Member Info for Nanonano

TW I said that the AVP looked like the most likely candidate for QD enhanced infrared chips, especially beating in mind the prior relationship and the suggestion more than once that low volume use could be a VR/AR headset, plus the performance specs of the unit. I also said I could be wrong and that if they weren’t in that then I’d have some real concerns for the commercial viability of Gen 1 as I could not see lead sulphide making it into a handset of any manufacture, and certainly not one made by Apple.

I’m just thinking where they’ll wield the axe.

The board has previously been rationalised with the merging of CFO and COO, can it be trimmed further?

Most of the company staff are research scientists, as the production is by their own admission not hugely labour intensive. I think since the settlement they’ve taken an additional ten people or thereabouts, and only a couple of those seem to be production based plus one or two admin and IT. The others are lab techs and device physicists.

This is a company that has always been very economic with information. They use ambiguous language to disguise the real value, or they just refuse to disclose at all. That doesn’t build trust. I became considerably more bearish after the interims when it became clear that they had far less interest from sensor companies than was shown to be the case just a few months before, and that beyond the Asian and European customers those deals were for tiny volumes anyway.

Information that a device was not in production yet was a further surprise. In addition there was no sign of a display customer (and still isn’t) that had been touted in 2023.

I think three years is optimistic for the Asian deal. With a much tighter budget I believe this will slow down development unless the customer wants to put some more cash in and accelerate the process (think this is unlikely). So I think the company may have to look at downsizing significantly unless they can net a few million in the next six to twelve months.

It is the responsibility of the board to manage risk, and they haven’t done this well. The whole board should be relieved of their positions, Chairman, CEO and CFO, the CTO gets a pass as he’s dealing with the tech not the finances.

With regards to LOAM, when they own (owned) almost a third of the company, that holds significant influence. So regardless of whether they were acting on inside information or not, they certainly would have had a great influence on the choices made by the Nanoco board.

They’ll almost certainly have to trim costs regardless of which course of action they decide to pursue. They can’t afford to dither either.

AFAIK, the amount of sensing customers now is one

The company management had information that investors didn’t. So for instance out of the companies they were working with on sensor materials only two were of any value, the others were simply regarded as too small to be worth bothering about- that information was not conveyed until they were dropped and questions were asked.

Then we have the situation with display. Validated IP, but no income at all. What has become of the major OEM that we were going to be supplying this year, all gone quiet on that front it seems.

8 or 9 customers were mentioned in the July presentation last year.

They should have retained the cash from the settlement until they had a good couple of contracts for recurring revenue under their belt. Instead they handed the cash to LOAM with the tender offer in order to secure their positions for the foreseeable future.

The way it handles that risk is though.

It’s 20 months since the settlement, how many orders has Nanoco filled in that time- one, with the company that has now walked away.

No further licensing deals or supply to the display industry either. They turned away smaller orders last year, only interested in the big numbers, small stuff not worth their while.

I think this is going to go one of two ways. Either they find a buyer, or they run down the cash until it’s game over, then the IP is bought cheaply and shareholders are left with a shell company that’ll be worthless.

Lol that’s pretty desperate stuff TW. Perhaps you ought to message Jean-Marc Chery to ask him if he fancies jumping ship and taking on BT’s position.

Really don't think this about cost-cutting on STMicro's part. There's more to this.

I think they've been trying to fill that Senior Device Physicist vacancy for about eight months now, not exactly surprising when you see the salary they're offering. that demonstrates how quickly time can slip by.

Well I think taking a low settlement and then handing more than half back to the markets wasn't sensible when you only have a single customer who has turned out to be unreliable.

BT is on his bike now so he won't care- someone else's mess to sort out.

Even assuming they do, how will they achieve that in under two years, get validation and find a market, bearing in mind the speed they've worked at up until present.

Short of a miracle I find it hard to see any options beyond either a huge cull in the workforce, which will limit their capacity, or a sale of the company. Brokers are leaning towards the latter option.

Yes but we need to know why.

If demand was low for Gen 1, I can understand that because of the use of lead, but Gen 2 is not lead based, so why have they cancelled that too?

Independent analysts like Yole said in their reports that STMicro were likely to be a major disruptor in SWIR sensors in the consumer market, so it seems strange to me they have conceded that to a competitor in what could be a multi-billion pound/dollar market.

Perhaps they have looked carefully at Nanoco patents and reasoned that by the time the tech is ready for market key patents may make it non-exclusive and they can find another cheaper supplier and save themselves the development costs? Or perhaps there are just too many problems with the tech, although this seems strange bearing in mind that got through to the final validation phase.

The 'narcissist' term is getting rather tiresome, how about giving some views on how you think this company is going to turn things around, bearing in mind they no longer have sufficient cash to make it through to commercialisation with the Asian customer.

Even the brokers are giving some pretty pessimistic projections, I suppose they're all narcissistic too?

There are a few things that really stink with STMicro.

For starters they worked closely with them for over six years, so they'd have a very good idea on the materials strengths and limitations and should have had a good idea what and where the market is.

Back in 2019 Nanoco were limbering up for production only about 18 months or so into the contract. Why then did it take years to get match fit for STMicro?

In addition STMicro then seemed to drag their heels for a year in finally validating the materials- Nanoco seemed ready to roll back in mid-2022.

Now naturally it's a CEO's responsibility to mitigate risk and to look for other customers, but there doesn't seem to be a lot of call for CFQD or infrared nano materials at this point in time.