Replies to post #82793 on Quantum Materials Corp. (fka QTMM)

[Kurt_Banoffee]

QMC gets the true value of the QD in the end product through royalties. That's the business plan.

If the business plan is to earn royalties that are, as you explain below, 4X the market price, it will probably be a long time before we see any revenue. LOL.

More likely the royalty is 5% on the $12/g of QDs = $0.60 - not $50.00 (which is obviously wrong since the Licensee isn't making TVs). The royalty has to be paid out of the selling price, so by definition, it has to be less than the selling price (let alone 4X the price). It also has to be paid out of the Licensee's pocket, so at some point, it becomes uneconomic for the licensee and they don't make anything.

puravida19 Monday, 10/14/19 08:11:29 PM
Re: None
Post # 78929 of 82081
Why is licensing and royalties a better sales model?

No cost to QMC. Instead Licensee's JV pays costs.
For Display market -
Let's say a 55" QD TV uses one gram of QD and sells for $1000.
Nanosys gets $12.15 for one gram of QD.
QMC gets a royalty but we don't know the rate or percent for the royalty.
To get as much as Nanosys got, Royalty would need to be 1.215%.
I don't think normal royalty rates are that low.
What's a common royalty rate for electronics?

Quote:
Royalty rates vary per industry, but a good rule of thumb is between 2-3% on the low end, and 7-10% on the high end. I have licensed consumer products for as low as 3% and as high as 7%, with 5% being the most common and a generally fair number.

Product Licensing 101: So Let's Talk Money

@ 5% royalty on a $1000 QD Display, QMC licensee earns $50.
QMC licensee earns 4X what Nanosys would earn in similar situation.

[BigE1960]

So much to dissect here

Nanosys doubled their production and the only way they could justify it was to lower their prices per gram and produce commodity priced volume.

A.) If they justified it, it was because of their cash flow and return on capital forecasts of their business plan.
B.) Based on A.) the price, whatever it is, was acceptable.
C.) QMC shareholders would be thrilled if QMC cut a "commodity" supply deal.

__________ industry cannibalizes its profits in a race to the lowest prices and smallest margins in order to compete.

This applies to every product market over its lifecycle.

Squires thinks long range and in the best interest of the shareholders

Sounds like cultist propaganda. If long range refers to his ability to maintain a lifestyle into retirement, than okay. Believing that QMC makes decisions that are in the best interests of the shareholders is contradicted by the facts. FACT: It is in the best interest of the shareholders for QMC to file their financial reports on time. FACT: It was not in the best interest of the shareholders to make an announcement about a deal with Freschfield. FACT: It is not in the best interest of shareholders for Squires to keep granting himself millions of shares, unless in the best interest of shareholders you mean Squires as the shareholder. (Should I keep going or just let others pile on?)