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It isn't from the internet. I did an exhaustive search using multiple engines. If it is real, it is an internal document. Even if it is real, it wasn't released as stated so something obviously changed.
I'm skeptical, not just of the release in the post, but of everything given the history.
UHP Headquarters: 526 Commerce Circle, Suite 120 Mesquite, NV 89027 Try and find office space. I cannot. Is there anything more than a PO Box? Zoom in on the map view and it shows building numbers. This appears to be a local U-Haul dealer using the building. You can click on different building and check the photos too. It calls this headquarters on the UHP website. And this so-called "company" is going to compete with J&J Surgicell and Phizer Oxycel among others? No wonder there have never been any sales.
Drugman, you are either immensely resourceful to obtain that document or quite the hoax player. I can find no link.
I suppose checking the history of SAPX filings will tell the story. It the company has played it straight up, the people expressing great confidence will come out of this with a huge windfall. If there is history of BS, it will be a little boy who cried wolf scenario and not much more than a sputter will ensue.
Kurt, I'll only answer this question when you list "both" or "all the above" as choices. And "excessively" or "extraordinarily much" as a quantifier.
How dumb or dishonest do you have to still be pretending there is a relationship between QMC and Pasaca...
LMAO+++
Utter nonsensical bullshit. 🚽Hemoshit🍭 marketed over a decade ago and is always a dismal failure at every level. This totally failed FDA scrutiny and approval years ago:
https://www.otcmarkets.com/filing/html?id=12414685&guid=4td-kaJ6H_M4B3h#UEEC_EX991_HTM.
The POS band aid could not even sell over the counter with the degenerate con men running the company defrauding shareholders about having a market:
https://www.sec.gov/files/litigation/complaints/2022/comp25413.pdf.
There isn't any evidence this so called company is anything more than an internet boiler room Ponzi Scheme. Here was the head of the con game 11 years ago telling people what would happen in 2014, a cool decade ago: What happened? Nothing as always...one bullshit bait & switch PR after another with nothing more than internet con men hyping it,
Regurgitate the 🚽bait_&_switch🍭 contracts, deals, and partnerships
https://seekingalpha.com/article/4300303-united-health-products-press-releases-cannot-be-taken-face-value
"So let’s do the math"
CHARLIESAN
Re: rodman post# 12756
Tuesday, December 19, 2023 12:11:04 PM
Post # 12757 of 13297
Yes, I am a loser; about 800K in this position; and I own a significant amount of shares; in the 7 digits. You must be braindead to think that this CEO and management team do not deserve criticism in their inability to get a PMA filed. They need prodded; pushed; criticized; by any means necessary to accomplish
their duties. So you will stand by another year and watch paint dry? Their communication and actions are a travesty and reek of incompetence. Calling it like it is. If you cannot see this you might look in the mirror before denigrating others.
"So let’s do the math
You buy now at .20 biggest downside is .20
You don’t own any shares.. You put $3000-$5000 into UEEC worse case scenario you lost a few bucks…
FDA approval comes in and you’re looking at 3000-5000% profit easily…
Agree???
I would say it’s a no brainer
Disclosure I’ve been adding to my position on dips"
It already failed FDA approval: https://www.otcmarkets.com/filing/html?id=12414685&guid=4td-kaJ6H_M4B3h#UEEC_EX991_HTM
"FDA Selects HemoStyp ® for CtQ Pilot Program
Henderson, Nevada – December 4, 2017 –United Health Products, Inc. (UHP) (OTC: UEEC), manufacturer and marketer of HemoStyp®, a patented hemostatic gauze for the healthcare and wound care sectors, today announced that it is proceeding with its application for HemoStyp under the FDA’s new and innovative CtQ Pilot Program. The FDA selected UHP’s HemoStyp as only one of nine participants for the program. UHP management has scheduled its first face-to-face meeting with FDA experts for January 17, 2018 to provide the agency with whatever information it needs to advance the application for premarket approval (PMA).
The FDA has stated that it intends to work collaboratively with pilot program participants during the review of their PMA submission to define characteristics of the device that are critical to product quality, and how these characteristics are controlled in design and manufacturing prior to the postmarket inspection. For pilot program participants, the FDA would forego conducting the standard PMA preapproval inspection, and a postmarket inspection focusing on the PMA applicant’s implementation of the critical to quality characteristics would be conducted instead.
The CtQ Pilot Program was created to identify products that have a chemical makeup of demonstrated safe interaction with the body –as evidenced by years of prior product usage and studies-- to be approved for Class III internal surgical use. The program’s intent is to allow products that have demonstrated repeated safe interaction to enter the market in a more efficient manner. This application will run simultaneously with the company’s prior Class II application for expanded indication. The market for 2017 internal surgical market for hemostatic products is estimated at in excess of seven billion dollars, and is expected to grow at 7.1% over the next few years, to reach more than $8.3 billion by 2022. (http://industryarc.com/Report/15189/hemostats-market.html)
Concurrent with its CtQ Pilot Program participation, UHP reaffirms that its current Class II application – Expanded Indication submission with the US FDA-- continues to progress, and is in an advanced stage of review
About Premarket Approval Application Critical to Quality (PMA CtQ) Pilot Program
Top-quality medical devices help the FDA better protect and promote public health. And one of the top priorities for FDA’s medical devices center is a focus on quality.
More specifically, the FDA is working with stakeholders—industry, health care providers, patients, payers, and investors—to build a strong Case for Quality.
This program allows the FDA to identify device manufacturers that consistently produce high-quality devices. By doing so, we can better focus our resources helping other manufacturers raise their level of quality. This program also helps the FDA identify and promote practices that support consistent quality manufacturing, and align our regulatory, enforcement, compliance approaches with those practices.
The FDA launched the Case for Quality in 2011 following an in-depth review of device quality data and feedback from both FDA and industry stakeholders. The FDA’s analysis flagged certain widespread or common manufacturing risks that impact product quality. The review also showed manufacturers that focus on and manage those risks often become more productive, receiving fewer complaints, needing to open fewer CAPAs and investigations, and having lower quality-related product costs than their competitors.
In simple terms, the review identified that an investment in quality has long-term payoffs."
Those are the insiders unloading at this unrealistically high price. There is nothing but a sham product that has failed at every level, no revenues, and no functional business.
There are only PONZI SCHEME OPERATORS!!! on this board so ignore common sense!!
Fixed it for you/
Regurgitate the same bullshit; call it new. What's changed?
News is spreading...https://seekingalpha.com/article/4300303-united-health-products-press-releases-cannot-be-taken-face-value
United Health Products' Press Releases Cannot Be Taken At Face Value
Oct. 30, 2019 10:00 AM ETUnited Health Products, Inc. (UEEC)9 Comments
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White Diamond Research
2.52K Followers
Summary
United Health Products releases many positive PRs with claims that never happen and doesn’t report negative news.
We found many of UEEC's reported distribution deals didn't materialize, and one distribution company doesn't even appear to exist.
We failed to find any UEEC FDA Class II or Class III approvals, despite the company's investor relations saying otherwise.
UEEC’s October 18th announcement of positive clinical results omitted critical safety outcomes, suggesting its PMA marketing application will be denied.
On December 31, 2019, the CEO will be granted 15% of the outstanding shares for no performance reason.
United Health Products (OTCPK:UEEC) is a $200M market cap company trading on the pink sheets, with only one product, its HemoStyp gauze. HemoStyp is an ordinary wound gauze, manufactured in China, and a commercial flop. Sales are miniscule, with $46K in revenues for 2018 and $25K in revenues through the first half of 2019. We published an article on 8/27/19 telling about the history of the company and HemoStyp, and how absurd the company’s valuation is.
In this follow-up report, we took a look at past press releases ("PRs") from the company claiming they have business dealings and contracts with various distributors and medical device vendors. Many of these business dealings appear to have never come to fruition, and even at least one of the companies doesn’t appear to exist. Looking at the past seven years of the company’s PR history, we have not seen a single negative or even neutral statement updating shareholders on its endeavors. This is despite clearly having so many distribution partnership and FDA setbacks. We show our research on UEEC’s PRs in this report.
We also have some outside validation that we are on the right track with our findings on UEEC. Someone who used to work with the company, who requested anonymity, contacted us on LinkedIn after we published our previous article and stated (emphasis ours):
Source: LinkedIn Message
A statement that strongly motivated us to do a deeper dive into UEEC.
A Deep Dive Into United Health Products Shows Many Questionable Press Releases
A look into UEEC's PRs shows that many are distribution deals that didn't materialize and FDA submissions with no follow-up news.
The source that we quoted earlier had some really negative, and shocking, things to say about UEEC and its CEO, Douglas Beplate. Here’s what he told us over the phone:
This is my industry. United Health Products was a mistake to work with, but it’s part of what made me successful, I learn from my mistakes.
This is a BS company. There’s no truth to it, the product’s shady. Doug Beplate is a master fibber. He puts out PRs to pump his stock up. Nothing is going to happen, they aren’t doing anything. This is all a shell game. The $25K in quarterly revenues could be a money shuffle. I’ve showed it to doctors myself, nobody uses it
It’s easy for me to sit in a basement in a bunker in Utah, see what other companies who are successful put out in PRs, and just do the same thing for my company. That takes zero capital. And that’s what he does, he puts in whatever sounds good in the press. There’s a lot of hoopla with PRs, but as far as real revenue on the books, there’s nothing there. Other companies have medical journals, links to the data, etc., but there’s nothing for United Health Products.
They are never going to get Class III approval. That is complete BS. Because you have to spend the money to do the research to get the Class III approval. Class III is placing it into the body cavity. And everyone I’ve talked to said “there’s no way”. You can put it into a body cavity, like a deep wound, and sew it up. But you can’t do that with this product. It’s not indicated for that, it doesn’t have an indication for anything, it’s a wound gauze, that’s it, it’s a gel infused mesh. I’ll be honest with you, the docs at San Antonio told me, that based on the advertised blood stopping ability of HemoStyp, you can get the same results from taking a T-shirt and putting it on the wound and holding pressure to it. There’s nothing special about this product.
Of course, the above statement is just one person’s point of view about UEEC and its CEO who had a bad experience working with the company. But our research has shown us that, for the most part, what this anonymous source has told us is true. Here are some questions that arose from our research that we would like to ask United Health Products:
On 1/21/16 and 5/16/16, UEEC issued PRs stating that it made a distribution agreement with a company named Optimal Government Resources/Services to sell HemoStyp to the US government. Our research shows that “Optimal Government Resources/Services” does not appear to exist (evidence shown in the next section). Can UEEC show any evidence that this company exists or ever did? Also, we did a simple Google search and found that the DAPA contract number UEEC says is theirs actually belongs to another medical product company, TrillaMed (evidence shown in the next section). How does UEEC explain this?
2. UEEC reported on 10/10/17 that its “Expanded Indication Submission Class II application continues to progress” for HemoStyp. In this same PR, UEEC reported,
the company is pleased to announce that it has applied to the FDA’s new and innovative CtQ Pilot Program premarket approval "PMA" (Class III internal usage) for HemoStyp.
This PR was over two years ago, and there hasn’t been any follow-up on the results of the applications. How did the FDA respond to either application? Were they rejected? We submitted a request to the FDA and will update when we hear back.
3. UEEC reported on 12/12/17 that it’s:
applying to have HemoStyp designated as a Class III medical device with Australia’s Therapeutics Goods Administration ("TGA", counterpart to the US FDA).
The PR further stated:
The company’s Australian TGA consultants believe that UHP has the requisite test data and documentation to obtain rapid approval in Australia, and that HemoStyp could obtain approval for use in the Australian market within 30 days.
This Australia TGA application was also mentioned in the 2017 10-K. There has been no follow-up to this PR. It has been almost two years, despite the PR saying approval could happen within 30 days. Did the TGA respond to or reject this application? Why did the consultants believe UEEC had enough data for approval? There is no mention of any revenues in Australia in UEEC’s quarterly or annual reports.
4. What happened to the 5-year contract with Total Resources International ("TRI"), where UEEC stated in a PR on 3/17/15 that sales generated will be a minimum of $3M in year one and expected to gross over $20M in during the life of the contract?
UEEC reported sales were $53.3K in 2015, $242K in 2016, $646K in 2017, $46K in 2018 and so far $25K in the first half of 2019. Nowhere near the “expected $20M” over five years.
5. What happened to HemoStyp sales on henryschein.com and the Australian Henry Schein catalogue? UEEC claimed to have signed an agreement with Henry Schein on 8/24/15 here, and Henry Schein Halas on 5/2/16 here to sell HemoStyp. HemoStyp isn’t listed on either online catalogue. We called up Henry Schein, and they said they have never had a contract with UEEC to sell HemoStyp.
6. On 7/9/18, UEEC issued a PR stating:
UEEC today announced that it has been accepted as a Walmart.com and Jet.com supplier, and will offer three HemoStyp wound care products for online retail sale.
Doing a search on Walmart.com and Jet.com, we found that HemoStyp isn’t sold on either website. Why is this? Was the company’s supplier status revoked? We emailed Walmart.com (WMT), and the company replied that indeed they do not sell HemoStyp.
7. On 10/25/18, UEEC announced it hired Societe Generale (OTCPK:SCGLF) to advise the company on strategic alternatives. It states:
In connection with the FDA PMA Class III approval process for HemoStyp, UHP has been contacted by several medical technology companies that are active in the surgical equipment and hemostatic products sectors, and who have expressed an interest in the Company's products and business strategy.
This PR was over one year ago now. UEEC is not a complicated company with only one simple gauze product, so it shouldn’t take this long. UEEC still mentions the possibility of an acquisition or strategic partnership in PRs.
In a recent PR on 10/17/19, it states:
in anticipation of a successful FDA Class III PMA application approval, the potential acquisition of the Company or a strategic partnership.
In a PR released the next day, on 10/18/19, it again states:
UHP is continuing its discussions with well positioned candidates interested in acquisition of the Company or partnerships
We would like UEEC to show evidence that this is a true statement. Which medical technology companies have shown interest? Why has it taken over a year of discussions and still there have been no updates on a collaboration or merger? What exactly is the company still “discussing” with suitors after over a year of discussions?
Why would UEEC be acquired at this current valuation given that present HemoStyp sales are miniscule and the probability of FDA approval is low? We think any acquisition talks the company is in aren't serious and there won't be any merger or acquisition.
8. On 4/7/15, UEEC issued a PR stating:
United Health Products, Inc. (OTCPK:UEEC) has received the final laboratory test results and pathology reports for recent porcine testing.
Douglas Beplate, CEO said, "The results are remarkable in that they not only show that HemoStyp® is effective at rapid hemostasis in a wound site, but prove it is totally absorbable into the body." He added, "In my opinion HemoStyp® promotes vascular genesis and healing.”
The tests reports were furnished to the U.S. Military will be posted for viewing on the United Health Products Inc. website.”
But the study was never posted on UEEC’s website. If this swine study was favorable and submitted to the US Military, it should have been published. There would be no reason to hide favorable results from the study which UEEC supposedly had done. Why didn’t UEEC publish the results like the PR said it would?
These 8 questions are just some that we have. Further digging would certainly lead to more.
More Details On The Press Release Questions
In this section, we go into more detail on two of our questions, questions #1 and #2. If needed, look back at the previous section for a summary of each question.
Question #1
For question #1, we did more digging on what we believe to be a fictional company, Optimal Government Services/Resources. In UEEC’s PR on 5/16/16, it states:
Optimal Government Resources has signed their distribution agreement and placed an opening stocking order. In conjunction with this agreement, UHP HemoStyp® products are now listed under the DAPA contract #SP0200-09-H-0037.
Doing a simple Google search for this DAPA (Distribution and Pricing Agreement) contract number, we found it belongs to a contract by another medical product company, TrillaMed. This page shows a newsletter from TrillaMed, and at the bottom, it shows:
Source: TrillaMed Newsletter
We underlined the exact same DAPA contract number in UEEC’s PR, but it belongs to TrillaMed.
Our research showed us that each DAPA number is unique to each company specifically. It’s not unique to a larger contract that multiple companies can pile on, because every company has their specific number. Therefore, either TrillaMed has the number wrong, or UEEC has it wrong. There is no news anywhere, from UEEC or TrillaMed, that these companies have ever worked together or that TrillaMed was distributing HemoStyp for UEEC. We have contacted TrillaMed and will update when we hear back.
Doing a Google search for both Optimal Government Services and Optimal Government Resources, we found no evidence anywhere that there exists a company by either name. This webpage shows a company with a similar name that does government contracts for medical products. We called up the company and they said the name of their company isn't "Optimal Government Services/Resources", but just "Optimal" or "Golden Max". And of course, the company has a website, which UEEC didn't include in their PR.
To do business with the Federal Government, a company must have an active registration with the System for Award Management (SAM). We searched for Optimal Government Services and Optimal Government Resources on sam.gov, and neither one has a registration there. Screenshot shown below:
Source: sam.gov
Question #2
In regards to question #2 about the 10/10/17 PR on the FDA marketing applications, UEEC had some follow-up PRs.
On 12/4/17, UEEC issued a PR stating:
it is proceeding with its application for HemoStyp under the FDA’s new and innovative CtQ Pilot Program. The FDA selected UHP’s HemoStyp as only one of nine participants for the program.
Concurrent with its CtQ Pilot Program participation, UHP reaffirms that its current Class II application – Expanded Indication submission with the US FDA-- continues to progress, and is in an advanced stage of review
On 2/5/18, UEEC issued a PR stating:
United Health Products, Inc. (UHP) (OTC:OTCPK:UEEC) today announced that, following its January 17 face-to- face meeting with FDA experts and officials, it has completed and submitted all materials relevant for the premarket approval (PMA) for HemoStyp. UHP has submitted additional inspection and registration forms to the CtQ Pilot program for final approval and confirmation. The PMA submission is for the approval of Class III indication and internal surgical use of Hemostyp.
The latter PR was over a year and a half ago, and UEEC has still not announced PMA approval for HemoStyp. Why have there not been any updates to this FDA meeting?
United Health Products Investor Relations Rep Gave Us More False Info
To figure out what’s going on with UEEC and these questionable PRs, we called up the company’s investor relations rep. Unfortunately, he didn’t appear to play it straight with us and gave more false info.
First, we tried calling the company, and it goes to a voicemail that doesn’t even mention the company's name. We left a message anyways to try and speak with Doug Beplate to try and find the answers. Then, we called the investor relations firm, Pan Consultants, and spoke with Phillipe Niemitz.
We believe multiple comments by Niemitz, specifically two comments regarding FDA approval for HemoStyp, are not true. We checked the 510K database on the FDA website here. We did a search for “HemoStyp”, “United Health”, and “UHP”, and we didn’t find any device approval on those names. Looking at its press release history, UEEC has never released a PR claiming that they have received FDA approval for any indication.
See the full IR interview transcript here.
HemoStyp Is A Commercial Flop
As everyone who has read UEEC’s financial statements knows, its HemoStyp gauze is a commercial flop. The company has only generated $46K in revenue in 2018. In the first two quarters of 2019, it has only generated $25K in revenue so far. Despite poor commercial performance, the CEO is on track to receive a stock bonus that will be worth in the $10s of million if the Company manages to keep the stock price up till the end of the year. This CEO bonus is stated in the company's latest 10-K.
United Health Product’s PRs Describing Its HemoStyp PMA Application Process Are Bizarre, Suggesting A Denial Is Likely
UEEC’s announcement of the PMA submission was released on 10/4/19 stating:
UEEC today announced that it has submitted a Premarket Approval (PMA) application for Class III approval to the FDA for HemoStyp.
This was seemingly very significant news about an important milestone concluding clinical study data analysis and submission. The text of the announcement was, however, very generic and reserved. It further states:
The PMA program confirms the safety and efficacy of a product. If approved, UHP expects that HemoStyp will be authorized for use in surgical procedures in abdominal, cardiovascular, thoracic and vascular surgeries per UHP's PMA filed Instructions For Use.
This October 4th PR mentions nothing about the results of the clinical studies, simply noting that the FDA submission has occurred.
A pre-market application (PMA) application is a very detailed and stringent process. As described in drugwatch.com, the PMA includes:
Source: drugwatch.com
Therefore, the October 4th PMA submission should have included clinical data, including a statistical analysis of its results.
Then, on 10/18/19, a relevant, yet bizarre, PR was announced, claiming positive results of the HemoStyp clinical study. We are puzzled because this announcement comes two weeks after the PMA submission on 10/4/19.
The PR says the final analysis report has been received, and it is from an independent reviewer (does “independent” mean that UEEC didn't pay for this analysis?). It further states:
In summary the independent statistical reviewer (website here) stated:
“For the primary analysis comparing HemoStyp versus Surgicel for hemostasis in 10 minutes, both non-inferiority and superiority were satisfied in both ITT population and PP population. For the secondary analysis, HemoStyp was significantly better than Surgicel with respect to the percentage achieving hemostasis at 2 minutes, 5 minutes, and 10 minutes.”
It further states:
UEEC... today announced that it has received the final report from an independent review of the results of its human clinical trial.
The way the above sentence is worded, it seems as though UEEC had just received the statistical results on October 18 or a day before. It doesn't say that this report was received and sent to the FDA 2 weeks earlier on October 4th. But if it was in fact sent to the FDA in tandem with the October 4th submission, then it is strangely communicated.
Why would they do the analysis after they already sent the application? There is such a thing as a PMA Amendment if the applicant is revising existing information or providing additional information. But UEEC didn’t say that they were doing a PMA Amendment. It is sometimes required to continue statistical analysis after the PMA submission if the clinical study is continuing and the longer patient follow-up is recorded. But according to the UEEC protocol, the follow-up was 30 days and that was finished long ago.
Because this “independent” statistical reviewer apparently gave its analysis after UEEC already submitted its application to the FDA, we would take it with a grain of salt. If it were a relevant review, it should have been included in the PMA application on October 4th. If this analysis was not included, we also wonder then what analysis was included and why the results of that analysis were not mentioned in the PR from October 4th.
But what is the most alarming to us in the 10/18/19 announcement is that the PR went silent on the very important product safety outcomes. From the UEEC clinical protocol, described on its clinicaltrials.gov page we learned about four secondary study outcomes:
Source: clinicaltrials.gov
While the Primary outcome and the Secondary outcome #1 in the UEEC study protocol are efficacy related, the Secondary #2, #3, and #4 outcomes are all safety outcomes and are of critical importance for FDA approval. The October 18th PR only addresses success of the Primary outcome and Secondary outcome #1. The PR didn't say if the study has shown a non-inferiority or superiority of HemoStyp vs Surgicel in the secondary outcomes #2-4. The history of UEEC only disclosing positive news makes us believe that the omission of results relevant to outcomes #2-4 could have been on purpose, because the clinical study likely showed the inferior performance of HemoStyp vs Surgicel in these outcome measures.
The statistician was very specific to claim non-inferiority and superiority of HemoStyp only in the initial hemostasis after application of HemoStyp to the wound. It is silent on what has happened after the initial hemostasis was achieved.
HemoStyp, according to UEEC, quickly dissolves in an aqueous environment due to its unique degradation properties. We can find this on the company’s website.
From UEEC’s product testing page:
The data obtained during analysis of sample UHP Box of 2” x 2” Pouches indicates the material begins to dissolve in water within one minute. The sample is completely dissolved within 24 hours. Not enough material remains for analysis at the 24 hour time point.
If HemoStyp dissolves too soon, the surgical wound would start bleeding again, and this would be a very serious safety issue.
Imagine a major disaster when bleeding re-occurs after the surgeon has already closed the outmost patient skin layer! The outcomes 2-4 directly address this key safety concern, describing in quantitative terms how well the initially achieved hemostasis is maintained during the surgery. Outcome 4 is about the failure of initial hemostasis, as measured in reoperations, during the one month after surgery. It seems to us that a hemostatic agent that is quick to achieve initial hemostasis, but rapidly dissolves and may frequently fail later resulting in recurrence of bleeding, is a major health hazard. Why would the FDA approve HemoStyp, if it indeed fails to maintain hemostasis, knowing that Surgicel is already a reasonably effective and safe FDA approved product?
From all these observations, we conclude that the clinical study of HemoStyp versus Surgicel was likely a failure. However, if and when its PMA application gets rejected, we doubt that shareholders will hear about it. We expect it will be just like when UEEC applied for PMA approval for Class III in late 2017, there will just not be any updates, like it never happened.
On New Year's Eve, The CEO Will Be Granted 15% Of The Outstanding Shares For No Performance Reason
In the latest 10-Q, it states:
The Company, by board resolution, approved an executive compensation stock bonus package for Mr. Beplate such that upon the sale of all or substantially all of the assets of the Company or other change in control or merger transaction in which the Company is involved, or in the event that no such transaction occurs by December 31, 2019, Mr. Beplate shall receive an amount equal to 15% post issuance of the then outstanding shares of the Company's common stock on a fully diluted basis.
In a nutshell, what the above passage says is if the company gets acquired, or it doesn’t get acquired, UEEC’s CEO, Douglas Beplate, will be awarded an amount of shares equal to 15% of the outstanding shares of UEEC.
So, whether Beplate performs well and gets the company acquired, or performs poorly, he still gets gifted all those shares. Which if the company has a $200M market cap, the shares are worth about $30M. We don’t believe he did anything to deserve this kind of a bonus. And to make matters worse for shareholders, there isn’t any kind of lockup period mentioned. Therefore, Beplate can immediately sell as many shares as he wants in the open market. This will be an egregious New Year's Eve gift to the CEO at shareholders' expense.
We believe shareholders should be very worried about this transaction. The company hasn’t accomplished anything to this date. It’s generating revenues of about $50K per year. Yet, Beplate is receiving a bonus this year that a CEO of a blue chip company would be envious of.
Conclusion
In this report, we began by quoting a disturbing interview with a source who used to work for United Health Products. He claimed the CEO Beplate is a “master fibber”, and that there is nothing going on with UEEC, it’s just a “shell game”. We included many PRs the company put out over the past few years stating that they had distribution agreements and marketing applications that didn’t appear to go anywhere, including PMA submissions for HemoStyp Class III approval. But the company never issued a PR claiming a distribution agreement fell through or a marketing application was denied. It was like they never happened, and the company just put out additional PRs that again turned out to be nothing. What does the company have to show today for all these PRs? A miniscule $50K of revenues per year. To add insult to injury to shareholders, the board agreed to reward Beplate for all these failures with a bonus of 15% of the outstanding shares.
Right now, shareholders are putting all their hopes on PMA approval happening for a Class III indication. We believe the PMA application likely be denied by the FDA, and since the company’s current sales are almost zero, that would make the company worth close to zero.
We included our observations in this report on why we believe the PMA application will get denied. There was a bizarre PR of an independent analysis of the study that was released weeks after the PMA application was submitted to the FDA, when an analysis should’ve been included in the application. Neither the complete study results nor a complete analysis have been posted anywhere. Furthermore, three of the four secondary outcomes, related to product safety, were omitted in the quote. From the nature of HemoStyp, we speculate that it may dissolve before the internal wound has healed, which could result in a renewed bleeding. If this is true about the HemoStyp product, we think the FDA will deny PMA approval.
Everything is on the (fraudulent) up and up here. LMAO
"FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section IO(b) and Rule 10b-5 Thereunder
(UHP and Beplate)
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section I0(b) and Rules IOb-S(a) and (c) Thereunder
(Schiliro)
THIRD CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act Section lO(b) and Rule 10b-5(b)
(Schiliro)
FOURTH CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(All Defendants)
FIFTH CLAIM FOR RELIEF
Violations of Exchange Act Section 13(a), 13(b)(2)(A) and 13(b)(2)(B)
of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 Thereunder
(UHP)
SIXTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Exchange Act Section 13(a),
13(b)(2)(A), 13(b)2)B), and Rules 12b-20, 13a-1 and 13a-13
(Beplate and Schiliro)
SEVENTH CLAIM FOR RELIEF
Violation of Section 13(b)(5) of the Exchange Act and Exchange Act Rule 13b2-1
(Beplate and Schiliro)
EIGHTH CLAIM FOR RELIEF
Violations of Exchange Act Section 13(a) and Rule 13a-14 Thereunder
(Beplate)
NINTH CLAIM FOR RELIEF
Violations of Rule 13b2-2 of the Exchange Act
(Beplate and Schiliro)
TENTH CLAIM FOR RELIEF
Violations of Sarbanes-Oxley Act Section 304(a)
(Beplate)
ELEVENTH CLAIM FOR RELIEF
Violations of Exchange Act Section 16(a) and Rule 16a-3 Thereunder
(Beplate)
https://www.sec.gov/files/litigation/complaints/2022/comp25413.pdf" rel="nofollow" target="_blank" >https://www.sec.gov/files/litigation/complaints/2022/comp25413.pdf[tag]
https://www.sec.gov/files/litigation/complaints/2022/comp25413.pdf[/tag]
Lamstein, keep telling us how amazing these QMC scientists are. Solar cells. lighting. industry disrupting displays, anti-counterfeit, blockchain, What is the new medical bullshit?
Lamstein check this out; https://www.sec.gov/Archives/edgar/data/1403570/000101376214001117/form10k.htm
Keep on bullshitting in the boiler room
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2014
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ___
Commission File Number: 0-52956
QUANTUM MATERIALS CORP.
(Exact name of Registrant as specified in its charter)
Nevada 20-8195578
(State of jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
3055 Hunter Road, San Marcos, TX 78666
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (214) 701-8779
(Former address of principal executive offices, if changed since last report) (Zip Code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: Common Stock, $.001 Par Value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes [ ] No [X]
Check whether the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X . No ___.
Indicate by check mark whether the Registrant has submitted electronically and posted on it’s corporate Web site, if any, every Interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ].
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the Exchange Act: smaller reporting company [X].
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes [ ] No [X]
As of December 31, 2013, of the 198,875,204 outstanding shares of Common Stock, the number of shares held by non-affiliates was approximately 161,000,000 shares with a market value of approximately $8,050,000 based upon a last sale for our Common Stock of $.05 as of the close of business on December 31, 2013.
As of September 17, 2014, the issuer had 257,459,909 shares of common stock, $0.001 par value per share outstanding.
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FORWARD-LOOKING STATEMENTS
Some of the statements under this Form 10-K contain forward-looking statements. All statements other than statements of historical facts contained in this Form 10-K, including statements regarding our plans, objectives, goals, strategies, future events, capital expenditures, future results, our competitive strengths, our business strategy and the trends in our industry are forward-looking statements. The words “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “appear,” “forecast,” “future,” “likely,” “probably,” “suggest” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements.
Forward-looking statements reflect only our current expectations. We may not update these forward-looking statements, even though our situation may change in the future. In any forward-looking statement, where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements due to a number of uncertainties, many of which are unforeseen, including, without limitation:
• we are a development stage company with no history of profitable operations;
• we will need additional capital to finance our business;
• our products may not gain market acceptance;
• we need to purchase microreactors to produce quantum dots on a larger scale; we need to establish distribution relationships and channels and strategic alliances for market penetration and revenue growth;
• competition within our industry;
• the availability of additional capital on terms acceptable to us.
In addition, you should refer to the “Risk Factors” section of this Form 10-K for a discussion of other factors that may cause our actual results to differ materially from those implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-K will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, if at all. Accordingly, you should not place undue reliance on these forward-looking statements.
We qualify all the forward-looking statements contained in this Form 10-K by the foregoing cautionary statements.
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PART I
Item 1. Business
Introduction
Quantum Materials Corp. (OTC:QTMM) (“QMC”) is a nanotechnology company specializing in the design, development, production and supply of Nanomaterials including Quantum Dots and tetrapod quantum dots (“TQDs”), a high performance variant of quantum dots, for a range of applications in the life sciences, optoelectronics, photovoltaics, lighting, security ink and sensor sectors of the market. QMC owns 100% of Solterra Renewable Technologies, Inc. (“Solterra”), an operating subsidiary that is focused on the photovoltaic (solar cell) market. For convenience, the term “Company” is used to refer to both QMC and Solterra unless the context otherwise requires.
Nanoparticle are materials with features in the nanoscale, which features can be beneficial in a number of applications. Quantum dots are atomic crystals, tiny nanoparticles which can operate as up converters or down converters, emitting either photons or electrons when excited. The color of light emitted varies depending on the size of the quantum dot so that photonic emissions can be tuned by the creation of quantum dots of different sizes. Their unique properties as highly efficient, next generation semiconductors have led to the use of quantum dots in a range of electronic and other applications, including in the biomedical, display and lighting industries. Quantum dots also have applications in solar cells, where their characteristics enable conversion of light energy into electricity, with the potential for significantly higher efficiencies and lower costs than existing technologies, thereby creating the opportunity for a step change in the solar energy industry through the use of quantum dots in printed photovoltaic cells.
Quantum dots were first discovered in the early 1980’s and the industry has developed to the point where quantum dots are now being used in an increasing range of applications, including the television and display industries, the light emitting diode (“LED”) lighting industry and the biomedical industry. Sony, for example, has recently launched its first televisions using quantum dots to enhance the picture quality and power efficiency of its products, a number of major lighting companies are developing product applications using quantum dots to create a more natural light for LEDs, the biomedical industry is using quantum dots in diagnostic and therapeutic applications, and applications are being developed to “print” highly efficient photovoltaic solar cells in mass quantities at low cost.
According to a recent market research report, “Quantum Dots (QD) Market - Global Forecast & Analysis (2012 - 2022)” published in May 2012 by MarketsandMarkets (http://www.marketsandmarkets.com), the total market for quantum dots is expected to reach $7.48 billion by 2022, at a compound annual growth rate (CAGR) of 55.2% from 2012 to 2022. The key challenge for the quantum dot industry will be its ability to scale up production volumes sufficiently to meet growing demand for quantum dots while maintaining product quality and consistency and reducing the overall costs of supply to stimulate new applications. Quantum dots remain an extremely expensive commodity, with high cost small batch production processes constraining growth.
The Company recently acquired a patent portfolio from Bayer AG that includes 36 patents: 3 domestically and 33 internationally covering the high volume manufacture of quantum dots including heavy metal free, various methods for enhancing quantum dot performance and a quantum dot based solar cell technology. In addition the company has a worldwide exclusive license to a patented chemical process that permits it to produce high performance TQDs using a lower cost and environmentally friendly solvent for greater manufacturing flexibility. The Company has developed a proprietary method that allows it to mass produce consistent quantities of quantum dots and TQDs in a continuous process at lower capital costs than other existing processes. It also has the exclusive license to a patented screen printing technique for manufacture of LED’s and OLED’s which can include quantum dot enhanced electronic displays and other electronic components. The Company believes that these intellectual properties and proprietary technologies position the Company to become a leader in the overall Nanomaterials and quantum dot industry, and a preferred supplier of high performance quantum dots and tetrapod quantum dots to an expanding range of applications.
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History of the Company
QMC was formed in January, 2007, as a Nevada corporation under the name “Hague Corporation” and its shares began trading in the over the counter market in the first quarter of 2008. The original business of Hague Corporation was the exploitation of mineral interests.
Solterra, a Delaware corporation formed in May, 2008, by Mr. Stephen Squires (present Chief Executive Officer of QMC) and other shareholders, was founded to develop quantum dot applications in the solar cell industry. Solterra was acquired by Hague Corporation in November, 2008, pursuant to a merger transaction wherein the shareholders of Solterra exchanged their shares of common stock in Solterra for shares of common stock in Hague Corporation, and Solterra became a wholly-owned operating subsidiary of Hague Corporation. Upon the closing of the merger, Hague Corporation changed its business from the exploitation of minerals to the development of a quantum dots, and subsequently changed its name to “Quantum Materials Corp.” in 2010.
Shortly after formation, Solterra began to develop its solar cell business by licensing technology key to its business. In August 2008, Solterra was granted a license to develop, manufacture and exploit TQDs by William Rice Marsh University (“Rice“) of Houston, Texas, and in September 2011, the license was amended (the “Solterra Rice License”) and a new license was entered into between Rice and QMC (the “QMC Rice License”)(together with the Solterra Rice License, the “Rice Licenses“).The Rice Licenses grant to QMC and Solterra, respectively, the right to exploit a simplified and cost effective synthesis process for the production of TQDs of high quality and uniformity, which was invented in the Rice laboratory of Dr. Michael Wong, currently a director of QMC. Under the Rice Licenses, Solterra and QMC have been granted exclusive rights to develop, manufacture, market and exploit TQDs for photovoltaic applications (in the case of Solterra) and for electronic and medical applications (in the case of QMC). In October, 2008, Solterra also entered into a license agreement (the “UA License”) with the University of Arizona under which Solterra has been granted exclusive rights to use University of Arizona’s patented screen printing techniques in the production and sale of organic light emitting diodes incorporating quantum dots in printed electronic displays and other printed electronic components. This technology was developed at University of Arizona by Dr. Ghassan Jabbour, also a director of QMC, and will be sub-licensed to QMC for utilization in its business.
Also in 2010, Solterra entered into an agreement with a third party provider of industrial process equipment to develop a proprietary process for continuous production of quantum dots under which Solterra retained all ownership and rights to the design and any related intellectual property. The initial development and pilot testing has been completed, a provisional patent application on the process has been filed and is pending, and the Company is in discussions regarding the purchase of two initial equipment units – one lower capacity unit primarily for internal research and development purposes, and one higher capacity unit for initial commercial production of TQDs. In the Company’s opinion, the design of this manufacturing process will uniquely position the Company to scale up and mass produce TQDs for commercial sale, allowing it to readily meet further increases in volume demand by simply adding additional equipment units to its manufacturing line. The Company is in the process of arranging the capital necessary to order the two initial units for its proposed manufacturing facility (as discussed in more detail below).
The recently acquired Bayer AG patent portfolio, Rice Licenses and the UA License, together with the proprietary manufacturing process, comprise the fundamental asset platform of the Company. The Company believes that this technology platform positions it to compete effectively in the global nanomaterials and quantum dot production and supply market.
4
Business Accomplishments
The following is an outline of the business accomplishments of the Company over the last few years:
• Acquired a foundational patent portfolio from Bayer AG covering high volume production of quantum dots, including heavy metal free quantum dots, nanoparticles, quantum dot enhancement technologies and quantum dot solar cell technologies;
• Implemented high volume production of quantum dots using patented continuous flow technology;
• Achieved process for the creation of high quantum yield quantum dots with quantum yield above 90%;
• Developed nanoparticle based solution for novel biotech application to aid in device R&D and calibration;
• Reduced debt and enhanced working capital position;
• Increased market capitalization;
• Developed a process and produced sample quantities of dual emission and extremely narrow emission Tetrapod Quantum Dots (TQDs);
• Established a new laboratory facility for research, development and initial production (“Wet Lab”) in Texas and negotiated a collaboration with Texas State University;
• Developed and produced sample quantities of heavy metal-free TQDs;
• Completed pilot testing of the design of the proprietary manufacturing process to produce TQDs;
• Filed a provisional patent application for the proprietary process;
• Completed pilot testing of the manufacturing process’ ability to achieve a run-rate production of 30 grams per week of TQDs;
• Successfully developed a production process and shelling techniques that produce extremely high quantum yield TQDs for potential applications in the life science, display and lighting markets;
• Developed and produced samples for a variety of potential customers covering a range of applications;
• Negotiated rights to sub-license technologies licensed from Rice University;
• Re-negotiated the Rice License to modify minimum royalty payment dates and extend certain milestone dates;
• Developed a technique for the controlled growth of the arms and legs of the TQDs in order to ensure consistency of length, width and aspect ratio between length and width (Management believes this size control can provide superior charge transfer in electronic applications);
• Achieved measurable improvement in conversion efficiency of the Company’s TQD based solar cell;
• Recognized by Frost & Sullivan and awarded 2012 North American Advanced Quantum Dot Manufacturing Enabling Technology Award; and
• Identified and initiated negotiations with several national laboratories and universities to license additional intellectual property relating to a range of quantum dot processes and applications;
The Company can provide no assurances that its accomplishments to date will result in the grant of patents for proprietary processes or result in future sales and/or profitable operations. See "Risk Factors."
Previously, the Company’s principal business emphasis was on the development of TQDs for solar cell applications through Solterra. The solar cell market has become increasingly volatile, with prices eroding due to the influx of subsidized products from abroad. Although the Company still intends to complete the development of its quantum dot solar cell technology and attempt to bring a competitive product to market, it has decided not do so in the current environment. The Company intends to wait until it can produce solar cells with sufficiently high conversion efficiency that, when combined with its low cost proprietary manufacturing process, will result in a product capable of producing energy at a cost per watt significantly below existing solar cell technology and competitive with non-renewable energy sources such as natural gas. In the meantime the Company has experienced a significant increase in interest in its materials and technologies for other applications such as life sciences, displays and lighting. Management believes that these markets present the best near term opportunities for the Company’s exploitation of its TQDs on a commercial scale. The Company will continue to pursue the solar cell market along with other energy uses for TQDs, but as indicated above, it has implemented a more balanced approach that addresses the potential demand for high performance TQDs in the other emerging markets. See “Major Market Segments” below.
Industry Overview
The Product: Nanomaterials including Quantum Dots
Quantum dots are nanoparticles of a semiconductor material, typically between 2 and 10 nanometers (a billionth of a meter) in diameter or mean dimension, which emit light fluorescence or electrons when excited with energy. Emission or absorption wavelength can be tuned by the creation of quantum dots of different sizes. The smaller the quantum dot, the closer it is to the blue end of the spectrum, and the larger the quantum dot, the closer it is to the red end of the spectrum. The unique physical properties of quantum dots exist as electrons within the quantum dot are confined to a very small space which makes them subject to certain “quantum” effects. These qualities are driving demand for quantum dots as a performance and efficiency enhancing next generation engineered material, and have led to the use of quantum dots in a range of electronic and other applications, including in the optoelectronic (display), lighting and life sciences industries.
Quantum dots also have applications in solar cells, where their characteristics enable conversion of light energy into electricity, with the potential for significantly higher efficiency (up to 2X) resulting in a lower cost per watt of energy produced when compared with existing technologies. Use of quantum dots in solar cells creates the opportunity for a step change in efficiency and performance in printed photovoltaic cells.
Quantum dots were first discovered in the early 1980’s, by Alexei Ekimov and independently by Louis E. Brus. Following their discovery, other scientists and researchers have developed a deeper understanding of quantum dots and their potential uses, and the industry has continued to develop. Due to their high cost and limited availability, quantum dots have primarily found applications in the life sciences field where they are used to enhance the optical and targeting performance in diagnostic assays. Improved manufacturing techniques are expected to lower costs and increase the availability of quantum dots for applications across a broader range of industries, including solar cells, displays, lighting, security inks and sensors.
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A high performance variant of quantum dots is tetrapod quantum dots (TQDs) that have material advantages over standard spherical quantum dots (“SQDs”), including brighter color emissions, greater purity, emissions in more than one color (“dual emissions”) and the need to employ less volume of quantum dot material in most applications. TQDs have a molecular configuration consisting of a center portion and four arms extending from the center that are equally spaced in three dimensions. TQDs can be used in virtually every application in which SQDs have been applied, and their unique architecture and shape promote more uniform distances between the dots, eliminating the problem of aggregation (the tendency of SQDs to clump together and in effect “short out”) which degrades the SQD emissions and effectiveness. But TQDs are more costly and difficult to produce in quantity using known methods, with the exception of the Company’s proprietary chemical process technology licensed exclusively to it under the Rice Licenses. The Company’s proprietary chemical process for creating TQDs uses lower cost and environmentally benign solvents (which are not toxic, corrosive or volatile) that nevertheless permit greater control for enhanced materials uniformity (>98% acceptable product per batch vs. <50% under other methods), reducing post-production reprocessing costs to attain requisite quality levels. The Company can manufacture cadmium-free TQDs as easily as cadmium based TQDs, so its TQDs are readily adaptable to applications that specify the absence of heavy metals. Thus both the Company’s heavy metal-free TQDs and its unique manufacturing process are the most environmentally responsible in the industry.
How Quantum Dots are Produced
Quantum dots are produced using four basic methods:
Colloidal synthesis: Growth of quantum dots from precursor compounds dissolved in solutions, much like traditional chemical processes. This manual batch process requires careful control of temperature, mixing and concentration levels of precursor materials. Precise control must be maintained uniformly throughout the solution otherwise non-uniform, irregular quantum dots are produced. Due to their very small size it is extremely difficult if not impossible to segregate the quantum dots by size once they have been produced and a conglomeration of varied size quantum dots are not capable of producing the unique features that are required in most applications.
Prefabricated seed growth: Quantum dots are created from chemical precursors in the presence of a molecular cluster compound under conditions whereby the integrity of the molecular cluster is maintained and acts as a prefabricated seed template. This manual batch method can produce reasonable quantities of quantum dots, but can take significant capital resources to achieve significant volume and still results in low yields, typically less than 50%.
Bacterial or viral synthesis: Formation of quantum dots from specific organisms that recognize specific semiconductor base materials and through uptake and process can produce highly uniform quantum dots. This batch method has certain limits on quantum dot shape and composition and remains very labor intensive thus difficult to scale.
Company’s proprietary continuous process method: Unlike the three processes above, the Company has developed a proprietary (patent pending) continuous process manufacturing technique to produce QD’s & TQDs that has the potential to overcome the cost and performance challenges presented by other manufacturing methods. The patented chemistry of the Company’s process eliminates conventional solvents and substitutes cheaper solvents that are not toxic, corrosive or volatile, thus enabling a significant reduction in the overall temperature required for manufacturing and eliminating any gassing of the solvents. The significant reduction in the manufacturing temperature and elimination of gassing enabled the Company to develop a proprietary manufacturing technology that also eliminates the creation of hazardous wastes in the production process. By using these solvents, the Company was also able to improve the manufacturing yield of its QD’d & TQDs significantly. The Company believes that these increases in the quantum dot yields and the use of cost-efficient continuous manufacturing techniques will enable the Company to scale production more readily (by simply adding more equipment units to its manufacturing line), thus reducing the produced cost of the QD’s & TQDs significantly compared to current quantum dot manufacturing methods. Note that the Company can also produce small quantities of its QD’s & TQDs using a batch process employing the chemistry and other techniques under the Rice Licenses, and has done so for sample development purposes.
6
Market for Quantum Dots
According to a recent market research report, “Quantum Dots (QD) Market - Global Forecast & Analysis (2012 - 2022)” published in August 2012 by MarketsandMarkets (http://www.marketsandmarkets.com), the total market for quantum dots is expected to reach $7.48 billion by 2022, at a CAGR of 55.2% from 2012 to 2022. The global market for quantum dots, which in 2010 was estimated to be $67 million in revenues, is projected to grow over the next 5 years at a CAGR of 58.3%, reaching almost $670 million by 2015, a tenfold increase. Following the initially modest revenues generated by standalone colloidal quantum dots—primarily serving the life sciences, academic, and other industrial research and development (R&D) communities—within the next 2 years several significant product launches are expected. The biggest growth sectors are forecast to be in optoelectronics, solar energy, optics and electronics, adding to the growth already established in the life sciences sector. Specific quantum dot-based products are expected to include lasers, sensors, flash memory, lighting and displays, second and third-generation solar panels, security deterrents, and several enhancements to portable devices.
Quantum dots remain an extremely expensive commodity, with costs in the range of $3,000-$10,000 per gram. The price of quantum dots is directly affected by the high cost of producing quantum dots in relatively small batch quantities. As with other nanomaterials, these relatively high prices have been supported by favorable performance of the quantum dots at very low concentrations. Prices for quantum dots are expected to moderate over time as greater production efficiencies are discovered and implemented, resulting in higher volumes. This is expected to support greater adoption of quantum dots for use in end products and further support the growth of the quantum dot market. Under current production methods, rigorous processing has been required from batch method synthesis to produce a consistently pure and tightly size-controlled quantum dot product. To significantly grow the market, the industry will need to achieve much lower production costs for quantum dots, while maintaining strict control over quality and uniformity.
Major Market Segments
Life Sciences. The life sciences industry is one of the early areas for adoption of quantum dot technology, especially for “stand-alone” quantum dots used in fluorescent markers in diagnostic and therapeutic applications. This includes the use of quantum dots for marking (illuminating) particular cell types or metabolic processes for understanding diseases and conditions as well as the use of quantum dots to act as delivery agents for drug treatments or therapy for a wide range of ailments. The fluorescent qualities of quantum dots provide an attractive alternative to traditional organic dyes in bio-imaging procedures and are able to image a number of different color wavelengths simultaneously. Quantum dots are able to withstand irradiation from high powered microscopes for longer periods than organic dyes, and have been widely adopted in the bio-imaging sector. Applications in the life sciences field are expected to further increase as quantum dot performance vs. conventional fluorescing material and organic dyes continues to be proven. Quantum dots offer a host of benefits when compared to organic fluorophores such as biological dyes, including:
Increased photo-stability
Longer shelf life
Resilience to photo bleaching
Increased sensitivity
Narrow emission peaks
Broad excitation profile
Multiplexing capability
QMC is currently the only company capable of producing highly uniform tetrapod quantum dots. In addition QMC has developed the technology required to produce TQDs with very narrow emission peaks as well as TQDs with dual emissions. Both of these features are highly desirable for a broad range of life science applications. Management believes its licensed patented chemistry and patented continuous production process will enable QMC to produce TQDs in volume and at a price point that will make them a very compelling choice for these applications.
Optoelectronics. This market is comprised principally of quantum dot displays (QDD) for televisions, computers, cell phones, PDAs and various other applications. A QDD provides better optical performance when compared to cathode ray tubes (CRT) and conventional liquid crystal displays (LCDs):
50 to 100 times more brightness in comparison with CRTs and LCDs
pure colors due to size tunability and narrow color-band frequency emission of the quantum dots
significant energy savings, with power consumption being 1/5th to 1/10th that of an OLED or LCD displays
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Sony, for example, has recently launched its first televisions using quantum dots to enhance the picture quality and power efficiency of its products. It is expected that quantum dots may also be used to improve the performance of other optoelectronic devices and lasers and optical components used in telecommunications.
QMC is currently the only company capable of producing highly uniform tetrapod quantum dots. In addition, QMC has developed the technology required to produce TQDs with very narrow emission peaks as well as TQDs with high quantum yield (high brightness). Both of these features are highly desirable for a broad range of display applications. In Management’s experience, TQDs are far less likely to aggregate due to their unique shape. Aggregation typically leads to self-extinguishing of the quantum dots, resulting in loss of emissions. This resistance to aggregation by TQDs results in the need to use fewer quantum dots in optoelectronic applications to achieve the same performance levels. It also allows TQDs to achieve higher optical densities. Management believes its licensed patented chemistry and patented continuous production process will enable it to produce quantum dots and TQDs in volume and at a price point that will make them a very compelling choice for these applications.
Lighting. In the lighting market, quantum dot LEDs have begun to be commercialized in 2013, with significant R&D occurring among manufacturers of solid-state lighting. While companies have launched quantum dot LED lamps, the current market for quantum dot LED lamps and the other lighting products is still very small. The Company believes quantum dot based lighting will be the best replacement for currently available compact florescent lighting (CFL) and LED lighting, as quantum dot technology provides better efficiency and high power intensity, and the ability to tune the light spectrum to emit light that is the most pleasing and/or appropriate for the application.
As stated above, QMC is currently the only company capable of producing highly uniform tetrapod quantum dots. In addition, QMC has developed the technology required to produce TQDs with very narrow emission peaks as well as TQDs with high quantum yield (high brightness). Both of these features are highly desirable for a broad range of lighting applications. For lighting applications, narrow emission peaks is a key feature that is necessary in order to produce a highly tuned light source. In Management’s experience, TQDs are far less likely to aggregate due to their unique shape. Aggregation typically leads to self-extinguishing of the quantum dots resulting in loss of emissions. This resistance to aggregation by TQDs results in the need to use fewer quantum dots in lighting applications to achieve the same performance levels. It also allows TQDs to achieve higher optical densities. Management believes its licensed patented chemistry and patented continuous production process will enable it to produce quantum dots and TQDs in volume and at a price point that will make them a very compelling choice for these applications.
Solar Energy. Quantum dots are capable of producing energy from a broad spectrum of solar and radiant energy, including ultraviolet and infrared frequencies. They have conversion potentials of approximately twice that of conventional solar cells, and can be developed out of a variety of materials. Applications are being developed to “print” highly efficient photovoltaic solar cells in mass quantities at low cost. Management believes that quantum dot solar cells and panels will be the next evolutionary development in the field of solar energy, and that commercialization will begin in 2016.
Management further believes that the increased conversion efficiencies of TQDs, its low cost continuous production method and the screen print technology obtained under the UA License will permit QMC’s subsidiary Solterra to offer solar electricity solutions that can compete on a non-subsidized basis with the price of retail electricity in key markets in North America, Europe, the Middle East and Asia.
Other applications. Current and future applications of quantum dots may impact a broad range of other industrial markets. These potentially include computing and memory, improved thermoelectric components, security applications such as covert identification tagging, biohazard detection sensors and other uses. Quantum dots have the theoretical potential to enable batteries to increase charge capacity up to ten fold, reduce re-charge cycle time by half and double usable life by replacing the current graphite anodes with silicon quantum dots.
The Company intends to position itself to provide lower cost, higher volume, higher quality QD’s & TQDs that will benefit from one or more of these potential market trends.
8
Business Development Overview
In the past year, the Company has entered into an increased number of non-disclosure agreements (“NDAs”) and sample supply agreements with a several product manufacturers in different industries as well as universities and independent research laboratories. In most cases, the NDAs with manufacturers are for exploring joint development of specific products in the liquid crystal display (LCD) and light-emitting diode (LED) industries, solid state lighting industry, life sciences and for quantum dot adaptable printing equipment and other new technologies. The focus of the Company is on those sectors of the market in which utilization of quantum dots will have a transformational effect on the quality of end use products and their performance. The Company believes that its advantages in delivery of high quality, high performance quantum dots and TQDs (utilizing the chemistry under the Rice Licenses), patented continuous production techniques and screen printing techniques (to which it has exclusive rights under UA License) make it an attractive supplier to these markets.
Current Position
For Quantum Materials Corporation, our recent achievements are bringing us closer to our goals. In July 2013 we moved into new offices and wet labs at STAR Park, in San Marcos, Texas. Shortly after that we began production of tetrapod quantum dots and shipped TQD samples to some waiting potential clients.
In Summer 2014, we welcomed our first automated production system and have scaled its original 2 gms/hr to 25gms/hr with expectation we can subsequently further scale this system type to 100gms/hr in the early part of calendar 2015.
The advantages and benefits of our automated production are:
Large scale production from one workspace;
Less manpower and time needed for cost savings;
Economies of scale leading to lower costs;
95% production yield for less defects: less processing;
Improved quality control for higher uniformity; and
Assurance of backup systems for continuous supply.
Shipping Samples to Potential Clients
As a result of our automated production system, we have increased our rate of shipping samples to potential customers and we have delivered more than two dozen shipments.
To our knowledge this represents the first shipments of automated production, not manual “batch” production. Our volume production process assures our clients that we can deliver high volumes of quantum dots for industrial use.
Industries or uses intended include – Displays, Lighting, Biotech, Anti-counterfeiting, Sensors, Solar, Paint, and Coatings.
For the most part, our shipments of samples are to client’s specifications, and for others, these samples are preliminary shipments for evaluation for secondary purposes as we collaborate toward the development of their specific quantum dot enabled product.
Today we have a very active pipeline of potential clients that grows daily. These potential clients require a broad range of nanomaterials from relatively simple Red emitting quantum dots to both near and far Infrared emitting Quantum Dots, Thick-Shell Quantum Dots and/or Non-Heavy Metal Quantum Dots. Industries or uses intended include – Solid-State Lighting, Hydrogen Conversion, Displays, Solar, Automotive Glass and BIPV films, Batteries, Lasers, Biotech and Inks.
Eleven of the twenty-four potential clients have already had one or more face-to-face meetings with company management.
To maintain control of quantum dot production and quality, the Company’s preferred business relationship is a joint venture that evolves from a collaborative development effort where the parties agree to cooperate in the design and production of a range of new end products utilizing the Company’s Nanomaterials and/or screen printing processes, with the other party contributing industry expertise and substantial marketing, distribution and sales capabilities. In most cases, the Company envisions that the industry joint venture party would provide the financial resources to underwrite the project. In some cases, the joint venture may need to seek outside financing for the commercialization phase of the project. In either case, the Company would continue to control the production of the nanomaterials for incorporation into the end products.
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Alternatively, the Company may choose to license a manufacturer of end products to incorporate the Company’s Nanomaterials into one or more specific products on an exclusive or non-exclusive basis. In some cases, it may be appropriate to dedicate an equipment unit to a single product line (for example, silicon nanocrystals for energy storage) for a single licensee, whether sited at the Company’s facilities or at the facilities of the licensee. In all cases, the license would contain provisions restricting the use of the Company’s technology and protecting its intellectual property.
In advancing these development activities, the Company follows a disciplined process to protect its intellectual property and foster collaborative arrangements. First, NDAs are entered into, followed by sample agreements. The Company then formulates, manufactures and supplies product samples to the counterparty’s specifications for evaluation and testing. If successful, this then leads to discussions on the form of a possible commercial relationship. Each step takes time, and the Company is increasing its sample production capacity to satisfy the backlog of requests for its materials of different compositions. Sample production is currently accommodated through use of the lab facilities at the Company’s Wet Lab described below.
In seeking to expand its customer base, the Company’s marketing strategy will be to engage in joint ventures or other strategic arrangements with manufacturers and others to jointly develop applications using its patented continuous production process and licensed screen printing technology to maximum effect. Such joint collaborations will involve the Company working closely with the industry counterpart to optimize the performance of the Company’s materials in each application or device, and to use the results from product development and testing to further enhance product specifications to meet the requirements of the market. These collaborations will support the Company’s internal research and development activities, which will continue to be a primary part of the Company’s business. The principal revenue streams for the Company are expected to be from (i) sales of Nanomaterials, (ii) royalties from sales of products and components by third parties incorporating the Company’s Nanomaterials, (iii) milestone payments under joint development arrangements with product developers and manufacturers, and (iv) sub-licensing fees where the Company engages in sub-licensing arrangements for its technology.
As of this date, the Company has not entered into any formal commercial joint ventures or licensing agreements, but has executed the following array of agreements and taken the following steps toward commercialization of its Nanomaterials in various market sectors:
Product Manufacturers
Universities,
Researchers, Other
NDAs 26 13
Sample Agreements 8 2
Initial Samples Delivered 8 2
Commercial Discussions Underway 21 5
However, there can be no assurance that the above activities will result in sales of the Company’s products or that such sales will result in profits to the Company. See “Risk Factors.”
The Company’s existing business development team is led by its director of marketing, who handles the North American, U.K. and European Union markets, supported by two staff employees responsible for Asia and the Middle East, respectively. The Company’s marketing and sales capabilities, considered to be critical to the success of the business, will also be expanded with the recruitment of one additional full time person during the next twelve months.
Operational Overview
The Company has recently entered the commercialization stage of its business with the launch of the Wet Lab in July, 2013, its first permanent facility. The Wet Lab is located in San Marcos, Texas, approximately 30 miles south of Austin, Texas. This facility is part of the Star Park Technology Center, an extension of Texas State University, the fifth largest university in Texas and one of eight Texas Emerging Research Universities. This arrangement provides the Company with the opportunity to expand its operations within this 30 acre technology park. The Company has a year to year lease agreement and the option to add additional lab and office space on an as-needed basis. This location provides the Company with convenient access to an experienced faculty and specialized laboratory facilities that can support joint research and development efforts with Texas State University, and is in proximity to a number of leading companies in the life sciences, lighting, solar and electronics markets.
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The Wet Lab will be the center of operations of the Company and will be used by the Company to produce small sample quantities of Nanomaterials as well as larger quantities of Nanomaterials via its patented process for supply to research facilities, customers and potential customers, and potential development joint ventures. The facility is used to support test production runs, to fine tune the characteristics of the materials for optimized performance in the customer's specific application, and for continued R&D activities. The Wet Lab was established through funds raised in a private placement of common shares of the Company completed in early June 2013.
The Company has established its first continuous manufacturing process at the Wet Lab and can now produce kilogram volumes of Nanomaterials for supply to customers on a commercial scale. This first unit is being used to validate synthesis protocols for customized materials development to meet customer specification and is also being used to produce samples and is capable of fulfilling small to medium-size orders. The Company has also negotiated an agreement with the equipment provider for the delivery of a production scale equipment unit capable of producing up to 4000 kilograms per year. This unit is intended to be used to fulfill large commercial orders. Subject to the Company obtaining financing for this larger equipment acquisition, the sample size and production size equipment units are expected to be delivered to the Wet Lab during the first quarter of 2015. The second unit will be commissioned and tested upon delivery, with a view towards commencing initial production runs of materials within 30-60 days after installation. While the Company plans to work extensively with this provider of equipment units, the Company owns all rights to the designs and intellectual property resulting from the development project, and could contract with one or more other competent suppliers of equipment if that became necessary.
The Company is preparing to enter the next phase of its development – production and supply of commercial scale volumes of materials to potential customers and joint ventures in order to develop a platform of initial customers in various industries. In order to finance the development of its business, including the establishment of its continuous process manufacturing facility, purchase of the second equipment unit and the expansion of its marketing and sales capabilities. The Company expects to commence generating limited revenues from the production of materials at the Wet Lab in the third quarter of 2014. Such revenues are expected to be modest at first and will be dependent upon the Company generating purchase orders from potential customers currently under NDAs and evaluating the Company’s technology. As part of this strategy, the Company has engaged in discussions with numerous target customers and has signed a number of NDAs and Sample Agreements to increase the probability of receiving firm orders from one or more of these entities.
The Company’s ongoing research and development functions are considered key to maintaining and enhancing its competitive position in the growing nanomaterials and quantum dot market. Nanomaterials and Quantum dot technology continue to evolve, with new discoveries and refinements being made on an ongoing basis. The Company intends to be at the forefront of technological development, and will focus a significant part of its efforts on this, as it has done historically. Continuing R&D activities at the Wet Lab will be an important aspect of the Company’s strategy, as will the Company’s collaboration with Rice University, University of Arizona, Texas State University and the numerous research centers and departments with which the Company has relationships.
The key assets of the Company are its patents, high volume process equipment, licenses and other intellectual property rights, its knowhow and the expertise, capabilities and relationships brought to the Company by its management team. The Company will continue to develop its intellectual property portfolio and licensing rights. The Company is also working closely with numerous universities and public and private labs to develop and expand its intellectual property portfolio. As the business progresses, the Company will continually build out its portfolio of owned and licensed intellectual property, and take all appropriate steps to protect these rights.
The Licenses with Rice and University of Arizona include provisions for milestones and milestone payments. To date, these have been paid as agreed, waived and/or extended by both Rice and University of Arizona, respectively, illustrating the support each university has given to the Company as it has attempted to advance its business with measured resources. As the Company moves forward, it expects to be able to meet all payment and other obligations under the Licenses, and the Company’s funding strategy takes account of these requirements.
The business of the Company is subject to various types of government regulations, including restrictions on the chemical composition of nanomaterials used in life sciences and other sensitive applications, and regulation of hazardous materials used in or produced by the manufacture or use of quantum dots. Management believes that its patented technology, licensed patented chemistry and proprietary manufacturing process allow the Company to comply with current regulations by producing nanomaterials and by using environmentally friendly solvents, which are nevertheless contained and recycled in the production process. However, new regulations or requirements may develop that could adversely affect the Company or its products in the future. See “Risk Factors.”
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ___
Commission File Number: 0-52956
QUANTUM MATERIALS CORP.
(Exact name of Registrant as specified in its charter)
Nevada 20-8195578
(State of jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
3055 Hunter Road, San Marcos, TX 78666
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (214) 701-8779
(Former address of principal executive offices, if changed since last report) (Zip Code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: Common Stock, $.001 Par Value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes [ ] No [X]
Check whether the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X . No ___.
Indicate by check mark whether the Registrant has submitted electronically and posted on it’s corporate Web site, if any, every Interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ].
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the Exchange Act: smaller reporting company [X].
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes [ ] No [X]
As of December 31, 2013, of the 198,875,204 outstanding shares of Common Stock, the number of shares held by non-affiliates was approximately 161,000,000 shares with a market value of approximately $8,050,000 based upon a last sale for our Common Stock of $.05 as of the close of business on December 31, 2013.
As of September 17, 2014, the issuer had 257,459,909 shares of common stock, $0.001 par value per share outstanding.
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FORWARD-LOOKING STATEMENTS
Some of the statements under this Form 10-K contain forward-looking statements. All statements other than statements of historical facts contained in this Form 10-K, including statements regarding our plans, objectives, goals, strategies, future events, capital expenditures, future results, our competitive strengths, our business strategy and the trends in our industry are forward-looking statements. The words “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “appear,” “forecast,” “future,” “likely,” “probably,” “suggest” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements.
Forward-looking statements reflect only our current expectations. We may not update these forward-looking statements, even though our situation may change in the future. In any forward-looking statement, where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements due to a number of uncertainties, many of which are unforeseen, including, without limitation:
• we are a development stage company with no history of profitable operations;
• we will need additional capital to finance our business;
• our products may not gain market acceptance;
• we need to purchase microreactors to produce quantum dots on a larger scale; we need to establish distribution relationships and channels and strategic alliances for market penetration and revenue growth;
• competition within our industry;
• the availability of additional capital on terms acceptable to us.
In addition, you should refer to the “Risk Factors” section of this Form 10-K for a discussion of other factors that may cause our actual results to differ materially from those implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-K will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, if at all. Accordingly, you should not place undue reliance on these forward-looking statements.
We qualify all the forward-looking statements contained in this Form 10-K by the foregoing cautionary statements.
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PART I
Item 1. Business
Introduction
Quantum Materials Corp. (OTC:QTMM) (“QMC”) is a nanotechnology company specializing in the design, development, production and supply of Nanomaterials including Quantum Dots and tetrapod quantum dots (“TQDs”), a high performance variant of quantum dots, for a range of applications in the life sciences, optoelectronics, photovoltaics, lighting, security ink and sensor sectors of the market. QMC owns 100% of Solterra Renewable Technologies, Inc. (“Solterra”), an operating subsidiary that is focused on the photovoltaic (solar cell) market. For convenience, the term “Company” is used to refer to both QMC and Solterra unless the context otherwise requires.
Nanoparticle are materials with features in the nanoscale, which features can be beneficial in a number of applications. Quantum dots are atomic crystals, tiny nanoparticles which can operate as up converters or down converters, emitting either photons or electrons when excited. The color of light emitted varies depending on the size of the quantum dot so that photonic emissions can be tuned by the creation of quantum dots of different sizes. Their unique properties as highly efficient, next generation semiconductors have led to the use of quantum dots in a range of electronic and other applications, including in the biomedical, display and lighting industries. Quantum dots also have applications in solar cells, where their characteristics enable conversion of light energy into electricity, with the potential for significantly higher efficiencies and lower costs than existing technologies, thereby creating the opportunity for a step change in the solar energy industry through the use of quantum dots in printed photovoltaic cells.
Quantum dots were first discovered in the early 1980’s and the industry has developed to the point where quantum dots are now being used in an increasing range of applications, including the television and display industries, the light emitting diode (“LED”) lighting industry and the biomedical industry. Sony, for example, has recently launched its first televisions using quantum dots to enhance the picture quality and power efficiency of its products, a number of major lighting companies are developing product applications using quantum dots to create a more natural light for LEDs, the biomedical industry is using quantum dots in diagnostic and therapeutic applications, and applications are being developed to “print” highly efficient photovoltaic solar cells in mass quantities at low cost.
According to a recent market research report, “Quantum Dots (QD) Market - Global Forecast & Analysis (2012 - 2022)” published in May 2012 by MarketsandMarkets (http://www.marketsandmarkets.com), the total market for quantum dots is expected to reach $7.48 billion by 2022, at a compound annual growth rate (CAGR) of 55.2% from 2012 to 2022. The key challenge for the quantum dot industry will be its ability to scale up production volumes sufficiently to meet growing demand for quantum dots while maintaining product quality and consistency and reducing the overall costs of supply to stimulate new applications. Quantum dots remain an extremely expensive commodity, with high cost small batch production processes constraining growth.
The Company recently acquired a patent portfolio from Bayer AG that includes 36 patents: 3 domestically and 33 internationally covering the high volume manufacture of quantum dots including heavy metal free, various methods for enhancing quantum dot performance and a quantum dot based solar cell technology. In addition the company has a worldwide exclusive license to a patented chemical process that permits it to produce high performance TQDs using a lower cost and environmentally friendly solvent for greater manufacturing flexibility. The Company has developed a proprietary method that allows it to mass produce consistent quantities of quantum dots and TQDs in a continuous process at lower capital costs than other existing processes. It also has the exclusive license to a patented screen printing technique for manufacture of LED’s and OLED’s which can include quantum dot enhanced electronic displays and other electronic components. The Company believes that these intellectual properties and proprietary technologies position the Company to become a leader in the overall Nanomaterials and quantum dot industry, and a preferred supplier of high performance quantum dots and tetrapod quantum dots to an expanding range of applications.
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History of the Company
QMC was formed in January, 2007, as a Nevada corporation under the name “Hague Corporation” and its shares began trading in the over the counter market in the first quarter of 2008. The original business of Hague Corporation was the exploitation of mineral interests.
Solterra, a Delaware corporation formed in May, 2008, by Mr. Stephen Squires (present Chief Executive Officer of QMC) and other shareholders, was founded to develop quantum dot applications in the solar cell industry. Solterra was acquired by Hague Corporation in November, 2008, pursuant to a merger transaction wherein the shareholders of Solterra exchanged their shares of common stock in Solterra for shares of common stock in Hague Corporation, and Solterra became a wholly-owned operating subsidiary of Hague Corporation. Upon the closing of the merger, Hague Corporation changed its business from the exploitation of minerals to the development of a quantum dots, and subsequently changed its name to “Quantum Materials Corp.” in 2010.
Shortly after formation, Solterra began to develop its solar cell business by licensing technology key to its business. In August 2008, Solterra was granted a license to develop, manufacture and exploit TQDs by William Rice Marsh University (“Rice“) of Houston, Texas, and in September 2011, the license was amended (the “Solterra Rice License”) and a new license was entered into between Rice and QMC (the “QMC Rice License”)(together with the Solterra Rice License, the “Rice Licenses“).The Rice Licenses grant to QMC and Solterra, respectively, the right to exploit a simplified and cost effective synthesis process for the production of TQDs of high quality and uniformity, which was invented in the Rice laboratory of Dr. Michael Wong, currently a director of QMC. Under the Rice Licenses, Solterra and QMC have been granted exclusive rights to develop, manufacture, market and exploit TQDs for photovoltaic applications (in the case of Solterra) and for electronic and medical applications (in the case of QMC). In October, 2008, Solterra also entered into a license agreement (the “UA License”) with the University of Arizona under which Solterra has been granted exclusive rights to use University of Arizona’s patented screen printing techniques in the production and sale of organic light emitting diodes incorporating quantum dots in printed electronic displays and other printed electronic components. This technology was developed at University of Arizona by Dr. Ghassan Jabbour, also a director of QMC, and will be sub-licensed to QMC for utilization in its business.
Also in 2010, Solterra entered into an agreement with a third party provider of industrial process equipment to develop a proprietary process for continuous production of quantum dots under which Solterra retained all ownership and rights to the design and any related intellectual property. The initial development and pilot testing has been completed, a provisional patent application on the process has been filed and is pending, and the Company is in discussions regarding the purchase of two initial equipment units – one lower capacity unit primarily for internal research and development purposes, and one higher capacity unit for initial commercial production of TQDs. In the Company’s opinion, the design of this manufacturing process will uniquely position the Company to scale up and mass produce TQDs for commercial sale, allowing it to readily meet further increases in volume demand by simply adding additional equipment units to its manufacturing line. The Company is in the process of arranging the capital necessary to order the two initial units for its proposed manufacturing facility (as discussed in more detail below).
The recently acquired Bayer AG patent portfolio, Rice Licenses and the UA License, together with the proprietary manufacturing process, comprise the fundamental asset platform of the Company. The Company believes that this technology platform positions it to compete effectively in the global nanomaterials and quantum dot production and supply market.
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Business Accomplishments
The following is an outline of the business accomplishments of the Company over the last few years:
• Acquired a foundational patent portfolio from Bayer AG covering high volume production of quantum dots, including heavy metal free quantum dots, nanoparticles, quantum dot enhancement technologies and quantum dot solar cell technologies;
• Implemented high volume production of quantum dots using patented continuous flow technology;
• Achieved process for the creation of high quantum yield quantum dots with quantum yield above 90%;
• Developed nanoparticle based solution for novel biotech application to aid in device R&D and calibration;
• Reduced debt and enhanced working capital position;
• Increased market capitalization;
• Developed a process and produced sample quantities of dual emission and extremely narrow emission Tetrapod Quantum Dots (TQDs);
• Established a new laboratory facility for research, development and initial production (“Wet Lab”) in Texas and negotiated a collaboration with Texas State University;
• Developed and produced sample quantities of heavy metal-free TQDs;
• Completed pilot testing of the design of the proprietary manufacturing process to produce TQDs;
• Filed a provisional patent application for the proprietary process;
• Completed pilot testing of the manufacturing process’ ability to achieve a run-rate production of 30 grams per week of TQDs;
• Successfully developed a production process and shelling techniques that produce extremely high quantum yield TQDs for potential applications in the life science, display and lighting markets;
• Developed and produced samples for a variety of potential customers covering a range of applications;
• Negotiated rights to sub-license technologies licensed from Rice University;
• Re-negotiated the Rice License to modify minimum royalty payment dates and extend certain milestone dates;
• Developed a technique for the controlled growth of the arms and legs of the TQDs in order to ensure consistency of length, width and aspect ratio between length and width (Management believes this size control can provide superior charge transfer in electronic applications);
• Achieved measurable improvement in conversion efficiency of the Company’s TQD based solar cell;
• Recognized by Frost & Sullivan and awarded 2012 North American Advanced Quantum Dot Manufacturing Enabling Technology Award; and
• Identified and initiated negotiations with several national laboratories and universities to license additional intellectual property relating to a range of quantum dot processes and applications;
The Company can provide no assurances that its accomplishments to date will result in the grant of patents for proprietary processes or result in future sales and/or profitable operations. See "Risk Factors."
Previously, the Company’s principal business emphasis was on the development of TQDs for solar cell applications through Solterra. The solar cell market has become increasingly volatile, with prices eroding due to the influx of subsidized products from abroad. Although the Company still intends to complete the development of its quantum dot solar cell technology and attempt to bring a competitive product to market, it has decided not do so in the current environment. The Company intends to wait until it can produce solar cells with sufficiently high conversion efficiency that, when combined with its low cost proprietary manufacturing process, will result in a product capable of producing energy at a cost per watt significantly below existing solar cell technology and competitive with non-renewable energy sources such as natural gas. In the meantime the Company has experienced a significant increase in interest in its materials and technologies for other applications such as life sciences, displays and lighting. Management believes that these markets present the best near term opportunities for the Company’s exploitation of its TQDs on a commercial scale. The Company will continue to pursue the solar cell market along with other energy uses for TQDs, but as indicated above, it has implemented a more balanced approach that addresses the potential demand for high performance TQDs in the other emerging markets. See “Major Market Segments” below.
Industry Overview
The Product: Nanomaterials including Quantum Dots
Quantum dots are nanoparticles of a semiconductor material, typically between 2 and 10 nanometers (a billionth of a meter) in diameter or mean dimension, which emit light fluorescence or electrons when excited with energy. Emission or absorption wavelength can be tuned by the creation of quantum dots of different sizes. The smaller the quantum dot, the closer it is to the blue end of the spectrum, and the larger the quantum dot, the closer it is to the red end of the spectrum. The unique physical properties of quantum dots exist as electrons within the quantum dot are confined to a very small space which makes them subject to certain “quantum” effects. These qualities are driving demand for quantum dots as a performance and efficiency enhancing next generation engineered material, and have led to the use of quantum dots in a range of electronic and other applications, including in the optoelectronic (display), lighting and life sciences industries.
Quantum dots also have applications in solar cells, where their characteristics enable conversion of light energy into electricity, with the potential for significantly higher efficiency (up to 2X) resulting in a lower cost per watt of energy produced when compared with existing technologies. Use of quantum dots in solar cells creates the opportunity for a step change in efficiency and performance in printed photovoltaic cells.
Quantum dots were first discovered in the early 1980’s, by Alexei Ekimov and independently by Louis E. Brus. Following their discovery, other scientists and researchers have developed a deeper understanding of quantum dots and their potential uses, and the industry has continued to develop. Due to their high cost and limited availability, quantum dots have primarily found applications in the life sciences field where they are used to enhance the optical and targeting performance in diagnostic assays. Improved manufacturing techniques are expected to lower costs and increase the availability of quantum dots for applications across a broader range of industries, including solar cells, displays, lighting, security inks and sensors.
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A high performance variant of quantum dots is tetrapod quantum dots (TQDs) that have material advantages over standard spherical quantum dots (“SQDs”), including brighter color emissions, greater purity, emissions in more than one color (“dual emissions”) and the need to employ less volume of quantum dot material in most applications. TQDs have a molecular configuration consisting of a center portion and four arms extending from the center that are equally spaced in three dimensions. TQDs can be used in virtually every application in which SQDs have been applied, and their unique architecture and shape promote more uniform distances between the dots, eliminating the problem of aggregation (the tendency of SQDs to clump together and in effect “short out”) which degrades the SQD emissions and effectiveness. But TQDs are more costly and difficult to produce in quantity using known methods, with the exception of the Company’s proprietary chemical process technology licensed exclusively to it under the Rice Licenses. The Company’s proprietary chemical process for creating TQDs uses lower cost and environmentally benign solvents (which are not toxic, corrosive or volatile) that nevertheless permit greater control for enhanced materials uniformity (>98% acceptable product per batch vs. <50% under other methods), reducing post-production reprocessing costs to attain requisite quality levels. The Company can manufacture cadmium-free TQDs as easily as cadmium based TQDs, so its TQDs are readily adaptable to applications that specify the absence of heavy metals. Thus both the Company’s heavy metal-free TQDs and its unique manufacturing process are the most environmentally responsible in the industry.
How Quantum Dots are Produced
Quantum dots are produced using four basic methods:
Colloidal synthesis: Growth of quantum dots from precursor compounds dissolved in solutions, much like traditional chemical processes. This manual batch process requires careful control of temperature, mixing and concentration levels of precursor materials. Precise control must be maintained uniformly throughout the solution otherwise non-uniform, irregular quantum dots are produced. Due to their very small size it is extremely difficult if not impossible to segregate the quantum dots by size once they have been produced and a conglomeration of varied size quantum dots are not capable of producing the unique features that are required in most applications.
Prefabricated seed growth: Quantum dots are created from chemical precursors in the presence of a molecular cluster compound under conditions whereby the integrity of the molecular cluster is maintained and acts as a prefabricated seed template. This manual batch method can produce reasonable quantities of quantum dots, but can take significant capital resources to achieve significant volume and still results in low yields, typically less than 50%.
Bacterial or viral synthesis: Formation of quantum dots from specific organisms that recognize specific semiconductor base materials and through uptake and process can produce highly uniform quantum dots. This batch method has certain limits on quantum dot shape and composition and remains very labor intensive thus difficult to scale.
Company’s proprietary continuous process method: Unlike the three processes above, the Company has developed a proprietary (patent pending) continuous process manufacturing technique to produce QD’s & TQDs that has the potential to overcome the cost and performance challenges presented by other manufacturing methods. The patented chemistry of the Company’s process eliminates conventional solvents and substitutes cheaper solvents that are not toxic, corrosive or volatile, thus enabling a significant reduction in the overall temperature required for manufacturing and eliminating any gassing of the solvents. The significant reduction in the manufacturing temperature and elimination of gassing enabled the Company to develop a proprietary manufacturing technology that also eliminates the creation of hazardous wastes in the production process. By using these solvents, the Company was also able to improve the manufacturing yield of its QD’d & TQDs significantly. The Company believes that these increases in the quantum dot yields and the use of cost-efficient continuous manufacturing techniques will enable the Company to scale production more readily (by simply adding more equipment units to its manufacturing line), thus reducing the produced cost of the QD’s & TQDs significantly compared to current quantum dot manufacturing methods. Note that the Company can also produce small quantities of its QD’s & TQDs using a batch process employing the chemistry and other techniques under the Rice Licenses, and has done so for sample development purposes.
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Market for Quantum Dots
According to a recent market research report, “Quantum Dots (QD) Market - Global Forecast & Analysis (2012 - 2022)” published in August 2012 by MarketsandMarkets (http://www.marketsandmarkets.com), the total market for quantum dots is expected to reach $7.48 billion by 2022, at a CAGR of 55.2% from 2012 to 2022. The global market for quantum dots, which in 2010 was estimated to be $67 million in revenues, is projected to grow over the next 5 years at a CAGR of 58.3%, reaching almost $670 million by 2015, a tenfold increase. Following the initially modest revenues generated by standalone colloidal quantum dots—primarily serving the life sciences, academic, and other industrial research and development (R&D) communities—within the next 2 years several significant product launches are expected. The biggest growth sectors are forecast to be in optoelectronics, solar energy, optics and electronics, adding to the growth already established in the life sciences sector. Specific quantum dot-based products are expected to include lasers, sensors, flash memory, lighting and displays, second and third-generation solar panels, security deterrents, and several enhancements to portable devices.
Quantum dots remain an extremely expensive commodity, with costs in the range of $3,000-$10,000 per gram. The price of quantum dots is directly affected by the high cost of producing quantum dots in relatively small batch quantities. As with other nanomaterials, these relatively high prices have been supported by favorable performance of the quantum dots at very low concentrations. Prices for quantum dots are expected to moderate over time as greater production efficiencies are discovered and implemented, resulting in higher volumes. This is expected to support greater adoption of quantum dots for use in end products and further support the growth of the quantum dot market. Under current production methods, rigorous processing has been required from batch method synthesis to produce a consistently pure and tightly size-controlled quantum dot product. To significantly grow the market, the industry will need to achieve much lower production costs for quantum dots, while maintaining strict control over quality and uniformity.
Major Market Segments
Life Sciences. The life sciences industry is one of the early areas for adoption of quantum dot technology, especially for “stand-alone” quantum dots used in fluorescent markers in diagnostic and therapeutic applications. This includes the use of quantum dots for marking (illuminating) particular cell types or metabolic processes for understanding diseases and conditions as well as the use of quantum dots to act as delivery agents for drug treatments or therapy for a wide range of ailments. The fluorescent qualities of quantum dots provide an attractive alternative to traditional organic dyes in bio-imaging procedures and are able to image a number of different color wavelengths simultaneously. Quantum dots are able to withstand irradiation from high powered microscopes for longer periods than organic dyes, and have been widely adopted in the bio-imaging sector. Applications in the life sciences field are expected to further increase as quantum dot performance vs. conventional fluorescing material and organic dyes continues to be proven. Quantum dots offer a host of benefits when compared to organic fluorophores such as biological dyes, including:
Increased photo-stability
Longer shelf life
Resilience to photo bleaching
Increased sensitivity
Narrow emission peaks
Broad excitation profile
Multiplexing capability
QMC is currently the only company capable of producing highly uniform tetrapod quantum dots. In addition QMC has developed the technology required to produce TQDs with very narrow emission peaks as well as TQDs with dual emissions. Both of these features are highly desirable for a broad range of life science applications. Management believes its licensed patented chemistry and patented continuous production process will enable QMC to produce TQDs in volume and at a price point that will make them a very compelling choice for these applications.
Optoelectronics. This market is comprised principally of quantum dot displays (QDD) for televisions, computers, cell phones, PDAs and various other applications. A QDD provides better optical performance when compared to cathode ray tubes (CRT) and conventional liquid crystal displays (LCDs):
50 to 100 times more brightness in comparison with CRTs and LCDs
pure colors due to size tunability and narrow color-band frequency emission of the quantum dots
significant energy savings, with power consumption being 1/5th to 1/10th that of an OLED or LCD displays
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Sony, for example, has recently launched its first televisions using quantum dots to enhance the picture quality and power efficiency of its products. It is expected that quantum dots may also be used to improve the performance of other optoelectronic devices and lasers and optical components used in telecommunications.
QMC is currently the only company capable of producing highly uniform tetrapod quantum dots. In addition, QMC has developed the technology required to produce TQDs with very narrow emission peaks as well as TQDs with high quantum yield (high brightness). Both of these features are highly desirable for a broad range of display applications. In Management’s experience, TQDs are far less likely to aggregate due to their unique shape. Aggregation typically leads to self-extinguishing of the quantum dots, resulting in loss of emissions. This resistance to aggregation by TQDs results in the need to use fewer quantum dots in optoelectronic applications to achieve the same performance levels. It also allows TQDs to achieve higher optical densities. Management believes its licensed patented chemistry and patented continuous production process will enable it to produce quantum dots and TQDs in volume and at a price point that will make them a very compelling choice for these applications.
Lighting. In the lighting market, quantum dot LEDs have begun to be commercialized in 2013, with significant R&D occurring among manufacturers of solid-state lighting. While companies have launched quantum dot LED lamps, the current market for quantum dot LED lamps and the other lighting products is still very small. The Company believes quantum dot based lighting will be the best replacement for currently available compact florescent lighting (CFL) and LED lighting, as quantum dot technology provides better efficiency and high power intensity, and the ability to tune the light spectrum to emit light that is the most pleasing and/or appropriate for the application.
As stated above, QMC is currently the only company capable of producing highly uniform tetrapod quantum dots. In addition, QMC has developed the technology required to produce TQDs with very narrow emission peaks as well as TQDs with high quantum yield (high brightness). Both of these features are highly desirable for a broad range of lighting applications. For lighting applications, narrow emission peaks is a key feature that is necessary in order to produce a highly tuned light source. In Management’s experience, TQDs are far less likely to aggregate due to their unique shape. Aggregation typically leads to self-extinguishing of the quantum dots resulting in loss of emissions. This resistance to aggregation by TQDs results in the need to use fewer quantum dots in lighting applications to achieve the same performance levels. It also allows TQDs to achieve higher optical densities. Management believes its licensed patented chemistry and patented continuous production process will enable it to produce quantum dots and TQDs in volume and at a price point that will make them a very compelling choice for these applications.
Solar Energy. Quantum dots are capable of producing energy from a broad spectrum of solar and radiant energy, including ultraviolet and infrared frequencies. They have conversion potentials of approximately twice that of conventional solar cells, and can be developed out of a variety of materials. Applications are being developed to “print” highly efficient photovoltaic solar cells in mass quantities at low cost. Management believes that quantum dot solar cells and panels will be the next evolutionary development in the field of solar energy, and that commercialization will begin in 2016.
Management further believes that the increased conversion efficiencies of TQDs, its low cost continuous production method and the screen print technology obtained under the UA License will permit QMC’s subsidiary Solterra to offer solar electricity solutions that can compete on a non-subsidized basis with the price of retail electricity in key markets in North America, Europe, the Middle East and Asia.
Other applications. Current and future applications of quantum dots may impact a broad range of other industrial markets. These potentially include computing and memory, improved thermoelectric components, security applications such as covert identification tagging, biohazard detection sensors and other uses. Quantum dots have the theoretical potential to enable batteries to increase charge capacity up to ten fold, reduce re-charge cycle time by half and double usable life by replacing the current graphite anodes with silicon quantum dots.
The Company intends to position itself to provide lower cost, higher volume, higher quality QD’s & TQDs that will benefit from one or more of these potential market trends.
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Business Development Overview
In the past year, the Company has entered into an increased number of non-disclosure agreements (“NDAs”) and sample supply agreements with a several product manufacturers in different industries as well as universities and independent research laboratories. In most cases, the NDAs with manufacturers are for exploring joint development of specific products in the liquid crystal display (LCD) and light-emitting diode (LED) industries, solid state lighting industry, life sciences and for quantum dot adaptable printing equipment and other new technologies. The focus of the Company is on those sectors of the market in which utilization of quantum dots will have a transformational effect on the quality of end use products and their performance. The Company believes that its advantages in delivery of high quality, high performance quantum dots and TQDs (utilizing the chemistry under the Rice Licenses), patented continuous production techniques and screen printing techniques (to which it has exclusive rights under UA License) make it an attractive supplier to these markets.
Current Position
For Quantum Materials Corporation, our recent achievements are bringing us closer to our goals. In July 2013 we moved into new offices and wet labs at STAR Park, in San Marcos, Texas. Shortly after that we began production of tetrapod quantum dots and shipped TQD samples to some waiting potential clients.
In Summer 2014, we welcomed our first automated production system and have scaled its original 2 gms/hr to 25gms/hr with expectation we can subsequently further scale this system type to 100gms/hr in the early part of calendar 2015.
The advantages and benefits of our automated production are:
Large scale production from one workspace;
Less manpower and time needed for cost savings;
Economies of scale leading to lower costs;
95% production yield for less defects: less processing;
Improved quality control for higher uniformity; and
Assurance of backup systems for continuous supply.
Shipping Samples to Potential Clients
As a result of our automated production system, we have increased our rate of shipping samples to potential customers and we have delivered more than two dozen shipments.
To our knowledge this represents the first shipments of automated production, not manual “batch” production. Our volume production process assures our clients that we can deliver high volumes of quantum dots for industrial use.
Industries or uses intended include – Displays, Lighting, Biotech, Anti-counterfeiting, Sensors, Solar, Paint, and Coatings.
For the most part, our shipments of samples are to client’s specifications, and for others, these samples are preliminary shipments for evaluation for secondary purposes as we collaborate toward the development of their specific quantum dot enabled product.
Today we have a very active pipeline of potential clients that grows daily. These potential clients require a broad range of nanomaterials from relatively simple Red emitting quantum dots to both near and far Infrared emitting Quantum Dots, Thick-Shell Quantum Dots and/or Non-Heavy Metal Quantum Dots. Industries or uses intended include – Solid-State Lighting, Hydrogen Conversion, Displays, Solar, Automotive Glass and BIPV films, Batteries, Lasers, Biotech and Inks.
Eleven of the twenty-four potential clients have already had one or more face-to-face meetings with company management.
To maintain control of quantum dot production and quality, the Company’s preferred business relationship is a joint venture that evolves from a collaborative development effort where the parties agree to cooperate in the design and production of a range of new end products utilizing the Company’s Nanomaterials and/or screen printing processes, with the other party contributing industry expertise and substantial marketing, distribution and sales capabilities. In most cases, the Company envisions that the industry joint venture party would provide the financial resources to underwrite the project. In some cases, the joint venture may need to seek outside financing for the commercialization phase of the project. In either case, the Company would continue to control the production of the nanomaterials for incorporation into the end products.
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Alternatively, the Company may choose to license a manufacturer of end products to incorporate the Company’s Nanomaterials into one or more specific products on an exclusive or non-exclusive basis. In some cases, it may be appropriate to dedicate an equipment unit to a single product line (for example, silicon nanocrystals for energy storage) for a single licensee, whether sited at the Company’s facilities or at the facilities of the licensee. In all cases, the license would contain provisions restricting the use of the Company’s technology and protecting its intellectual property.
In advancing these development activities, the Company follows a disciplined process to protect its intellectual property and foster collaborative arrangements. First, NDAs are entered into, followed by sample agreements. The Company then formulates, manufactures and supplies product samples to the counterparty’s specifications for evaluation and testing. If successful, this then leads to discussions on the form of a possible commercial relationship. Each step takes time, and the Company is increasing its sample production capacity to satisfy the backlog of requests for its materials of different compositions. Sample production is currently accommodated through use of the lab facilities at the Company’s Wet Lab described below.
In seeking to expand its customer base, the Company’s marketing strategy will be to engage in joint ventures or other strategic arrangements with manufacturers and others to jointly develop applications using its patented continuous production process and licensed screen printing technology to maximum effect. Such joint collaborations will involve the Company working closely with the industry counterpart to optimize the performance of the Company’s materials in each application or device, and to use the results from product development and testing to further enhance product specifications to meet the requirements of the market. These collaborations will support the Company’s internal research and development activities, which will continue to be a primary part of the Company’s business. The principal revenue streams for the Company are expected to be from (i) sales of Nanomaterials, (ii) royalties from sales of products and components by third parties incorporating the Company’s Nanomaterials, (iii) milestone payments under joint development arrangements with product developers and manufacturers, and (iv) sub-licensing fees where the Company engages in sub-licensing arrangements for its technology.
As of this date, the Company has not entered into any formal commercial joint ventures or licensing agreements, but has executed the following array of agreements and taken the following steps toward commercialization of its Nanomaterials in various market sectors:
Product Manufacturers
Universities,
Researchers, Other
NDAs 26 13
Sample Agreements 8 2
Initial Samples Delivered 8 2
Commercial Discussions Underway 21 5
However, there can be no assurance that the above activities will result in sales of the Company’s products or that such sales will result in profits to the Company. See “Risk Factors.”
The Company’s existing business development team is led by its director of marketing, who handles the North American, U.K. and European Union markets, supported by two staff employees responsible for Asia and the Middle East, respectively. The Company’s marketing and sales capabilities, considered to be critical to the success of the business, will also be expanded with the recruitment of one additional full time person during the next twelve months.
Operational Overview
The Company has recently entered the commercialization stage of its business with the launch of the Wet Lab in July, 2013, its first permanent facility. The Wet Lab is located in San Marcos, Texas, approximately 30 miles south of Austin, Texas. This facility is part of the Star Park Technology Center, an extension of Texas State University, the fifth largest university in Texas and one of eight Texas Emerging Research Universities. This arrangement provides the Company with the opportunity to expand its operations within this 30 acre technology park. The Company has a year to year lease agreement and the option to add additional lab and office space on an as-needed basis. This location provides the Company with convenient access to an experienced faculty and specialized laboratory facilities that can support joint research and development efforts with Texas State University, and is in proximity to a number of leading companies in the life sciences, lighting, solar and electronics markets.
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The Wet Lab will be the center of operations of the Company and will be used by the Company to produce small sample quantities of Nanomaterials as well as larger quantities of Nanomaterials via its patented process for supply to research facilities, customers and potential customers, and potential development joint ventures. The facility is used to support test production runs, to fine tune the characteristics of the materials for optimized performance in the customer's specific application, and for continued R&D activities. The Wet Lab was established through funds raised in a private placement of common shares of the Company completed in early June 2013.
The Company has established its first continuous manufacturing process at the Wet Lab and can now produce kilogram volumes of Nanomaterials for supply to customers on a commercial scale. This first unit is being used to validate synthesis protocols for customized materials development to meet customer specification and is also being used to produce samples and is capable of fulfilling small to medium-size orders. The Company has also negotiated an agreement with the equipment provider for the delivery of a production scale equipment unit capable of producing up to 4000 kilograms per year. This unit is intended to be used to fulfill large commercial orders. Subject to the Company obtaining financing for this larger equipment acquisition, the sample size and production size equipment units are expected to be delivered to the Wet Lab during the first quarter of 2015. The second unit will be commissioned and tested upon delivery, with a view towards commencing initial production runs of materials within 30-60 days after installation. While the Company plans to work extensively with this provider of equipment units, the Company owns all rights to the designs and intellectual property resulting from the development project, and could contract with one or more other competent suppliers of equipment if that became necessary.
The Company is preparing to enter the next phase of its development – production and supply of commercial scale volumes of materials to potential customers and joint ventures in order to develop a platform of initial customers in various industries. In order to finance the development of its business, including the establishment of its continuous process manufacturing facility, purchase of the second equipment unit and the expansion of its marketing and sales capabilities. The Company expects to commence generating limited revenues from the production of materials at the Wet Lab in the third quarter of 2014. Such revenues are expected to be modest at first and will be dependent upon the Company generating purchase orders from potential customers currently under NDAs and evaluating the Company’s technology. As part of this strategy, the Company has engaged in discussions with numerous target customers and has signed a number of NDAs and Sample Agreements to increase the probability of receiving firm orders from one or more of these entities.
The Company’s ongoing research and development functions are considered key to maintaining and enhancing its competitive position in the growing nanomaterials and quantum dot market. Nanomaterials and Quantum dot technology continue to evolve, with new discoveries and refinements being made on an ongoing basis. The Company intends to be at the forefront of technological development, and will focus a significant part of its efforts on this, as it has done historically. Continuing R&D activities at the Wet Lab will be an important aspect of the Company’s strategy, as will the Company’s collaboration with Rice University, University of Arizona, Texas State University and the numerous research centers and departments with which the Company has relationships.
The key assets of the Company are its patents, high volume process equipment, licenses and other intellectual property rights, its knowhow and the expertise, capabilities and relationships brought to the Company by its management team. The Company will continue to develop its intellectual property portfolio and licensing rights. The Company is also working closely with numerous universities and public and private labs to develop and expand its intellectual property portfolio. As the business progresses, the Company will continually build out its portfolio of owned and licensed intellectual property, and take all appropriate steps to protect these rights.
The Licenses with Rice and University of Arizona include provisions for milestones and milestone payments. To date, these have been paid as agreed, waived and/or extended by both Rice and University of Arizona, respectively, illustrating the support each university has given to the Company as it has attempted to advance its business with measured resources. As the Company moves forward, it expects to be able to meet all payment and other obligations under the Licenses, and the Company’s funding strategy takes account of these requirements.
The business of the Company is subject to various types of government regulations, including restrictions on the chemical composition of nanomaterials used in life sciences and other sensitive applications, and regulation of hazardous materials used in or produced by the manufacture or use of quantum dots. Management believes that its patented technology, licensed patented chemistry and proprietary manufacturing process allow the Company to comply with current regulations by producing nanomaterials and by using environmentally friendly solvents, which are nevertheless contained and recycled in the production process. However, new regulations or requirements may develop that could adversely affect the Company or its products in the future. See “Risk Factors.”
I think Free and Hawk got burned along with you. Free was every bit as upset as me and going at it with the Skwyerz proponents. Hawk said it was the biggest mistake he ever made before he passed. SE is a different story (like the other solar-solartech); just psueudonyms for this board; they laughed all the way to the bank spewing really obvious bullshit at every stage. . Lamstein is still bullshitting in the boiler room under new pseudonym J the third. I doubt you'll see the solars again. Counting on Skwyerz to be a productive member of society is not a good bet.
Solar_Express
Re: A deleted message
Friday, February 12, 2021 11:42:51 AM
Post# 97829 of 104375
See ya in 2025
Network deals for HAD.
More bait and switch deals, contracts, and partners? It's not like United Con Artists doesn't have a long, long history of those. Must be because you won't have to pull out the more testing bullshit and phony FDA requests for a few weeks to kick the can down the road covering up the fact this failed FDA scrutiny.
Didn't they have industry disrupting blue dots for displays a while back? How did that milestone work out and why?
What were the OS then vs now?
GLTA
Merger, buyout, or pushing product together?
GLTA
Good to see Jason holding the line so far. That will help greatly when news comes.
Question is, does he have his own interests at heart? He created a lot of buzz early on and has a lot riding on doing something with HAD. His reputation is going to take a hit without doing something here which will affect any future endeavor. Even if he is apathetic towards shareholders, that shouldn't affect his business dealings. He had/has a lot of other plans besides this. So he is as stuck as shareholders. The filming seemed to come out of nowhere last August. Hopefully, completed contract announcements come when we least expect it.
Sell my stake? Get real man, what’s another 15 years holding this bag.? I can hang on. Don’t y’all know Blagman has our best interest at heart. To the moon right?
Maybe more dead than scam now. No formal activity I can tell.
What news is being expected here?
I missed it. Buy or sell? Amount?
How are the clinical trials coming along?
Amazing how long the S-1 is taking. Didn't Lamstein say it would be done at the end of (I forgot what year) 2021? Didn't our Amber say it would be at the end of last year? Gee I wonder what could be the holdup?
I post facts with links and get threating PM's in my mailbox by the many, many countless of dozens. Ponzi Scheme operators do not like facts, common sense, or common logic. It interferes with con artistry. But hey, when you have clowns trying to convince you companies with total sham products, no revenues, conduct no business, and issue laughable bullshit PR's with no basis in reality and are totally unverifiable are worth $5+, you know you've got a scam for suckers.