Conference Call notes:
First, up front let me apologize for any incomplete statements, mis-statements, etc.. But I wanted to get this out as quickly as possible.
Lev D. started off by speaking about todays Telecordia announcement. It will be an asset purchase which is slated to close in December 2000. It covers all Lith-ion solid state polymer patents. This news affords VLNC the opportunity to turn competitors into partners (I LOVE that idea, heh).
VLNC will be forming 3 companies:
1. A subsidiary to manage and handle all aspects of licensinging and partnership relations.
2. A subsidiary to manage and sell VLNC materials and components.
3. A subsidiary to manage the next generation of products and research.
Additionally VLNC will be targeting any/all SPECIALIZED applications on a global scale. After these initial comments he opened the floor to questions:
CIBC: Exactly how many patents? 42 U.S. and 170 worldwide which together with VLNC's existing patent portfolio amounts to over 700.
CIBC: What is the count of current Telecordia licensees? 15 licensees of materials and processes.
CIBC: Are these licensees responsible for all the global polymer manufacturing? Yes, but this doesn't include "pseudo" (my term) polymer manufacturers, eg. those sticking liquid in a "bag."
CIBC: Can you speak to the size of the royalty stream? Not at this time.
CIBC: Will licenses be revamped going forward? VLNC's subsidiary will honor all current agreements. However, these agreements do not allow automatic access to VLNC's patents. VLNC expects to leverage the licensees into their patents. They intend to "enable" these licensees to move into VLNC technology.
Lev then went on to state that VLNC is licensing their materials providers (of which there are 2) so they can hustle their materials to the larger battery community. He then went on to discuss their advances in the phosphate category. VLNC is now scaling up their own phosphate (which is a very safe material with costs in the $12/kilo range which they plan on driving down to the $2/$3 range) production and expect to begin licensing it soon. 1st gen of phosphate has energy densities equal to cobalt, with 2nd gen "significantly" better. Additionally, VLNC is looking to build new facilities for film production, and these will "probably be in Asia." Indeed, Lev is slated to be traveling through Asia in two weeks. Bottom line is with production costs coming down he expects they could penetrate down to the "hand tool" level.
Lev then went back to the licensing question and stated the licensees had NO advance warning of the Telecordia deal (heh heh--uh--my intepretation). They were all faxed letters today. Part of the letter was an open invitation to visit the N.I. facility, etc.
CIBC: Any indications on the royalty rate? No. Lev wants to talk with his licensees first.
Presido (spelling?) Management: The last paragraph of todays release implies VLNC is the largest producer of lith-poly batteries. Is this correct? Yes, as far as he knows.
Presido: Is Nokia not using Telecordia patents? Yes. Nokia isn't using Bellcore patents. They're using liquid poly then geling it and putting it into a plastic bag. Lev made a parenthetical aside at this point..."we feel we have a patent on THAT process by the way..."
Edward Jones Securities: When do they expect a substantial stream from the licensees? This is too soon to know. VLNC will know better within a couple of months.
Prudential: What is up with Hanil? Hanil is "pretty delicate" right now, but VLNC has onther licensees in Korea. Hanil will probably become another licensee. They're currently providing samples, not as fast as VLNC wanted, to various customers. One of which is China. It comes down to this. Hanil is a cement company who in times past has been primarily focused on cement and entertainment market sectors. This is their first foray into a high-tech endeavor. As such VLNC is having to "teach" them more heavily than they originally expected. So things are going slower than anticipated.
CR Capital: How does todays announcement effect VLNC's relationship with Delphi? Delphi is a licensee of Telecordia patents THROUGH VLNC. So for the next couple of years VLNC is precluded from approaching the automotive sector.
CR Capital: How far along is VLNC with the new corporate structure? They're mostly there already, excepting the holding company, as they've been aggressively pursuing this for a couple of months.
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There was a little bit more but I couldn't capture it as I had to deal with a work issue. Anyway, my apologies for any mis-spellings/typing/etc.. I look forward to others adding other commentary to round out mine. My thoughts on this will come later, as now it's back to work crises....
John~ |
