Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
I keep on coming back to the fact that we don't know with any certainty what the settlement vaue will be. Obviously we can all make guesses, and those guesses today will probably be less than they might have been before Monday's RNS. However apart from the fact that the settlement will be at the lower end of what we might have expected to get at the trial (if successful) we don't know anything for certain. In theory the net settlement could be near zero or very substantial. I suspect that our predictions of the value of the settlement say more about our personalities (optimistic or pesimistic) than anything else. I was hoping Nanoco/Samsung might expedite the process to shorten the waiting time before we find out the details but I guess that is probably too much to ask and we have no option but to wait, patiently or otherwise.
I really don't know where people are getting their figures for the value of this settlement to Nanoco from. Is everyone just guessing?
@troublesome, I don't understand your point. I am assuming the document that has been agreed so far is based on a sum to settle US sales with factors to account for worldwide sales and future sales. I suspect that one of the things they are currently discussing/working out is sales numbers to date throught out the world and best projections ofwhat future sales might be. Obviously there may be some discounting of future values but I assume both parties now want 'peace' not running battles in different parts of the world or in because of future sales. So what is the ' thing' you are asking about why they would do it?
On a point about the current title we are all using, I seriously hope we investors are not in control of the company. I expect the Board to do a much better job than we would!
Pendulums swing, as do expectations. But, however low the figure for the US sales are, I am expecting times 3 for wordwide sales and a doubling of the lot for future sales. Obviously we still have to pay the backers, pay tax etc , but it seems some people may be now pushing expectations down too low. I bought some more.
Nanogeddon. I suspect STmicro want a variety of ongoing deliverables from Nanoco. To double-cross Nanoco would therefore make no business sense. For me there are two real worry on these new materials front: (1) are the products Nanoco are to produce good enough and at the right price for purpose and (2)will there a big enough demand for the STmicro products for Nanoco's manufacturing lines to be kept well occupied. In the end here we are relying on STmicro reading the demand for their products correctly. Poor sales of their products will mean limited need for our products. But if their products are in great demand then ....
Thanks Basscadet. I was worried most of our setttlement pittance (joke!) would be needed to fund the expansion of Runcorn so no dividends special or otherwise for the longsuffering investors (I mean me! ha ha).
Now you really are joking/pulling my leg. A chat board member who trusts the CEO has got everything under control so there is no need to ask questions! That's a first!
So looking ahead, whatever settlement we get, the company's future will depend on the new materials for sensors plus possible some Display QDs. Does anyone know whether the Runcorn production line is currently capable of producing two different type of products at the same time (in quantity) or if we get both display and sensor product orders would we have to build more plant or license somerone trustworthy to manufacture for us? I thing the STmicro (sic) contract ends in May. It would be really great if we got orders to manufacture in volume rather than just anothe R&D contract. Any thoughts?
I suspect the US justice system (via the Judge) has played an important role in this agrement being reached and I am happy with that thought as I suspect the judge will keep the whole process (fairly) honest. I do however think we are now in a tiresome waiting period where we can only see a small part of the overall picture. I guess that is always the appointed lot of the small private investor, but rarely is it so obvious and frustrating!
I see no rerason to suspect insider trading. A fund has to choose a moment when there is positive buying pressure to sell and Friday was one of those opportunities. What I am interested to know is: If one fund has been selling down so agressively, who has been buying? Is it really just PIs or is there a big player who is buying who is yet to be revealed?
A lump sum is nice but all companies ultimately need income and that (other than a few research contracts) is what Nanoco hasn't yet got. News about a firm and substantial order for sensing materials could completely change the game here. And given what happened with Samsung it would be nice to be utilizing the manufacturing facilities at Runcorn rather than just seeing them rot away largely unused while depending on other companies to pay us royalties! BT talked about one material being in production this year, but so far no information on confirmation, timing or quantities. All very frustrating!.
BC, there is a lot we don't know. For exzample: the one off payment could be much lower or higher than we suspect,. But we have been told some things and we have to like them or lump them, we haven't been ask. Clearly the move to a lump sum payment for future use of certain specific of our patents rather than operating a 'royalties' pricing model is a decision that has been taken as it is clearly stated in the RNS
I don't know how this will all turn out , but we have been clearly told it will be a lump sum covering past and future. I may have misunderstood this (please someone correct me if I'm wrong) but I assume this would mean we would no longer be using a 'royalties' model for charging. So I think of it like buying a car (in Nanoco's case the process and the right to use (a specified set of) our patented processes in perpuity). The car payment covers the right to drive the car 1 mile or 1 million miles. Obviously the car may need maintenance for which a payment will need to be made,. Likewise if Samsung need extra assistance or to use addition or newer patents a charge would have to be paid), but if no further assistance is needed from Nanoco and Samsung don't want to use any of our non-specified patents, then Samsung can use the 'bought' processes as little or as much as they want.
Kat, I also have that concern but there is so much we don't know yet. It could be that this risk is mitigated in the yet to be revealed final settlement. Also is there any chance that Nanoco is playng a blinder? And they know that the patents that Samsung will be able to use will soon be so out of date because of new Nanoco patents that Sumsung will have to pay again for much improved production or different processes to get higher quality display QDs?
Does anyone has any experience of how people estimate the future component of such a settlement. Given the number of QDs being sold is forecast to increase dramatically in the future would the future component likely be a small faction or a multiple of the historic settlement figure? I realise everybody is probably uncertain about the settlment amount, but I see the range as being so large it is difficult to value Nanoco even approximately.I admit my ignorance of these sorts of settlements but whilst I accept the figure will probably disappoint most of us LTHs could we still be wrong? At the top end could we still see $200m for US past sales up to a year ago, maybe $250m up to the present day, times 2 for world wide sales= say $500M then maybe 50% more for future sales giving $750M? And what about tax, can the future sales component of the settlement be counting as accrued over the next 'N' years or is tax payable on the whole amount in the current year? Of course our backers fees will also have to come out of the settlement.
I think one can spin this either way, and I am flip flopping a bit but I am now tending towards the pesimistic. If we get a significant lump sum in settlement but then can't expect much more income from QDs in display, the company's future prospects will depend very heavily on whether the orders for the other materials materialise and are profitable or whether this turns out to be another false dawn as per the American customer.
https://www.edisongroup.com/publication/context-on-no-fault-settlement-of-litigation/31841/
Two extracts with possible implications:
Extract 1
'Settlement of the litigation will enable Nanoco’s management to focus on commercialising its nanomaterials.'
Maybe hints Nanoco won't get much more after this settlement from the Display/QD market?
Extract 2
'For context, we have previously calculated that lost revenue in the US attributable to the patent infringement so far could be US$200–250m or more. This figure would increase if non-US sales and future shipments are included. However, a settlement is likely to be based around lost earnings rather than revenues, with a further discount on the potential jury outcome reflecting uncertainties about risk and the time value of money, noting the full trial and appeal process could take years. Lawyers’ success-based fees will also be deducted from the settlement. '
Implication: (maye ) Don't get too excited?
The very fact that there are two RNSs and not one, suggests that the company didn't think carefully enough before they issued the first one!
@Dwstudioa, But if Samung don't want to pay for future royalties how could Nanoco litigate against them if the agreement includes all future ltigation? I hope Nanoco's Lawyers get this right. A lot is at stake!