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Posted: October 28, 2009
Quantum Dot Maker Nanoco Announces Year End Results
(Nanowerk News) Nanoco Group plc, a world leader in the development and manufacture of commercial quantities of quantum dots, is pleased to announce its final results for the year ended 31 July 2009.
Successful flotation on AIM in May 2009
Distribution agreement signed with Japan-based Kisco Ltd, a major electronic materials supplier in Asia
Supply and licence agreement signed with major Japanese LED manufacturer active in the LCD backlight and general lighting markets – a further US$8 million in milestones expected by the end of December 2010
Manufacturing scale-up progressing well
Increase in cash and cash equivalents to £6.59 million at 31 July 2009 (2008: £2.53 million)
Joint development agreement signed in September 2009 with a major Japanese electronics company in connection with quantum dots for LEDs as the backlight in LCD TVs
Commenting on the results, Dr Peter Rowley, Nanoco’s Chairman, said:
“The current financial year has started well, with a new joint development agreement with a major Japanese electronics company active in the LCD TV market being signed in September 2009.
“We are making substantial progress in the scale-up of manufacturing and are well on our way to producing our first kilograms of quantum dots. Our strategic relationships are also progressing well, and we anticipate the receipt of further milestone payments during the current half.”
I am pleased to present Nanoco’s maiden financial results as a quoted company, and to provide an introduction to our world-class technology and manufacturing capabilities. Our technology has multiple potential applications in many different industrial and consumer segments. To harness this diverse breadth of opportunities, we have chosen a collaborative business model through which we already have revenue-generating relationships with global companies.
Before discussing our strategy, I would like to give a brief summary of our technology, quantum dots, in which we have a strong global position.
Quantum dots are nano-sized particles of semiconductor material, each being around eighty thousandth of the width of a human hair. At this size, semiconductors develop a new property: the ability to emit intense light of a very specific colour, with the colour dependent on the size of the dot. These dots can be stimulated to fluoresce through excitation by light energy or by electricity and have the potential to make major improvements to commonly used products, including a substantial reduction in power consumption.
The academic understanding of quantum dots is not new, nor is an awareness of their commercial potential. However, this potential has not yet been realised because of the complexity of manufacturing quantum dots in commercial quantities. Nanoco’s technology provides the solution to this problem, paving the way for quantum dots to be used in multiple applications. Nanoco has also overcome another key obstacle to the widespread use of quantum dots: the manufacture of dots that do not use heavy metals such as cadmium.
We are focusing initially on four substantial markets for our quantum dots: LED lighting, computer and mobile displays, solar cells and bio-imaging. Each of these markets represents a very substantial opportunity for Nanoco.
Our strategy is to access these markets through partnerships with major global end users, under a business model in which we receive revenues during the development phase followed by revenues from the manufacture and supply of quantum dots and additionally from a royalty payment on end-product sales.
This business model is exemplified by our partnership with a major Japanese corporation, which manufactures LEDs for the LCD display and general lighting markets. Following a successful joint development agreement with the corporation under which we received a total of US$1.2 million, a supply and licence agreement was signed in November 2008, which included a US$2 million upfront payment and from which a further US$8 million in milestone payments is expected by 31 December 2010. A royalty of 5 per cent will be paid to Nanoco on the net sales of the corporation’s resulting products.
The use of LEDs as the backlight for LCD displays and in general lighting allows a substantial reduction in the power consumed. Quantum dots offer key advantages over the phosphors currently used to create white light from LEDs including superior colour performance. The potential market is considerable.
Further details of our technology and target markets, and of the progress made in our commercial relationships, are included in the Chief Executive Officer’s Review of Operations.
In way of background, Nanoco was founded in 2001 from technology developed at Manchester University and at Imperial College, London. Nanoco made significant technical and commercial progress as a private company, including the signing of distribution agreements with Kisco, a leading Asian electronic materials and trading company, and Sigma-Aldrich Corporation, the world’s largest supplier of research chemicals.
Flotation on AIM, via the reverse takeover of a cash shell, was one of the Company’s key milestones during the year to 31 July 2009. This transaction strengthened the Company’s financial resources for use in the continued development of our quantum dot technology and in the formation of further strategic partnerships. Nanoco shares began trading on AIM on 1 May 2009.
Our revenues in the year to 31 July 2009 were £1.99 million (2008: £1.08 million), comprising primarily of milestone payments from strategic partners but including some income from the sale of products by our distribution partners. The loss before tax was £0.78 million (2008: loss of £0.70 million). Cash, and cash equivalents, at the year end were £6.59 million (31 July 2008: £2.53 million).
Nanoco has a team of 41 people, the great majority of whom have PhDs in quantum physics or chemistry. As the scale-up towards the mass production of quantum dots progresses, we envisage employing further staff, particularly in production.
I would like to take this opportunity to thank all at Nanoco for their energy and hard work and for their commitment to making Nanoco a world-class company. I would also like to thank our strategic partners, distributors and advisers for their contribution to the development of the Company during the course of the financial year.
The current financial year has started well, with a new joint development agreement with a major Japanese electronics company active in the LCD TV market being signed in September 2009.
We are making substantial progress in the scale-up of manufacturing and are well on our way to producing our first kilograms of quantum dots. Our strategic relationships are also progressing well, and we anticipate the receipt of further milestone payments during the current half.
We are currently at discussion stages with further potential commercial partners, and look forward to announcing additional signed agreements with companies active in Nanoco’s core markets in due course.