Nanalyze

Quantum Materials Corp Needs Cash Badly

An article was published last week on Aznano titled “Quantum Dot LED Display Development Kicked Off by Quantum Materials Corp” in which it was stated that a company called Quantum Materials Corp is “now supplying tetrapod quantum dots to an Asian manufacturer of LCD displays“. The article goes on to state that “it will be fascinating to see the first prototypes of these game-changing QD-LED displays when they emerge“. Given that Quantum Materials Corp is an over-the-counter (OTC) stock, and that many OTC stocks have lost investors money over the years, this merits a much closer look at who the company is.

QTMM_Logo

In November 2008, Quantum Materials Corp (OTCMKTS:QTMM) changed its business plans from pursuing the mining of mineral rights located in Nevada to pursuing the business plans of its subsidiary, Solterra, a start-up solar technology and quantum dot manufacturing firm. QTMM’s shares jumped 40% last Friday, presumably on the back of their recent press release giving the company a market cap of just over $10 million. As of March 31 2013, the company had $1,625 in cash on hand and licenses worth $55,000 bringing total assets of the company to $56,625. Total shareholders deficit sits around $13 million currently. The company has no revenues.

Technology
The company currently has licensing agreements with Rice University, the University of Arizona, and Arizona State University (ASU). Regarding Rice University, the company states in their latest 10-Q  that they were unable to meet the August 2012 minimum royalty payments agreed upon with Rice as well as production milestones and that they are in discussions with Rice regarding the  status of their license agreement. Regarding ASU, QTMM agreed to pay ASU $835,000 for printed solar cell development work. As of June 30, 2010, $630,000 of these costs had been incurred. QTMM has paid ASU $175,000 under their contract with ASU and is attempting to negotiate a substantially reduced fee payable for the remainder. Regarding the University of Arizona, the company has licensed one patent titled “Screen Printing Techniques for the Fabrication of Organic Light – Emitting Diodes” and has agreed to yearly royalty payments increasing each year to 2015 with the next payment of $25,000 due on Dec 31 2013.

Progress
The press release referenced by Aznano states that Quantum Materials Corp  has “shipped Tetrapod Quantum Dots in sample quantities to a diversified leading Asian-based electronics manufacturer”. Assuming that these were solicited shipments, it still hardly means they are “supplying” to this leading manufacturer.

In the latest 10-Q (Q1 2013) the below statement is made regarding the company’s goals for the production of quantum dots :

The design of the pilot line is intended such that the initial target output of the line, at approximately one kilogram per day, can be further scaled at least by an order of magnitude to 100 Kilograms per day in 2012.

With 2012 having come and gone and the agreement with Rice in discussion as a result of missing production targets it seems unlikely the company met this goal.

In regards to current financial standing, the latest 10-Q makes the following statement:

As of March 31, 2013, the Company lacks sufficient cash continues to incur losses in its development stage operations.  In the past, the Company has been relying on loans from its Chief Executive Officer resulting from private sale transactions of our common stock that is owned by him. The Company is in arrears in payments related to these business agreements.  The company also owes $1,784,122 in back wages and salaries; employees and consultants have agreed to defer payment of the wages and fees owed to them.

While the recent announcement seems meaningful on the surface, the company is in need of funding. Investors should ask themselves just what potential the company has to begin mass producing quantum dots even if they are able to get funding through a severely discounted secondary offering. For exposure to quantum dots, investors should also look at a company we profiled earlier called Nanoco which is currently partnered with Dow Chemical and is in the process of mass producing quantum dots.

Update September 17 2013:  We received an email from Art Lamstein, Director of Marketing at QTMM,  asking us to retract this article. Since all the facts in the article are taken from the latest available 10-Q of the company (March 31 2013) we have nothing to retract. We look forward to any newly filed 10-Qs or 8-Ks which may provide an update as to how the Company has progressed since.

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  • Sam Bass

    Seems like the AZNano article may have hit a nerve here. Could the Nanalyze being shorting QTMM stock??
    I think thou protest to much. I have done mu due diligence on QTMM and find much of what is stated in the article to be non-factual.

    • John A

      The money in March 2013 is being used to fund a Reactor in Star Park located at Texas State University in Austin Texas. This will allow for Mass Production of Tetrapod Quantum Dots used in not only Displays but a miriad of fields including Solar, Lighting, Nanomedical to name a few.

      • Colin S

        You couldn’t be paid by Nanoco to write this article….could you?? Haha, come on man. Anyone that is truly investing in QTMM has read the 10Qs and other financial reports MONTHS or YEARS ago. This is a pretty sad article.

    • Jason P

      I respect your right to have a contrary opinion, but specifically, what is non-factual?

      • Nanalyze

        Thank you for the comments all. What is posted in this article about Quantum Materials Corp is simply taken directly from the company March 31 2013 10-Q filing (their latest) available at the SEC government website seen at the below link:

        http://www.sec.gov/Archives/edgar/data/1403570/000101376213000713/form10q.htm

        As for the comment made about shorting, you can see our statement in the “About Us” section which states we never short any stock discussed on this site. In an article we published last month, you can also note that it is difficult and very rare to actually be able to short OTC stocks:

        https://www.nanalyze.com/2013/08/the-dangers-of-over-the-counter-otc-stocks/

        We are never compensated in any way for the articles we write and would welcome any statements concerning what exactly is non factual in this article.

  • John A

    Rice has extended QMC for worldwide distribution of their Superior Tetrapod Quantum Dots, also the research with Access2Flow in the Netherlands to allow Mass Production at 100kg per day..

  • Colin S

    In your about us, you allegedly hold a position for 30 days. Thats great…and who is holding you to that statement? The article was ok in that it did show some potential issues with QTMM, but to end the article with weak propaganda promoting Nanoco was were I questioned your motives. Have you contacted QTMM to validate any of your claims. Most of your info is from nearly a year ago, with the most recent coming 6 months ago. Have you taken into consideration their move to Star Park? Or the fact that this industry seems to be really heating up? I am going to pull a Good Will Hunting quote right now and let you know that: “You’re suspect! Yeah, you! I don’t know what your reputation is in this town, but after the shit you tried to pull today you can bet I’ll be looking into you.”

  • John A

    “QMC Needs Cash Badly” This is Misinformation and Misleading CEO Stephen Squires increased the number of shares in March 2013 to Fund Star Park and pay future salaries which Corporate Personnel are taking stock. Yes, other companies have “misled investors” on the pink and OTC by diluting their stock however QMC is not doing this imo..

  • Ken

    Your comment on Nanoco actually being in the process of mass producing quantum dots can also be said about QMC.Both have not yet shown their capabilities and in fact Nanoco is “planning” to scale up in mid 2014.I would say you should have contacted the company first to find out more about their current license status and their patent pending flow process which uses cheap solvents and produces a superior tetrapod quantum dot.The company has stated they can also produce Cadmium free dots which the market has been demanding. More research should have been done for this article before submitting it for publication.

  • Stan Collins

    Out of curiosity, I spent an hour reading through the 10-Q and wasn’t able to find anything conflicting with the facts and/or analysis in this article. Seems like a well-rounded overview of the company’s financial condition. Nice job.

    • Ken

      Please post Mr.Lamsteins request so we can decide as readers wether this article is slanted and or full of inaccuracies.The title alone could be used for any start up and is misleading in itself.Its obvious from Mr.Lamstein’s request that you didn’t even take the time to call the company in order to due some due diligence before writing this misleading article.

      • Nanalyze

        Thank you for the comment Ken. As mentioned before, we have taken information for this article directly from the March 31 2013 10-Q which is the latest quarterly report provided by Quantum Materials Corp to the SEC. As Stan Collins previously commented, you can read through the 10-Q and see that there are no conflicting facts within this article. You are right that the title of this article could be used for many technology startups. In this case it is refering to a company with one thousand six hundred and twenty five dollars in cash on their books as of March 31 2013.

        • John A

          What was stated by Ken is correct, lots of changes have occured since their March 10Q as stated by the comments. To state that “QMC needs Cash Badly” is Inaccurate and an Assumption on your part. This article should have written after their 10K for activities up to June 30th are released lster this month. The (patented) Rice Tetrapod licensing for Worldwide Distribution alone is worth the current shareprice lol..

        • Len

          What I find interesting is this sentence in the article: “Investors should ask themselves just what potential the company has to begin mass producing quantum dots even if they are able to get funding through a severely discounted secondary offering. ”

          That is a great question for this article to ask and it is disappointing that Nanalyze did not really attempt to answer it. It could have led to more detailed analysis than using only dated information as of March 31, 2013 in the cited 10Q. Since that time , there have been 2 form D subscriptions to obtain funds to move forward with the business plan. One of these subscriptions funded moving into STAR Park as noted in the comments above. The second would provide funding to move forward with the business plan to begin QD production using the continuous flow method.

          Investors may look in the rear view mirror for past information in doing their due diligence, but maybe even more important analysis should looking forward to determine the future prospects of the company. I found it interesting that Nanalyze chose to stop half way through the analysis.

          So investors should ask the question that Nanalyze failed to examine, which is: If (when) QMC obtains funds through a secondary offering, what mass production capability will their continuous flow reactor enable and what will their production capability be relative to competition (including Nanoco)? I recommend further reading of the annual 10K report, due Sept 30, to help answer that question.

          • Nanalyze

            Thank you for the crtical commentary Len. Will look forward to reading the filing due Sept 30.

  • Bill Leigh

    If you look at only the company SEC filings and not at the overall industry developments or company news I can see where you would come to your conclusion. You are also correct about most penny stocks going under the first couple years. It’s about 60% within the first 4 years. (See OVER ENTHUSIASTIC JUBILANCE courtesy of QMC/Solterra! January 28, 2010) and on top of that I’ll add, most of those promoted penny stocks are a means to launder money. I’m glad you are not paid by Nanoco as it would take away from your accreditation. You do need to bone up more on what’s happening in the industry. Nanoco is significantly in the RED and building out their process on an antiquated synthesis manufacturing method to supply their QD’s. It is great that Nanoco is breaking the QD news to the world, AT THEIR COST. QMC will ride the coattails until it’s time for a manufacturer to meet the markets needs and equally importantly for the markets to develop. Just as Nanoco needs cash to expand so does QMC. Only QMC has raised the cash they need when they need it and haven’t given the farm away to Angel Investors or Venture Capitalists. Being frugal with others money is not a bad thing. 5 years in development and still growing in the Nano industry that will be the next renaissance is something your followers should really take a good look at. There’s a reason QMC’s License agreements remain intact as the market develops, Cost, Quality, Quantity. No other CEO brought together the components to give the life blood to a new industry. QMC will allow companies to commercialize their products and increase their profit margins. That’s a successful business strategy. You really do want to take a second look at QMC and change the title to “A Cheap Stock Worth Looking At: Quantum Materials Corp.”
    Bill

    • Nanalyze

      Bill, your comment has now been posted. It was being tagged by an automated spam filter which was preventing it from being posted before.

      • Bill Leigh

        I appreciate that, thank you.

  • John A

    Private Placement rounds have also been implimented for QMC funding which also has been overlooked. With the Sony 4k TV’s selling like hotcakes which has QDVision Quantum Dots this field is the next generation evolving b4 your eyes..Don’t discount QMC they may have the last laugh.

    • Schindler

      Exactly. QD Vision is actually in production. Why is nobody discussing a competitor like QD Vision who is much more ahead? Shipping Sony televisions. Also Nanosys is a player here. It’s not just the public companies that everyone seems to focus on. And who cares about Nanoco since you can’t invest in them anyway.

  • More reasons you guys need to rethink your position on QMC. See the latest 8K from QMC on their updated Rice License Agreement. Nanoco isn’t looking so good in the long run. Dow will pay Nanoco a 15-30% royalty for the right to make and sell Nanoco’s Qdots. So Nanoco will get somewhere between 15-30% of the value of their Qdots. Compare that to QMC only having to pay 7.5% to Rice, keeping 92.5% minus production costs.
    QMC is set up in the long term to come out ahead in Licensing, Cost, Quality and Quantity.

    • Jason P

      I don’t understand your example. On one hand you are comparing Nanoco’s and QMC’s ability to compete and then you confuse the parties. In your post, Nanoco is Rice and Dow is QMC. Okay, maybe QMC gets to use a technology for less than Dow, but Nanoco, like Rice, essentially has to do nothing and has a steady stream of cash for 15 years. Huh?

      • Ken

        Bills comments where pretty straight forward using basic math.Where do you establish the fact that there is a 15 year deal ?I don’t recall the details of the contract with Dow ever being disclosed. What is the cost to scale up that Dow will ensure payment for in that agreement ?? QMC scale up is very minimal requiring a small staff to operate the flow reactor.I sat through a conference where Nanoco described its process and it sounded much more time consuming.If scale up is paralell batch lines like Nanosys is using then I would dare to say QMC will have an edge.JMHO

  • Art Lamstein

    Quantum Materials SEC 8K released yesterday proves your article was wrong as we claimed when we first requested you remove it. It is a discredit to you and your company to post false and outdated information without fact checking and hide behind poor excuses. Your ethics are in question and changing a few words in the article does not hide your relationship with Nanoco. We again request you remove this false and misleading article. Art Lamstein, Director of Marketing, Quantum Materials Corp.

    • Nanalyze

      Thank you for the update on the recently filed 8-K Art. Per your comment, we have no relationship with Nanoco nor with QTMM.

      The information in our September 16th article was based on the most recently available information provided by Quantum Materials Corp to the SEC, a March 2013 10-Q. Three days later we see that Quantum Materials Corp has filed updated information in the form of an 8-K to the SEC regarding amendments to the Rice agreement.

      Given that the SEC requires a company to file an 8-K within 4 business days of a significant material event occurring, we can only assume that this amendment was agreed upon on or after September 15th. Since September 15 was a Sunday, we will assume the earliest day this agreement was solidified on was September 13th.

      We have decided to cover these updates given the high level of interest in this company by our readers. A link to this article discussing the newly available information from Quantum Materials Corp can be seen below:

      https://www.nanalyze.com/2013/09/quantum-materials-corp-and-rice-university/

      Given that the last 10-Q filing by Quantum Materials Corp was for Q1 2013 and we are nearing the end of Q3 2013 we will look forward to seeing an updated 10-Q in the near future.

  • Bill Leigh

    Why not change the title to Investing in Quantum Dots with QMC, the same as your Nanoco article and everyone is happy or QMC – a Tetrapod Quantum Dot Company. The fact you never mention “badly” in the article again does seem a little biased (providing a link to Nanoco in a QMC article) for two companies in the same boat.
    Bill

  • John Robinsonson

    Great article which is based on facts.
    Good job nanalyze!

    Looks like Art Lamstein, a former admin of the QTMM board on IHUB, has send some board members over here….LOL

    @Bill QMC is not in the same boat as Nanoco.
    Nanoco sells quantumdots and QMC wants to sell quantumdots!
    Who is biased here?

    • Bill Leigh

      WHO IS BIASED HERE?
      From: http://www.alexa.com/siteinfo/nanalyze.com
      Site Description
      Nanalyze will provide the private investment community with accurate, intelligent, and unbiased information for lucrative investing in the exciting field of nanotechnology … Nanalyze will be the primary information resource for nanotechnology investors … We are very passionate about nanotechnology, its future potential, and the part Nanalyze will play in promoting growth of nanotechnology through intelligent investments by private investors.

      REALLY UNBAISED?
      “We are very passionate about nanotechnology, its future potential, and the part Nanalyze will play in promoting growth of nanotechnology” How is that possible if they imply slanderous statements in their article to a startup in the industry they so love. Wouldn’t they be better off not saying anything? What prompted them to write a negative article in the first place and without checking with the company before publishing, was there a deadline to make?

      “Nanalyze will provide the private investment community with accurate, intelligent, and unbiased information for lucrative investing in the exciting field of nanotechnology …” How is that possible if their info is not accurate and unbiased? Without doing their due diligence to get accurate facts, (definition of accurate – “free from errors” and the fact they provide a link to a previous article they wrote about a company in the same industry and implying they would be a better investment doesn’t sound unbiased to me.

      “Nanalyze will be the primary information resource for nanotechnology investors … “ How is that possible when all of the above is true and they remain steadfast in their conviction they are right after the facts proved they were wrong? They had to write a follow up article, baised of course. A simple request to change a misleading title or retract the article as it is very well proven they did not do their homework about QMC before writing the article went ignored.

      They had a lot of traffic from their article about Medimass and cancer, do you or do they know anything about NanoAxis and QMC’s alliance? There is a lot more to this story than what is in the printed numbers. Stay tuned, I’ll be waiting to find out from Nanalyze what Crow tastes like.

      And their follow up article is also NOT UNBAISED, here’s why:

      UNBAISED REALLY? Why would they imply something other than the truth?
      “Given that the SEC requires a company to file an 8-K within 4 business days of a significant material event occurring, we can only assume that this amendment was agreed upon in the past four business days”.
      Remove that sentence and it would be unbiased reporting. The facts are, as they know them:

      CURRENT REPORT
      Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported): September 19, 2013 (August 21, 2013)

      Let me run through a possible timeline scenerio. Rice sends the papers to QMC on or after 8-21-13. They are received and reviewed by the CEO, he then has to send them to the lawyer to review, I’m sure they talked and I’m sure the lawyer didn’t drop everything he was doing just to look at the amended letter. Did Nanalyze know for a fact there were no discussions with Rice or any typo’s that had to be corrected? 4 weeks in the business world to get a response for something that was not mission critical sounds reasonable to me. So why do they bring up in their article that they have to report to the SEC within 4 days of the event. UNBAISED I don’t think. They need to reread their mission statement and reread it again. They are not doing themself any favors nor anyone looking for WISE investment advice from them.

      • Bill

        I’m waiting for your article NANOCO NEEDS CASH BADLY: “The additional funds to be raised in this placing will assist our efforts to realise our strategy and to deliver value to our shareholders.” Raising funds so they can keep their head above water a little longer since they give no material purpose for its use. YOUR RECOMMENDATION TO YOUR CLIENTS ISN’T LOOKING SO GOOD NOW, IS IT?

        • Jason P

          Assets: 26.671 vs. 0.227
          Liabilities: 3.497 vs. 4.162

          Huh? Is America’s educational system that bad?

    • Schindler

      Nanosys announces 2000kg quantum dot production milestone for high performance consumer displays. They’re way ahead of everyone else it seems.

  • Sam Bass

    Ive read that Nanoco has a royalty obligation to University of Manchester of 25%
    Can anyone else confirm this? If this is accurate it doesnt seem like the 25% royalty the collect from Dow is going to net much income for Nanoco??

    • Jason P

      No royalty required. They own the IP; gave U of M shares a while back.

  • Bill

    READY TO EAT CROW for the lies in your article? How’s $20 million from GTG to open the China market for Quantum Materials Asia Co., LLC. Your suggested backing of Nanoco to your readers seems to have backfired for you as their stock takes a schlackin.
    You also may want to ask why did Nitto Denko pay Quantum Materials Corp a quarter million dollars NOT to have discussions for 4 months with 2 companies?
    You really shouldn’t post unsubstantiated lies, they may come back to bite you in the future!

    • Nanalyze

      Hi Bill. I’m not sure what facts in our articles you are calling lies, as we simply took everything from the very filings that QMC made to the SEC. Here is the filing you are referring to:

      On January 27, 2016, the Company issued a press release announcing that the company has entered into a joint venture with Guanghui Technology Group (“GTG”) whereby GTG will invest $20 Million US into the joint venture for building out Quantum Materials QDX™ quantum dot production facilities and quantum dots application development in China. The joint venture will be registered in Hong Kong and operated as Quantum Materials Asia Co., Ltd. Under the terms of the agreement, cash distributions by the joint venture will be split 50% – 50% between the Company and GTG. The Company and GTG will each appoint three members of the joint venture’s board of directors, and Stephen Squires, Quantum Materials Corp. President and CEO will serve as the joint venture’s CEO.

      If you are a regular reader you would know that we never back any particular company but rather present the facts and let investors make their own decisions. Please note the +450 articles on this site that are not related to quantum dot manufacturing companies.

      Unfortunately, nano materials just haven’t delivered yet for any manufacturer is terms of meaningful revenues and of course profits. Carbon nanotubes and graphene are two examples.

  • How Ker

    US Global Nanospace (USGN) / Aerospace (USGA) : The Stephen “Steve” Squires Penny Stock Scam Before Quantum Materials Corp and Solterra Renewable Energy
    http://investorshub.advfn.com/boards/read_msg.aspx?message_id=2425508

    • Nanalyze

      US Global Nanospace was probably one of the most hilarious pump-and-dump scams we’ve ever seen. We distinctly recall when they came out with “a cure for mad cow disease” and someone commented that the only way that cure might work is if you shoved it up the cows ass and hoped that made the cow change it’s mind about eating contaminated food.

  • Ih8aloss

    Print the whole story, false allegations and Steve was exonerated of all charges. Get your facts straight before trying to run a scam of your own to pick up cheap shares.

    • Nanalyze

      Whenever we hear someone talking about “picking up cheap shares” red flags go off.

      OTC stocks are rife with scams and the sort of people that spout drivel about OTC pump-and-dumps are nothing less than criminals.

      We’ve said what we had to say and our readers know that our track record of exposing OTC scams speaks for itself. No matter what happens, our articles are there to warn people of the dangers out there and that makes us feel good every day.

  • Ih8aloss

    In case you didn’t know the site IHub, its. founder was sent to jail for illegally SCAMMING the penny stock market for millions from, you guessed it, his own website (Birds of a feather flock together) of liars, cheats and penny stock SCAMMERS! Watch the posts that defend a company with facts – they get deleted yet the slanderous posts remain. Search IHub complaints/scams for more, just the FACTS!

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