Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
In the Meet the Investor call before Christmas, BT clearly said that they're holding back on action against others so that their very limited resources didn't become over stretched.
So regarding near term value, there are supply agreements that have been signposted; and secondly Nanoco (and Mintz) have both the legal experience, funding, IP validation and time to pursue others, who will not have the financial resources and appetite for a big costly legal fight that they'll almost certainly lose.
BT said the settlement would be transformational and a lot of people are attaching him for the outcome with Samsung. It should be remmebered that the entire Nanoco board and their advisors would have agreed that the Samsung settlement was the best course of action, bearing in mind the wider picture of nanoco's pipeline and other legal action thay're planning, which is not public information for the rest of us.
I suspect that after the dust settles and the first payment from samsung arrives, they'll enter a new planning phase where they likely:
- reassure potential customers of their IP and supply validity (ie Nanoco is fully funded and stable), to get orders over the line
- will invest in further research to ensure they're at the forefront of the QD/nanomaterial field for decades to come
- invest in business development and marketing headcount to broaden customer relationships and win more business
- prioritise legal action based on risk and ROI, which could give immediate short term value
- this will likely be a cash positive business (even excluding Samsung settlement payments) paying a regular dividend from 2024 onwards, which will attract a whole new category of investor.
The next investor meeting/BT interview will be very informative, something I'm loking forward to.
Although diappointed with the numbers in the settlement, I'm very happy to hold as this could well be a multi-bagger before the end of 2023 and the future beyond that looks very bright IMO.
I now see two areas of short term value.
The first is obviously commercial orders that are already in the pipeline, and could be announced literally any day, particularly now that their future viability is assured.
The second is settlements with other offenders which could be announced very quickly.
Nanoco have taken on the largest player in the market and won. It’s clear that there are others who are infringing on their IP and Nanoco have heavily signposted that they’ll be targeting others next. Nanoco have an experienced legal team in place who have already completed the background research and preparation for the arguments. They’ve validated their IP at PTAB and by forcing Samsung to settle. They also have the funding to take legal action alone and don’t need funding, which is more cost effective. They’ll likely approach offenders to start discussions, offering favourable terms to settle for past offences in return for forward royalties and compliance, which they’ll likely accept to avoid costly legal action against a viable, determined and well funded Nanoco. This could happen very quickly, in a period of a few months.
$90m / £70m net to Nanoco is 22p /share. The current share price places virtually no value on the core business, it's IP, pipeline and commercial deals that could be announced imminently, or potential value from legal action against other infringers (heavily signposted several times in the RNS).
There are a couple of references to defending IP and Other Infringements. Suspect with this experience and money in the bank, Nanoco will now target other less wealthy offenders, like Nanosys. I’m guessing without the deep pockets of Samsung, that will be much easier.
Also, the settlement and funding makes commercial orders much more likely. As we’ve all read the QD market is about to explode as they become more widely adopted.
I've tried to avoid engaging in the nonsense being spewed by the de-rampers (who claim not to hold but spend all day every day attacking N's potential). If they haven't bought in yet then unlucky them.
I'm assuming that tomorrow (could be 7am, could be after 4.30), or by Monday latest, we're looking at one of three outcomes:
- all of our speculation will be answered as they announce details of a settlement, which will be transformational - £3-400m or more net to Nanoco
- they'll indicate that they're close but not together, and will apply to the court for more time (I hope not)
- we'll have an RNS stating that agreement hasn't been reached and we'll wait for a re-scheduled court date.
I'd be happiest with either the first or third outcome. I suspect outcome two is unlikely because Nanoco should use the deadline as leverage.
If a global 'patent peace' settlement is reached, I'll be very interested to see the detail, and how Nanoco can grant Samsung/Hansol unlimited use of their IP without limitation. Personally I can't see how Nanoco can safely agree to this without butchering their market, so we could see some ongoing royalty agreement (from Samsung or Hansol) or a very significant settlement number.
Fingers crossed for a huge lift in SP tomorrow, likely a multiple of where we are now.
GLA.
Hi Compass, and FlyingHigher is one of the those desperately trying to reduce the price so someone can buy. The poster claims not to hold, but spends all day making more than 20 posts a day on average, making spurious posts that others have easily rebutted.
Gigawit “the point is that royalties won’t apply because there’s going to be a lump sum settlement.”
Nanoco “Historical precedent shows that any final agreement is likely to be a one off payment,”
So not a definite, and I still can’t see how a settlement would work without royalties from someone, without compromising Nanoco’s viability.
We're running out of things to say and speculate about, but as the 30 days ticks down I've increasingly thought about how a 'patent peace' agreement and settlement would work.
Being a platform technology company with many applications across display and sensors, I just can't square off how Nanoco could let Samsung (and Hansol as their supplier) have patent peace without Samsung threatening Nanoco's business model. Could Samsung sell displays to anyone, and Hansol supply CFQDs to potential display and sensor manufacturers, competing directly with Nanoco but with more scale.
Could the agreement limit Samsung's use of CFQDs and their R&D? I suspect S would never accept this.
It would be horrific is Nanoco accepted a lowball offer with no royalties to protect against future sales and Samsung/Hansol eating their market. So the number would have to be significant (Samsung would resist this), or there would have to be a royalty agreement (which Nanoco suggested is less likely), or Samsung may make an offer to buy Nanoco.
It's a very complex negotiation where Nanoco will be understanding the implications of what they'll be giving away in return for patent peace.
Therefore, if Samsung don't accept royalties and the number isn't significant enough for Nanoco, is there a strong possibility that as 30 days approaches we'll be told that they can't reach agreement and will ask for the court to decide?