Member Info for LordWM

Welcome onboard if the tasty buying this morning is from new investors who have just learned about this incredible opportunity.
This board has contributed vast research across many areas of Nanoco’s legal action against Samsung and wider commercialisation of Nanoco’s patented QD platform tech, including the legal side, timescales, strategy, risk and potential awards. Please scan back through the comments over the past 3 months, and post any questions on this board.
I’d start by viewing Brian Turner’s presentations from the start on this year, which you can find in the Investors section of Nanoco’s website.

That would be $40ish per display sold.

@jbongo, if that’s $500m purely for past sales in the US, then that’s awesome. Add an wilful infringement multiplier, an award for future sales, plus global sales which are greater.

Part 2:

- If this goes to trial and N win, and there's no settlement, N will immediately start further action in Europe (already started in Germany a couple weeks ago - https://polaris.brighterir.com/public/nanoco/news/rns/story/w9e1o1r) and elsewhere to secure injunctions preventing S from selling their offending products in those territories. This will be very harmful for Samsung, makes a settlement more likely.
- BT has said (see earnings call video) that any settlement will have to be for global sales (past sales - more than 31m units and future sales - 10m annually and growing, for the life of the patents) and must reflect the value of N's tech/patents (see below).

Legal Action
- Between 20 and 50% of any award will go in legal fees (20% for a high award, 50% for a low award)

So to your question….

Global Settlement (assume figures in £ for simplicity)
Low end - £10/display
Past sales - 31m x 10 = £310m
Assume 30% in legal fees (as this is for a global settlement, not just US sales) - £93m
Net award - £217m
322455744 shares in issue - £0.67 per share

Future Sales - assume 10m annually x £10 = £100m
This is a revenue stream, so apply a conservative x6 multiple = £600m
322455744 shares in issue - £1.86 per share

So a pessimistic £10 per display settlement, for pessimistic past and future displays should put the share price at £0.67 + £1.86 = £2.53 per share

Change the award to £20/display, using the same model and the number changes to £5.07 per share.

Note: there would be no wilful infringement multiplier for a settlement, but it’s possible that Nanoco could negotiate for Samsung to pay for/contribute to legal costs as part of the deal, which would give more upside

US Trial win – past and future display sales in the US only.
Low end £10/display
US past sales – 12m x 10 = £120m
Wilful infringement multiplier of 1.5x = £180m
Assume 50% in legal fees - £90m
Net award - £90m
322455744 shares in issue - £0.28 per share

Future Sales – assume 4m annually in the US x £10 - £40m
This is a revenue stream, so apply a conservative x6 multiple = £240m
322455744 shares in issue - £0.74 per share

So a pessimistic £10 per display US trail win, for pessimistic past and future displays should put the share price at £0.28 + £0.74 = £1.02 per share

Change the award to £20/display, using the same model and the number changes to £2.05 per share (US sales only).

A US court win excludes the ROW sales, so as mentioned, Nanoco will take legal action, secure injunctions and Samsung would then have to settle…

So the numbers are compelling, if…….Nanoco win in court. We’ll know the outcome within 2 weeks, sooner if Samsung cave and settle.

This excludes other potential commercial orders for sensing products, which are potentially imminent – see earnings call.

As always DYOR.

@Fre1
Awards have been discussed a huge amount over the past 6 months, the truth is it's difficult to predict because there are many variables, so you'll always get a groan when asking this question.

N are refusing to speculate, other than say a transformational amount. Analysts have suggested $3-$500m, but it's unclear what this is for (ie does it include an award for future display sales, does it include OEM sales, is this net of legal fees, etc).

Likely award per display
This is partly where the uncertainty comes in.
I think it's pretty much assumed that the worst-case minimum will be $8 per display, which is the lowest figure I've seen mentioned anywhere. However, if this number was ever discussed in the early days when S&N worked in partnership (before S dropped the relationship and allegedly stole N's patented technology), it would have been in return for a reliable cash payment, with Dow manufacturing the QDs under licence (ie – cash straight to Nanoco's bottom line).

Conservative estimates are between $8 and $20 per display. However, N have damages experts (that S tried unsuccessfully to remove from the trial) who will argue that QDs (which can only allegedly be developed at scale using Nanoco’s patented methods) are an enabling technology that help justify the premium price point for Samsungs top end QDTVs.

The price differential is $800-$1000 between Samsungs QDTVs and their next most premium TV product, that don’t contain QDs. Also, S branded them as QD TV’s, (“Samsung’s quantum dots, however, are cadmium-free.” - https://news.samsung.com/global/why-are-quantum-dot-displays-so-good).
Apparently, there are legal precedents which give awards involving sharing the profit uplift if it involves an enabling technology that has been infringed. This is where the very high figures of $100 per display or more are talked about. It’s clear that N’s lawyers will argue for this, but many people are sceptical that this type of award will be given. I for one will be retiring immediately if this happens….

Here's what we think/know (please correct if wrong, note these are deliberately pessimistic):
Global display sales to end of 2021: US - 12m, ROW - 19m, Total global - 31m.
Note:
- sales are accelerating, likely at 10m per annum for 2022 and growing.
- Samsung are likely preparing to use QDs in many other types of product, they’re committed to using CFQDs and have built manufacturing capability accordingly – they can’t just change this strategy.
- this excludes sales in 2022 up to trial date, let’s use this as margin for error.
- Samsung sells displays to other TV manufacturers, which I believe are not included in these figures.
- the Texas trial is for US sales only, so any court award will be for US sales to date and the court may award a licence fee for future sales in the US (if not N will take separate action for this).
- If this goes to trial and N win, and there's no settlement, N will immediately start furt

Wow, looks like this could be the last opportunity to get in at a decent price.
A good rise today will get coverage, draw more attention to the trial dates.
A settlement could come at any time...
As rampers often write on boards of junior minors who are drilling an exploration well............ I wouldn't want to be out of this over the weekend! (there, I said it).
Good luck all.

It's nearly show time, just over a week to go before trial - very exciting.
If S want to avoid trial, this is the time they'll be putting their most realistic offers on the table and trying to negotiate. These with be without prejudice conversations between S&N legal teams so we'll never hear anything about it unless an agreement is made. This could happen any time up to Monday morning on 12th Sept. It's the time of maximum pressure for Samsung and the most likely time that a settlement will be made, if S feel they're not likely to win in court.

Unless a settlement happens, I'd expect more selling by large holders, possibly even during trial week. The trial is likely an existential event for Nanoco - if they can't defend their patents, will anyone place a commercial order. Possibly, but probably not.
For small PIs like us, we're (hopefully) only playing with money we can afford to lose and are OK with the (hopefully small) risk vs massive potential upside.

Even if major shareholders are 80-90% confident of a Nanoco win, they still have to account for the risk of a potential loss, and will take some money out now. They're still holding a significant amount, if they thought Nanoco would lose you'd see huge unloading, which isn't happening.

Regarding other commercial orders, it could be that other customers and holding to see if Nanoco's patents are solid and enforcable before committing. If Nanoco win, anyone who wants to use CFQDs using Ns patents will know they need to pay for it.

Good luck all, stay strong.

Once again, for huge holders like Lombard this is standard de-risking, wouldn't be surprised if there was a little more selling before the 12th.
The court case is probably viewed as a binary assesment of Nanoco's viability. If they win in court (as we all suspect they will), there will be a huge payoff. If they lose and are unable to defend their own patents, will anyone place a commercial order with them? Probaly not.
For a large holder like Lombard, even if they suspect a win is likely, it makes sense for them to take some profit off the table and hedge against the unthinkable. They'll still win big if (when) we win in court, or if there's a settlement beforehand.
It presents a great entry point for new investors, or for those who haven't put too much in already!

I think we all suspect it was the Samsung legal team and not the marketing team who led the recent move to drop QD from their QD-OLED tv descriptions:

‘Initially, it seemed that Samsung would just avoid using the term OLED at all, with an early post about the new screen technology on Samsung's website (opens in new tab)referring to the organic material as the " blue self-luminescence layer" and eschewing the QD-OLED label entirely, favouring the slightly clunky term 'QD Display TV' instead. The company has since done a complete 180 and is unexpectedly embracing the term OLED, without the differentiating QD. What's in an acronym anyway? ‘

https://www.whathifi.com/features/qd-oled-tv-everything-you-need-to-know-about-the-game-changing-new-tv-tech

This is incredible, the stakes are soooooooo high for Samsung!
They'll be desperate to get a global agreement with Nanoco covering all products, supply chain, customers, etc. Their usage and plans for QDs across a range of products is so vast. I suspect they're proposing very low/unrealistic licence fees.
I hope Nanoco are holding firm, and I hope that Samsung are terrified of this actually going to court.

Large holders have to manage risk and will always take profits/de-risk.
Doesn't affect the investment case.
All we need to do is win in court!

@becontrarian it says to me that Samsung are not realistic regarding settlement offers. Nanoco are signalling that they’ll go all the way if Samsung don’t start making realistic offers quickly. This will be a very exciting 4 weeks (and a nervy 4 weeks for S)

The question marks were meant to be rocketship emojis, didn't work so feel a bit silly now.

"the funder of its current legal action against Samsung in the US has agreed an expanded budget on similar commercial terms."
Would the legal partner agree to start further action in Germany (at their own risk) if they weren't completely confident about a win in Texas?
Again, this says to me that Samsung are way off the mark with any settlement discussions and need to have a fire lit under them.
??????????????

@BeContrarian - I feel sure there will have been discussions around settlement, but this suggests they're way too far apart at the moment and Nanoco want to pile on the pressure. We could be going to trial after all!

All we need now is for BT to announce a commercial order pre-trial!
If that happens I'll definitely get thrown out of the next AGM for trying to kiss him :)

This is amazing. They wouldn't do this unless supremely confident about the US case, as stated in the RNS.
This will pile the pressure on Sansung to settle for a realistic amount.
What an exciting few weeks we have ahead of us!

Wow, I started this thread yesterday, just looked and it’s kicked off again!

I agree with most on here that we just don’t know which way it will go, but two things make me lean towards there being a settlement before trial:
1- Nanoco and their legal partners who did a year of research before committing clearly feel they have a strong case. They’ve won at every stage so far, and have put themselves in a position where they have enough runway to see this through. So if Samsung thought they could muscle the minnow, they’ve failed.
2- both sets of lawyers will be constantly reporting on the likelihood of a win in court. Now that we’re post pre trial conf, I can’t believe that Samsungs legal team won’t be saying to their client that there’s a significant chance that they’ll lose, and the arguments around losses/damages and wilful infringement are difficult to predict, so the award could be huge, maybe a significant percentage of uplifted profit the infringed technology enabled. If they lose big, not only is there a huge liability (which may be deferred by an appeal), but Nanoco will get injunctions to stop them selling QD products in other territories and also likely take action against their OEM partners and supply chain. That will be a massive headache and distraction.

There are lots of valid arguments regarding who’s making the decision within Samsung and Samsung may genuinely have a solid defence, I don’t pretend to understand the science behind this, I’m only looking at this from the commercial behaviours.

If S lose (big if), Samsung can appeal and we know they have deep pockets, but losing in court will be horrendous for them due to the disruption, and will put them in a very weak position regarding a settlement.

I’d say that between now and 12th Sept is the most likely time when a settlement could happen.

If Samsung fear a trial, they’ll negotiate and reach agreement with Nanoco before then. A settlement could be reached up to the minute the trial starts.

Samsung will definitely have made offers to settle, that wouldn’t have been acceptable to Nanoco. BT saying we’re going to trial signals to Samsung that that’s where we’ll be unless they want to make an acceptable offer before.

We have no idea which way it will go and of course both sides will say they believe they’re in the right and are prepared to go to trial (although if Nanoco thought they didn’t have a case we’d never have got this far).

We have to sit and wait, but you can’t rule out either (although I think there will be a settlement before 12th).

Just profit taking/ de-risking. Heads he wins, tails he wins big.
Doesn’t affect the investment case and wouldn’t be able to do it if had access to priviledged info.