Quantum Materials Corp, Tiny Products, Giant Potential

You said large & small, public & private companies are already using quantum dots. What can you say about the cost, quality, and other elements of existing QDs? 

Much of the success in the market emanates from companies that have supplied cadmium-based (heavy metal) QDs.This is important because, with restrictions on the use of cadmium in Europe and Japan, the future for those products is not bright. We are not the only game in town, but the volumes of products supplied by competitors is still quite small. Since we use manufacturing processes that we believe are superior, we expect to deliver a better product suite, again, at a very competitive price. 

What about technology risk from new methods of producing quantum dots?Could your Intellectual Property become obsolete? 

We are the new method for making QDs; we are the ones posing a risk to the incumbent’s IP.Our IP is strong, and we are always developing new IP to secure and consolidate our position in the market. This is still an emerging science, so I expect a lot of developments in the next decade, and we’re seeing a lot of research being done at universities, as well as at large and small companies. No one knows for sure, but the expanding size and wider range of end-uses promise a large QD market for the foreseeable future.

If quantum dot technology has been around for decades, why hasn’t the market taken off?

Developing and optimizing the quality of materials and integrating new core technologies such as QDs takes time. It’s no different from the original LCD & OLED technologies that took decades to develop. No different from lithium-ion batteries that are becoming ubiquitous. Products from select companies are shipping, and there are TVs in the market that utilize QDs. However, it’s still early days, and the market is huge. While we think we have an opportunity to capture substantial market share, even more modest penetration could, over time, amount to hundreds of millions in revenue. Not bad for a company with an Enterprise Value [market cap + debt – cash] of US$25 million. 

Do you feel that QMC has a finite window of opportunity during which it has to gain traction or risk missing key growth stages in the market? 

Yes, each market from TV to Solar to innovative uses to ensure the authenticity of pharmaceuticals, each have windows of opportunity. We are constantly monitoring these windows to make sure we’re wellpositionedand we think we are. However, as mentioned, display represents the clearest path to revenue generation. Solar provides us with longer-term potential, potential for which we could possibly self-fund based on cash flow from our display segment. 

I understand that the Company has been sending sample material to a number of parties. What type of end-users are being targeted? 

Yes, that’s right.Companies receiving samples are those able to take our QDs and produce film composites for use in TVs and other display applications. We are talking about a handful of large, well-established players in the TV supply chain. This is a critical step for us, and we think it demonstrates where we stand in our development phase. Small companies like ours are able to sell samples because our customers believe that our technology and our ability to operate at industrial-scale is secure. That means the ability to ramp up if/when we receive commercial-scale purchase orders. And, look, the companies buying our samples aren’t playing games, the display industry is a serious business. There’s lots of money at stake, including investment on their part to evaluate our samples and make QD-composite films.

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Disclosure: Quantum Materials Corp. is a company that I, Peter Epstein, CFA, MBA, am invested in.  I have no existing or prior relationship with CEO, Sri Peruvemba or QMC.  QMC is ...

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