Graphene Frontiers• Zhengtang Tom Luo: EL• A.T. Charlie Johnson: PI• Mike Patterson: Mentor• The subject of the 2010 Nobel Prize in Physics, graphene is believed to be the strongest and most conductive material ever measured• Graphene Frontiers is working to scale and commercialize a patent pending production process for manufacturing graphene that produces a higher quality material at a lower cost than other known methods
Graphene Frontiers Business Model Canvas “B” Scale upEquipment Foldable / Education FlexibleMfg Bendable Transparent Customization Service/Maint. ConductorUniversities Build Prototype Durable Collaborative Paper thin R&D displayDownstream (PTD)FabricationCompanies Rugged Higher Quality Touch IP License Large Area Screen CVD Equipment “Industrializable” Integrate Into Other Products Low Cost Facilities/Lab Intermediate License/Royalty Capital Equipment Personnel Product Sales Direct Sales/Travel Lab space
What We Did: F2F/Phone Discussions• Sudip @ Osage Capital Partners• John (CEO), Wayne (Founder), Keith, and Allen at Graphene Technologies• Bo Ning from Knighthawk Engineering• Andreas Kopietz from kopietz-consulting.de• Jason Heikenfeld, Gamma dynamics• Miguel Fonseca at DISPLAX• Joseph King, Managing Director of Global Investments at DuPont Ventures• Pannam team. Meeting with Nick Briggs(sales), Joe Lough (technical), Herb Gieseler, Jeff Lubich, Barry McCray, Claudia Bostic, Mike Olszewski, Mike Rish.
Partners• Investors – We need them to share cost – Risk: what are risks? (IP, competition, market readiness) – Why will they partner with you? – What’s the cost of the partnership?• Competitor example: Graphene Supermarket• Display/Touch screen manufacturers: Gamma dynamics, DISPLAX, Pannam – We need their expertise and manufacturing capability – Why will they partner with you? They need a new “Buzzworthy” product – We might get stuck in non-profitable products – “Buzzworthy” = loss leader? – What’s the cost of the partnership? Time and resource for joint product development
What We’ve Learned• We will need a partner to enter the paper-thin display or rugged touch screen market• Key to success is clear and candid communication of our material specs and limitations—still some unknowns, e.g. durability• We might have limited knowledge of partner capability and resources—significant due diligence required• Value will be in IP generation: How do we ensure that we capture some of this and share in the upside? (JV?)
Sample Income Statement Graphene Frontiers Sample Income Statement Projection (In thousands)Fiscal year ended Dec 31, 2012 We expect license feesGross Revenues: and royalties to be > 2/3 Licensing $1,000 total revenue stream Material Sales $ 300 Direct material salesTotal gross revenues $1,300 gross margin > 65% at scaleExpenses: COGS $ 100 SG&A $ 300 R&D and SG&A are Rent $ 50 primary cost drivers Depreciation $ 20 in licensing model R&D . $ 700Total expenses: ($1,170)NET INCOME $ 130
Our Plan for Next Week• Keep looking for strategic partners and specific product/niche – Paper Thin Displays – Rugged Touch Screen• Prepare samples and send out for testing and follow up
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