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Posted: Jan 27, 2011
Nanoco Announces Proposed Placing of up to 16.7 million new Ordinary Shares
(Nanowerk News) Nanoco Group plc announces today its intention to raise gross proceeds of up to £15 million through the issue of up to 16.7 million new ordinary shares of 10 pence each, representing approximately 8.85 per cent of the existing Ordinary Shares of the Company.
The net proceeds of the Placing will be used to accelerate Nanoco's manufacturing programme, to invest further in product development and to build its technical sales and marketing team.
Michael Edelman, CEO of Nanoco, said: "With the successful commissioning of the two Semi-Tech production lines at our Runcorn facility, announced separately today, we have proven that we are able to manufacture our unique cadmium-free quantum dots (CFQDTM) on a commercial scale. We are very excited about the future. Our planned investment in the next phase of our growth will significantly accelerate the delivery of quantum dots to our customers as well as extending our ability to develop tailored products for new and existing customers and markets. Our culture of carefully controlling cash remains."
Nanoco was founded in 2001 to progress and commercialise quantum dot technology developed at the University of Manchester and Imperial College, London. Nanoco has previously raised approximately £10 million and was admitted to AIM on 1 May 2009, following a reverse acquisition. As at 31 December 2010, Nanoco had an unaudited net cash position of £4.0 million.
In January 2010, Nanoco hired a manufacturing director with extensive experience in the speciality chemicals industry to continue the development of Nanoco's production scale-up programme. Nanoco announced separately today the successful commissioning of two Semi-Tech production lines at its new facility in Runcorn, Cheshire, with a combined initial annual capacity of 25kg per year. These two production lines are capable of producing red quantum dots on a commercial scale. Nanoco is now trialling batches for a specific customer application and expects to be able to deliver 1kg of red CFQDTM to the customer within the next few months. Once validated by the customer, this will, subject to the Company's satisfaction of certain other contractual terms and conditions, trigger a US$2 million milestone payment. The Company also anticipates shipping 1kg of green CFQDTM in mid 2011, subject to similar terms and conditions.
Through Joint Development Agreements ("JDA") with its customers, Nanoco has focused its original lab-based technology into real-world applications in the LED and photovoltaic (solar) markets, creating products which have achieved a number of technical and physical performance tests set by these JDA customers. The Company has identified additional potential markets such as QD-Electroluminescent ("OLED" type) televisions, sensors and anti-counterfeiting applications.
Use of Proceeds
Following the successful commissioning of the Semi-Tech lines in Runcorn, the Company intends to use part of the net proceeds of the Placing to invest in two further Kilo Manufacturing Plant lines, which are expected to increase total capacity from 25kg per annum to up to 150kg per annum, with the aim of having this facility commissioned during 2012.
Product and market development
In addition, it is intended to increase the size of Nanoco's R&D and technical sales teams to target other commercially attractive markets such as OLED televisions, sensors and anti-counterfeiting applications.
Intellectual property protection
In conjunction with the increase in technology and product development facilitated by the increased resources of the R&D teams, Nanoco intends to accelerate its filing of patents to further expand and protect its intellectual property portfolio.
Nanoco believes that this investment in production, new application developments, sales, marketing and intellectual property will help effect its transformation from a technology development company to a manufacturing company with a strong position in attractive markets.
Please read the full prospectus before making an investment decision.