company’s remaining principal researcher at Princeton University, Dr. Stephen R. Forrest, accepted a tenured position at the University of Michigan and became its Vice President of Research. The 2006 renewal of the Sponsored Research Agreement retained the Company’s relationship with Dr. Thompson and his team, and established USC as the lead researcher and Michigan as the subcontractor. In addition, the 1998 License Agreement was also amended in 2006 to include University of Michigan, where Dr. Forrest has been conducting research for GPEC.
Currently, research and development of GPEC’s flexible, thin-film organic photovoltaic (“OPV”) and inorganic Gallium Arsenside (“GaAs”) technologies is being conducted at USC and the University of Michigan under the five year Sponsored Research Agreement dated May 1, 2009. Under the Sponsored Research Agreement, GPEC has agreed to pay USC up to $6,338,341 for work to be performed. From May 1, 2009 through December 31, 2012 GPEC paid and expensed $2,689,570 under this agreement. During the years ended December 31, 2010, December 31, 2011 and December 31, 2012, GPEC incurred research and development costs of $463,211, $887,097 and $998,127, respectively, and patent application expenses and prosecution fees of $1,352,072, $1,587,642 and $1,345,743, respectively.
Under the current amended License Agreement with USC, Princeton and the University of Michigan, wherein GPEC has obtained the exclusive worldwide license and right to sublicense any and all intellectual property resulting from GPEC’s sponsored research agreements, GPEC has agreed to pay for all reasonable and necessary out of pocket expenses incurred in the preparation, filing, maintenance, renewal and continuation of patent applications designated by GPEC. In addition, GPEC is required to pay to USC 5% of net sales of licensed products or licensed processes used, leased or sold by GPEC, 3% of revenues received by GPEC from the sublicensing of patent rights and 23% of revenues (net of costs and expenses, including legal fees) received by GPEC from final judgments in infringement actions respecting the patent rights licensed under the agreement.
GPEC has an exclusive worldwide license and rights to sublicense any and all intellectual property conceived or developed under its sponsorship at USC, Princeton University and the University of Michigan. There is currently no ongoing research activity at Princeton University related to GPEC, although the Company maintains licensing rights to technology previously developed there.