Posts Tagged ‘finance’

Findings like these makes CESI believe that the positive statements from the CEO Anders Spetz is based on fundamental progress and near future acceleration of turnaround and subsequent revenue. The Q2 report burnrate of approximately 5 MSEK (of total cash ~138 M SEK) was positively explained with “cost associated with stockpiling”.

WO 2017098179 A1
Publication date: June 15, 2017
Reactive compositions made from semi-crystalline amino polyamide prepolymer and unsaturated extender for thermoplastic composite materials

Source link : https://www.google.com/patents/WO2017098179A1?cl=en

Composite materials and, more particularly, composite materials comprising a polymeric matrix impregnated reinforcing fibers are increasingly used in many technical fields, especially in aeronautical applications, aerospace, wind, automobile , rail, marine. These applications mainly require composites with high mechanical performance, especially at high operating temperatures and with structural lightweight parts by weight relative to the metal and recyclable equivalent parts.

“To improve the impregnation of reinforcing fibers in the case of a thermoplastic composite material, reactive compositions precursors of the composite material based on a reactive prepolymer and a coreactive chain extender them have been proposed.
Preparation of polyamide polymer by chain extension with an extender a2)
Of the oligomer 1 above dried and ground is mixed in the solid state with 4- anhydride (methyl ethynyl) phthalic (APME, Mn = 186.2 g / mol) sold under the name ® A32 Nexamite by the company Nexam Chemical anhydride or trimellitic phenyl ethynyl (PETA, Mn = 276.3 g / mol) sold under the name Nexamite A56 ® by the company Nexam Chemical at different molar ratios a2) / NH2. The amounts are calculated so that the mixing weight is equal to 12 g.”

About Arkema:

+19000 employees and total sales roughly in the range of € 7 billion (!)

https://www.arkema.com/en/arkema-group/organization/
https://www.arkema.com/en/investor-relations/financials/key-figures/

 

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a positively biased Nexam Chemical share holder. Cutting Edge Science Invest can not guarantee, or take into accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

I was exceptionally impressed by Anders Spetz positive presentation of the Nexam Chemical Q2 interim report (Swedish language in audiocast presentation below)

https://tv.streamfabriken.com/nexam-chemicals-q2-2017

A completely new generation of polyethylene pipes in collaboration with one of the world´s largest company (large steps taken during the summer). A large number of customers has now entered qualification processes.

Within polyester foam (PET foam), completely new products have been developed jointly with the largest companies.

Within high performance, the development is also positive. Ongoing collaboration projects within aviation and internal product development have resulted in new products.

In the Q2 report, the CEO Anders Spetz stated that Armacell will in fact use Nexamite in its PET foam! Mr Market has still not reacted. I did.

http://www.nexamchemical.com/Investors/Press-releases/Pressmeddelande/?releaseid=2643669

According to the CEO, the company have managed to achieve the commercialization phase milestone and the company is now preparing for large volume orders (REACH certification and planning for masterbatch scale up). Funding was also recently granted for graphene research (a promising and hyped wonder material of a number of reasons according to industry consensus).

http://www.nexamchemical.com/Investors/Press-releases/Pressmeddelande/?releaseid=2559456

About graphene:

https://www.theguardian.com/science/2013/nov/26/graphene-molecule-potential-wonder-material

In addition, I regained motivation to actively follow events with direct- or indirect connection to the Nexam chemical business and emerging innovation, primarily via the patent domain. This resulted in the following minor hit:
Obviously, the following new patent application commenting Nexamite and the subsequent google search identifying the main applicant Martin Weinberg is of no direct impact for my opinion about Nexam Chemical´s chance to accelerate business. Still, and in waiting mode for the large customer´s ongoing tests, I define the following information as a nice receipt of the Nexam Chemical technology. Martin Weinberg, CEO of Xamax, seems to appreciate Nexamite. Presumably, Xamax is a small existing customer or alternatively a near future small customer.

Company and staff:

https://xamax.com/
https://xamax.com/our-team/

The following patent application was published July 20, 2017 (and Martin is one of two applicants).

[0038] Non-limiting examples of cross-linkers that can be used to form the present cross-linked aliphatic polyamide are commercially available from Nexam Chemical Holding AB, Scheelevagen 19, 223 63 LUND, Sweden. Nexam Chemical currently markets five different cross-linkers for different curing temperatures: NEXIMID® 100 (PEP A; e.g., Phenylethynyl phtalic anhydride), NEXIMID® 200 (EPA; e.g., ethynyl phtalic anhydride), NEXIMID ®300 (PETA; e.g., 5-(3-phenylpropioloyl)isobenzofuran-l ,3-dione), NEXIMID® 400 (EBPA; e.g., 5,5′-(ethyne-l,2-diyl)bis(isobenzofuran-l,3-dione), NEXIMID®500 (MEPA; e.g., 4-methylethynyl phthalic anhydride), and NEXAMITE® PBO (e.g., 1,3-phenylene-bis-oxazoline). NEXIMID® 300 (PETA) and NEXIMID®500 (MEPA) are particularly useful cross-linkers for aliphatic polyamides due to their lower reaction temperatures. NEXAMITE® PBO, which can act as an acid scavenger, can also be used to further stabilize aliphatic polyamide against acid attacks.

Patent application source link

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a positively biased Nexam Chemical share holder. Cutting Edge Science Invest can not guarantee, or take into accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

Note: The original C.E.S.I. Arc Aroma Investment Call is found here


Today, C.E.S.I. (an Arc Aroma Pure shareholder) was thrilled by the Arc Aroma Pure February 13 Press release (herein translated and slightly edited by C.E.S.I.):

Arc Aroma Pure AB (publ.) is very active in the market and in different projects. We have chosen to release this memo to live up to our promise to be transparent and to keep our shareholders informed.

bioCEPT® deployed in Jordberga

Company bioCEPT® is now installed and commissioned at the biogas plant in Jordberga outside Trelleborg. The preliminary results are very promising and as expected. Our bioCEPT® in Jordberga will be an important demonstration facility now when we begin to receive both Swedish and foreign delegations, who expressed their interest to see the CEPT® plant in operation. The biogas plant in Jordberga is the largest and most modern plant for the production of biogas in Sweden.

bioCEPT® registered trademark

Now, the Patent Office has announced that bioCEPT® is a registered trademark. The registration is an important step in the company’s market strategy.

Marketing activities

Arc Aroma Pure representatives have visited prospective customers and partners in different market segments and in several countries. This includes visits to China, Thailand, India, Spain and the United States. We note that the hospitality is always very positive and that interest is also very large.

Successful tests in the olive oil project

Recently, the company installed a CEPT® generator, treatment chamber included, in one of the world’s leading facilities for oil production in southern Spain. The plant is probably the largest in the world and receives many visitors. The aim was to try CEPT® platform during full-scale production and to study how the technology can streamline the olive oil production.

Both the management of the facility and visiting experts were initially skeptical, but after a few hours of operation, it was obvious to everyone that the technology works. Thus, we have verified that the effect demonstrated in the laboratory is scalable. Oil quality improved significantly and the amount of high-quality olive oil that can be extracted increases by more than 10% after a CEPT® treatment. We now have a good basis for further discussions with olive oil producers and actors in the industry, discussions operated jointly with our partners TasNord.

Cooperation with AZTI Tecnalia

Arc Aroma Pure AB, while visiting Bilbao, laid the foundation for a collaboration with AZTI Tecnalia, Spain’s leading research institutes in “marinating and food”, “in the context of sustainable”. We will cooperate with the objective of developing equipment and methods based on CEPT® technology and to help prospective customers with evaluation and decision-making.

Media attention

Pär Henriksson has been interviewed by a journalist from Helsingborgs Dagblad and Sydsvenska Dagbladet common industry editorial, 8till5 and a photographer has visited our company. On January 24  a major six slide article was published, where Arc Aroma Pure AB was highlighted with text and images. The text began with the words “The Lund Company Arc Aroma Pure was the Skåne company which had by far the strongest price performance last year. Shares traded on AktieTorget rose by 311 percent. ”

“In this memo, my colleagues and I tried to summarize some of what is happening in the company. As everyone knows, we can not tell you everything, which would violate various rules and ethics. I can summarize that the tempo is high and that we work focused. We are in the middle of the process to move from research and development to marketing and production. A process if not entirely easy, but we are going. ” Says Pär Henriksson, MD, inventor and founder of Arc Aroma Pure.

For further information, please contact:

Pär Henriksson, CEO
Phone: 046-271 83 81
E-mail: per@arcaromapure.se
Website: http://www.arcaromapure.se

PO Rosenqvist, Chairman
Tel: 0705-50 03 86
E-mail: p.o.rosenqvist@arcaromapure.se

Arc Aroma Pure AB (publ) description:

The company will develop and market its patented CEPT® platform for the global cleantech market. The platform uses short, high voltage pulses that breaks the cell membrane and kills unwanted microorganisms. CEPT® therapy is an energy efficient and gentle alternative to heat pasteurization and has a variety of application areas. The efficiency of biogas production and introduction of new commodities which are not used today is in focus. Water, ballast water and liquid foods are examples of other CEPT® applications. The company was founded in 2008, has its headquarters in Lund and has received various awards and support from Vinnova and the Swedish Energy Agency.

Fruit, vegetables and berries lose flavour, shape and structure from freezing. This is because ice crystals formed during freezing causes the cells to “explode” resulting in immediate cell death. This event is particularly visually obvious for plants with soft structure, such as strawberries, but also applies to root vegetables such as spinach and lettuce. Most likely, you are also familiar with the sad appearance of your spinach or strawberries when retaining room temperature after long term storage in the freezer.

OptiFreeze AB has a patented CEPT technology that enables the taste, shape and texture of vegetables, fruit and Berries can be ensured through the freezing and thawing process. The technology opens up completely new markets and business opportunities for food industry companies and companies in freeze/refrigeration technology around the world. The result of the Optifreeze CEPT technology is that the cells of vegetables, fruits and berries incorporates natural antifreeze protein and sugars that keep the cells alive (!) through both the freeze and thaw process and thereby preserving the flavour, shape and texture. Today, there are no known direct competitors. C.E.S.I.´s initial concern was that no big player within the global food industry would be a sufficiently attracted prior to any product launch (proof of market concept). Now, the announced Optifreeze-Orkla ASA activities has removed this C.E.S.I. concern. There´s more than a single potential driver for the global food industry partner: Increased Quality, Less waste, Better access, New products and Lower Transportation Costs.

C.E.S.I. decided to learn more about the global strawberry market and surprisingly, the current trade value metrics are mind-blowing:

Strawberry in perspective “ Fact and figures in Europe and in the world”

  • According to European Fresh Produce association, the 2013 world´s total strawberry world´s trade value is roughly 16.8 Billion SEK (1.8 Billion Euro, page 8) and rapidly increasing.
  • Spain exports generate 4.8 Billion SEK (9.34 was applied as € – SEK currency converting factor)
  • Value growth of exports between 2008 and 2012 was 42% while volume growth was 18% on the same period

StrawExp

And from the European perspective: Intra EU trade ( shipment ):

EUStrawberry

Let´s scrape the surface of the current US market…

Commodity strawberry profile – By Hayley Boriss, Henrich Brunke and Marcia Kreith, Agricultural Issues Center, University of California, March 2006 (Updated May 2014 by Linda Naeve, Program Specialist, Iowa State University Extension and Outreach)

“Over the last two decades, the U.S. strawberry industry has experienced increased rates of consumption at a higher rate than other fruits and vegetables. Strawberries are the fifth most preferred fresh fruit in the United State. Year-round availability of fresh strawberries has significantly influenced their consumption by Americans. They nearly doubled their annual consumption of fresh strawberries since 2002, with per capita consumption rising to almost eight pounds (2012)”

“The drought that plagued California in 2013 is continuing in 2014 and affecting several crops. Industry estimates range from a half-million to 1 million acres of agricultural land in California likely to be affected by the current drought. The state’s governor, Jerry Brown, declared a state of emergency in January due to the lack of water. Timothy Richards, professor of agribusiness at Arizona State University believes between 10 and 20 percent of the supply of certain crops from the state could be lost. He estimates retail berry prices will likely rise by 21 to 43 cents per pound in 2014.Growers outside the Western U.S. are likely to offset shortages of strawberries, however, the industry’s traditional pattern of drawing supplies from different areas in response to local disruptions such as weather or disease is likely to be tested this time because of the magnitude of the California drought and the state’s dominance in the national supply.”

“Year-round availability of fresh strawberries has significantly influenced their consumption by Americans. They nearly doubled their annual consumption of fresh strawberries since 2002, with per capita consumption rising to almost eight pounds (2012). Annual per capita consumption of frozen strawberries remained consistent at 1.8 pounds in 2012. Although Florida produces about fifteen percent of the nation’s strawberries, it produces nearly all of the berries harvested in the U.S. during the winter months. However, Mexican strawberries also pour into the market during that time. Strawberry imports have risen from 198 billion pounds in 2010 to 302 billion pounds in 2012. Increased production and import of strawberries from Mexico may challenge the future of Florida’s strawberry industry, which showed a decrease in yield from 2011 and 2012. With the increase in production of fresh-market strawberries, the value of production increased due to higher fresh product prices. The total value of U.S. strawberry production in 2012 was over $2.4 billion. Fresh market 2012 market production value totaled just over $2.2 billion, while the value of processed strawberries was nearly $199 million.”

C.E.S.I. Conclusion: -Yes, the above attached data is in fact total market data primarily corresponding to today´s “conventional fresh berry market” simply because there has not been any alternatives – until now. If Optifreeze can secure only 1 % of the 16.8 Billion SEK market, this would correlate to a yearly trade value of 168 MSEK (based on the above attached European Fresh Produce association metrics). Furthermore, Optifreeze will likely establish a broad pipeline of various fruits, berries and vegetables. These parallel markets are also global…

Veggies, fruits stay fresh with new freezing method (youtube video)

What is CEPT?

CEPT is Closed Environment PEF Treatment. PEF is the abbreviation for Pulsed Electric Fields (PEF) or electroporation,  a technique that is routinely used, for example, in the introduction of new genetic materials into cells.

OptiFreeze is the result of a long period of research at the Department of Food Technology, Lund. The company was founded in 2011 by Arc Aroma Pure AB (also listed at aktietorget), LU Innovation and a number of researchers at the Department of Food Technology at Lund University. Operations are based on Skiffervägen in Lund the company conducts method and product development in-house and with partners. In the next few months, the company will, together with partners, industrialize the technology.

The breakthrough press release?

November 17, 2014 Optifreeze Press Release:

Orkla and OptiFreeze have signed an agreement under which Orkla will participate in the industrialization and commercialization of the OptiFreeze technology.

The goal is to implement a market test with treated products in 2015 and achieving large-scale production in 2016. The long-term cooperation agreement means that the parties will jointly contribute to industrialize and commercialize OptiCept ™ and Opticap ™. The goal is that frozen products treated with the OptiFreeze method will be tested on the market in 2015. This will be implemented before a major launch planned in 2016.

This agreement is a very important piece of the puzzle that has fallen into place in the efforts to industrialize and commercialize the company’s products. Orkla is a strategic partner that brings a lot of know-how in a number of important areas, says Fredrik Westman, President OptiFreeze AB. As we previously reported, the pilot tests conducted with Orkla terminated prematurely when the parties were pleased with the results. The collaboration has run very well, Orkla is a competent and important partner. I note that we have now taken an important step forward in accordance with the company’s strategy, while the agreement gives us the opportunity to implement other collaborations with some of the parties (ongoing discussions). These collaborations can be completely separate projects in other segments but also another company within the same project, says Pär Henriksson, Chairman OptiFreeze AB. OptiFreeze is working on several fronts and in discussions with potential international partners. The focus of the objective is to industrialize the company’s products, and find companies that have the capacity to handle the marketing, sales and support at the international level.

Orkla, General business information

Orkla ASA is listed on the Oslo Stock Exchange and headquartered in Oslo, Norway. Orkla is a leading supplier of branded consumer goods and concept solutions to the grocery and out-of-home sectors in the Nordic and Baltic regions. In addition, the Group holds good positions in certain product categories in India, the Czech Republic, Austria and Russia. The company is also a major supplier to the European bakery market. Orkla’s vision is to improve everyday life with healthier and more enjoyable local brands. As at 31 December 2013, Orkla had around 17,000 employees. The Group’s turnover in 2013 totalled NOK 33 billion.

C.E.S.I. Conclusion: Orkla seems to be a perfect match for Optifreeze. The successful Optifreeze-Orkla pilot test was a critical milestone for Optifreeze company.

Comments from the CEO Fredrik Westman (November 26, 2014, edited and translated by C.E.S.I.)

“In recent months we have made great progress and we are approaching one of the most important goals at a rapid pace; industrializing the OptiFreeze technology. Our products OptiCept ™ and Opticap ™ allows food industries making the impossible possible, namely to freeze products that normally do not tolerate freezing. Thus, we have the potential to transform the market for frozen vegetables, fruits and berries. The reason is that we have the knowledge and a unique technology to open new markets, products and business opportunities.

With our technology, sun-ripened fruits and berries in South America can be harvested at exactly the right time, cut into perfect pieces, frozen at the very same place and finally transported to the food, bakery and confectionery businesses and consumers around the world. Swedish berry companies can export red and sweet strawberries to the Swedish communities in North America. African vegetable and fruit growers are given the opportunity to refine and sell great products for example in Asia and Europe. Examples of opportunities are many and it has become increasingly evident that OptiFreeze has a technology that has the potential to change the conditions for growers, distributors, food processors and refrigeration technology companies, consumers, restaurants, pastry shops and bakeries. New types of products can be offered in new ways to new markets. Thus, we make it possible to add value and profitability in a variety of industries.

Since the last report, we have reached another important goal, namely signed an agreement with Orkla to cooperate closely where we jointly industrialize and commercialize the company’s technology. Having a reliable industrial partner who believes in OptiFreeze and our technology and its capabilities brings us even closer to industrialize the technology. The work has been flying start. Currently the company’s product and method developers are working together with, among other things, Pär Henriksson and Anders Boman at Arc Aroma Pure and several other people with the up scaling of the technology. The work is supported by knowledgeable and experienced people in OptiFreeze´s newly elected Board of Directors. Within a few months, we have built a team of employees, board members and partners.

Currently, we are evaluating a range of potential partners and strategies and we are well aware that the company has a technology that food industries and freezing technology companies are interested of. But we are also careful that future policy options are not closed. We do not want to rush off and give any actor great benefits without the shareholders and the company guaranteed to make a profitable deal in return. And a company that has the potential to transform the market for frozen products can afford to set high standards.

In Q3, the company completed yet another essential measure of the company’s strategy by completing what we call “tech transfer”, the transfer of technology from the university to the company, which means we are now engaged in the development of methodology in their own labs. During the quarter we invested quite a lot of money in lab equipment. In return, facilitated cooperation with our partners and we can focus more on development work faster leading to cash flow. Meanwhile, we have a fantastic collaboration with researchers at the Department of Food Technology at Lund University.

Now, we are continuing at a rapid pace so that we achieve our goals. In particular, we industrialize our technology so that we can sell the products. Because that’s basically the products in combination with the knowledge contained in OptiFreeze that can change the market and help us earn money.”

Hearing with the Optifreeze CEO Fredrik Westman and the chairman of the board Pär Henriksson (May 8, 2014, selected questions edited and translated by C.E.S.I., full version in Swedish here)

Alias Axl08: Hi! How does the company in five years?

Optifreeze: In 5 years we are a company that comprehensively focuses on methodology and technology to take us into new markets and be able to apply the method to new products. In 5 years we have become a famous brand in the food sector, from producer to consumer.

Alias Purfärsk: Is there anyone, as far as you know, who have tested similar technology to freeze food?

Optifreeze: No, we are not aware of any similar technology.

Alias Purfärsk: What is the biggest challenge for OptiFreeze the next two years?

Optifreeze: The biggest challenge is to scale up from pilot to full scale. And to strengthen the team. We are focused on the task and the company has a number of driven people who work hard.

“We will work hard to lift out the methodology and technology from the research environment to commercial application.

Alias jordgubben (edited/shortened question): ”I can understand that electroporation can reach the strawberry´s outer cell layers. Will the electroporation also reach the inner parts of the berry? After treatment, will then the berry be “totally perforated” or what is the outcome?

Optifreeze: It is not only the outer parts of the product that is treated. It is also the inner parts. In fact, it is easier to treat the inner part of the strawberry.

Alias jordgubben: Is the technique also applicable on fruits and berries that must be peeled (hesperidum)

Optifreeze: In principle, yes: If the peel is relatively thin. We aim to explore the technique on apples

Alias jordgubben: How does thickness and size of the substrate correlate to the  result of the treatment?

Optifreeze: In principle, size and thickness are of no relevance, but today we find the treatment simpler for smaller products. Currently, scale-up work is being pursued to enable treatment of larger products.

Alias jordgubben: You raised money in a share rights issue. How long do you estimate this money will last (May 8, 2014)?

Optifreeze: The money should last for approximately two years.

Alias Ess: What is the cost of treatment of 1 g of product? How much energy is consumed?

Optifreeze: Today, the cost is 1,5-8 SEK per kilogram and included is cost of compound (protein and sugars)

Alias Nyfiken: Many research companies remain in the lab for years. How will you avoid this and instead be successful in the market place.

Optifreeze: Already, we have started the productification work and aligned our work in a way that the company can start making money from sales of OptiCept and OptiCap. We have ”cut the umbilical cord” with the researchers at Faculty of Engineering LTH (Lund University), but we will continue our collaboration. Jointly, we will explore new applications and products. However, currently we focus on vegetables, berries and fruits of interest for the food industry.

Moderator: Is Optifreeze dependent of the Arc Aroma Pure´s CEPT-technique?

Optifreeze: No! There´s other providers of generators, but we benefit from having access to the competence provided by Arc Aroma Pure.

Moderator: Which OptiFreeze – Arc Aroma Pure collaboration opportunities and synergies do you see?

Optifreeze: Optifreeze is a company which focuses on chemistry and food. Product development will be in focus. Arc Aroma Pure is specialized in electronics and product development. We believe we will complement each other. Arc Aroma Pure is a more mature company, administration included, and the company has been listed (Aktietorget) for a longer time. Therefore, Arc Aroma Pure is also more mature in respect to leadership, quality and internal routines. Furthermore, the company is specialized within electronics and product development. Within all these areas, the companies can mutually benefit from collaborations.

Moderator: Can Optifreeze be classified as a GMO company (GMO = Genetically Modified Organism)? Thus, are the product´s genes modified?

Optifreeze: No, we do not modify the genes in the treated products.

Moderator: How will you secure that the market place won´t classify your products as GMO products?

Optifreeze: We capture all possible opportunities to inform about our methodology and at these occasions we also stress that our business is not about modifying genes.

Alias a: Who are your competitors?

Optifreeze: Conventional freeze technology and air transport of immature products. For example, there are a company that combines drying and freezing, but then water must be added during the thaw process. Today, we face no direct competition. In addition, we believe our patent portfolio is strong.

Alias a: Could you inform us about the company´s business- and revenue model?

Optifreeze: We will charge both for the treatment line entitled OptiCept and for Opticap that is the compounds, namely sugars and anti freeze protein. OptiCap will generate recurring revenues.

Alias Ess: Will you apply for a US version of the CE mark?

Optifreeze: Yes, that is for sure. However, this is a future plan.

Alias a: Have you industrialized the process? Have you demonstrated the process to be successful also in a non research lab environment?

Optifreeze: Currently and already, we have the capacity to treat products in kilogram scale. The planned pilot project will address scale-up in an industrial setting (2014-05-08 10:23) C.E.S.I.: IMPORTANT NOTE: The outcome of this pilot project was successful – Please see the full version press release attached above (November 17, 2014 Optifreeze Press Release: Orkla and OptiFreeze have signed an agreement under which Orkla will participate in the industrialization and commercialization of the OptiFreeze technology.)

Alias a: Are all necessary permissions already granted by Livsmedelsverket (National Food Agency)? (2014-05-08)

Optifreeze: We have had this discussion with specialists from a food industry company. Their conclusion is that no specific permissions are needed. The relevant question is if information should be printed on the product´s table of content. The added compounds are natural compounds and these are also used in other products such as ice cream etc.

Moderator: What is the cost of treatment (fruits, berries and vegetables)?

Optifreeze: We plan to charge 12000 SEK for the OptiCept™ cassette. One cassette is dimensioned for a range of 1.5-4 metric tonnes of product. This translates to an additional product cost range of 1.5-8 SEK / kilogram of product excluding capital- and cost of production.” (2014-05-08)

Note: Currently, C.E.S.I. does not understand the meaning of “capital-” in this stated phrase.

Alias jordgubben: Is there a risk that access to anti freeze protein will be limited and thereby a liability for Optifreeze?

Optifreeze: In the past, the access to antifreeze protein was limited, but currently both the usage and the access are increasing. Therefore, the price of anti freeze protein is rapidly falling.

Alias Ess: Will the company Arc Aroma Pure be a long term owner (also post the May 2014 share rights issue)?

Optifreeze: Yes.

Alias a: The Optifreeze methodology seems to aggressively increase cost compared to conventional freezing. How will your customers motivate this fact?

Optifreeze: – By increased quality, less waste, better access, new products and lower transportation costs. In addition, only a very small amount of compound is used per kilogram and the price of the compound is rapidly decreasing.

Moderator: Will the food industry increase the price on products that have been treated with your method? Will the end customer pay a higher price compared to today?

Optifreeze: Champagne and Swedish strawberries on New Year’s Eve! We believe a higher cost will be accepted. However, it is fundamentally impossible to answer this question today. Some products that today are conventionally freezed can potentially be replaced be replaced with our products/technology. But the primary driver for the food industry companies is new products to market, independently of the year´s season or geographical distance. It is these business opportunities that attract the food industry companies.

Alias a: Have you performed market research in the aspect of price sensitivity? What type of feedback is obtained regarding the increased cost (1.5 – 8 SEK / kilogram)?

Optifreeze: Yes, we have performed through market research and the food industry´s interest is strong. The food industry predicts that they can increase the number of products and also revenue.

Alias a: What is today´s number of employers? (May 8, 2014)

Optifreeze: One employed method- and product developer. A hard working board and several (paid) consultants.

Moderator: Which products can be treated with this method?

Optifreeze: We have performed sharp tests on spinach, strawberry and parsnip. Generally, the method is most successfully applied on vegetables, fruits and berries with homogenous structures.

Moderator: How large is the market for the Optifreeze products? Can the market be estimated in financial terms?

Optifreeze: It is impossible to estimate the market in financial terms. The only thing we do know is that food industry companies visualize business opportunities, because they can offer new markets and new products, but also old product in a new regime. We also know that there are new products out there waiting to be produced. We have a squared sheet of paper in front of us and on this paper only a few squares are currently filled.

Moderator: When will Optifreeze launch the first product (May 8, 2014)?

Optifreeze: The goal is to sell the first two CEPT platforms next year, 2015

Moderator: Who will buy the products? Who is the customer?

Optifreeze: A simple question but still hard to answer. The user is a food industry company holding a segment of freeze products or a company that desire such a segment. The customer might be the actual company but also a provider of production systems or freezing facilities or even a company within logistics that provides custom services

Alias jordgubben: Are the result affected by the actual freezing temperature?

Optifreeze: To some degree. Today, well-controlled industrial freezers must be used.

Moderator: Are there currently ongoing discussions with food industry companies and/or Freeze technology?

Optifreeze: We have very good contacts within both food industry companies and freeze technology companies. The feeling is very positive due to that a few companies actually have contacted us, not vice versa. These companies are curious and interested. We have had a live demonstration of the method and since the interest has grown even stronger.

Alias a: Will this technique replace current freezing technology or is it a complementary technology – a “niche technique” – that focuses on a specific area?

Optifreeze: Primarily, our technique is a complement but will presumably be a replacement in some cases, e. g. when immature vegetables, fruits and berries are air transported to customers. A relevant example is strawberries. Frozen strawberries are easily accessed, but the applications are limited due to the low quality of conventionally frozen strawberries. We want to change this fact.

Moderator: Is it the end customer that will thaw the products?

Optifreeze: Yes feels like the natural answer, but it could be the retailer that will thaw the products and subsequently sell them as fresh products.

Alias a: How do you define industrial scale? What is the capacity per machine?

Optifreeze: That depends on the customer, but more likely metric tonnes than kilograms.

Alias a: What is your estimated turnaround- and revenue growth in the next 2-3 years?

Optifreeze: In 2017, Optifreeze aim to have 6 OptiCept in production.

Alias a: Which are the greatest risks in the company and the strategy?

Optifreeze: Technical risks during scale-up, that the market will erroneously classify us as a GMO business, key persons that leave the company, funding and external world factors. In fact, a lot, but we are focused on our task.

Alias a: Will there be Optifreeze industries which will freeze products on demand or will you solely provide installations at the customer´s facilities (as the Nespresso-concept)?

Optifreeze: We will not hold own industries. We will solely sell installations and compounds, but as previously stated: We aim to become a method- and technology development company.

Alias a: What is your estimate of profit margin?

Optifreeze: Final price = Cost of production x 5 (C.E.S.I. : !).

Optifreeze patent family (2013):

Patent

Patentnummer                             Land

8 563 060                                     USA

2 201 084                                     Finland

2 201 084                                     Frankrike

60 2008 023 322.7                     Tyskland

2 201 084                                     Ungern

2 201 084                                     Italien

2 201 084                                     Holland

2 201 084                                     Polen

2 201 084                                     Spanien

2 201 084                                     Sverige

2 201 084                                     Schweiz/Liechtenstein

2 201 084                                     Storbritannien

Source: http://www.aktietorget.se/pressdocs/optifreeze/documents/optifreeze%20-%20memorandum%202014%20-%20final-1.pdf (p 25)

 

Financials:

OptiFreeze: Interim Report 2014-01-01 – 2014-09-30

Summary of Q1 – Q3 2014

The following summary covers the period 2014-01-01 to 2014-09-30 with comparative period 2013-01-01 to 2013-09-30.

  • Revenues for the period amounted to SEK 0 (0 EUR)
  • Profit for the period amounted to -1,847,168 SEK (-46 544 SEK)
  • Cash and cash equivalents amounted to 8,076,791 SEK of which 8,000,000 SEK in interest-bearing investment
  • Capitalized costs amount to 179 028 SEK (0 USD)
  • Number of shares amounts to 7,800,000 pieces
  • Earnings per share -0.24
  • Equity ratio 89.8%

Summary of Q3 2014

The following summary covers the period 2014-07-01 to 2014-09-30 with comparative period 2013-07-01 – 2013-09-30.

  • Profit for the period amounted to -802 374 SEK (-42 844 SEK)

Optifreeze: Further reading (In Swedish):

“Full original story” (Memorandum) http://www.aktietorget.se/pressdocs/optifreeze/documents/optifreeze%20-%20memorandum%202014%20-%20final-1.pdf

http://upbis.com/ag/pdf-analyses/optifreeze.pdf

Swedish television highlights Optifreeze (SVT): http://www.svt.se/nyheter/vetenskap/ny-frysmetod-for-gronsaker

http://bit.ly/H7Zn2c

The above attached SVT link can only be accessed from sweden (copywrite limitation)

http://optifreeze.se/

http://www.redeye.se/aktiebloggen/optifreeze-brannhet-nylistning

Further reading – Strawberries metrics 

http://www.fred.ifas.ufl.edu/pdf/webinar/Strawberry.pdf

Further reading – Spinach metrics

http://www.agmrc.org/commodities__products/vegetables/spinach-profile/

Best regards, CESI

The author, Cutting Edge Science Invest, is currently an Optifreeze share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

 

Introduction

Arc Aroma Pure develops a system, which has the potential to substantially improve efficiency of biogas production and reduce greenhouse gas emissions. Through the optimization of biogas production, more energy can be extracted from the organic material. However, let´s start to answer a few questions: What is biogas, how is it produced and why will greenhouse gas emissions be reduced using the Arc Aroma pure technology?

Biogas – Definition and climate benefits 

Biogas could be defined as “a mixture of methane and carbon dioxide produced by the bacterial decomposition of organic wastes and used as a fuel”. Biogas is a renewable fuel that is part of the natural cycle. Biogas consists mainly of 65 percent methane (CH4) and 35 percent carbon dioxide (CO2). Methane, CH4, is the high-energy main component of biogas. Methane is also a potent greenhouse gas with 20-25 times stronger greenhouse effect than carbon dioxide. The combustion of methane is carbon dioxide and water. The carbon dioxide released by the combustion of biogas is converted within nature’s own cycle

Biogas production

Most organic materials can be used for biogas production. A large percentage of these materials are in the agricultural sector in the form of manure from livestock and residues and waste from crop production

In a biogas plant this natural process is utilized. In this process, a material such as sewage sludge, manure, agricultural crops and food waste is placed or pumped into a digester, which is a completely airtight container. In some cases, pretreatment necessary for reception, pumping, mixing and degradation to function optimally.

The gas in the digestion chamber is normally saturated with water vapor. In addition to the biogas, a nutritious digestate is formed, which can be used as a fertilizing agent.

The anaerobic digestion process can be divided into three main stages; hydrolysis, fermentation and methane production.

In the first step, complex organic compounds are decomposed into smaller compounds such as sugar and amino acids by microorganisms and enzymes .

The second step is fermentation. During fermentation, a large a number of intermediate products are formed, including alcohols, fatty acids and hydrogen gas.

In the last step of the digestion process, methane gas is formed by an unique group of microorganisms.

Biogas applications

Biogas can replace fossil fuels and reduce CO2 emissions. Purified biogas can be used to power vehicles. The energy in the biogas can also be used for heating, either locally or through district heating networks. Another application is production of electricity, which may contribute to an increased proportion of green electricity into the grid. The fastest growing area of use is biofuel. Methane molecule can also be used as raw materials in manufacturing processes. Examples of products where methane may be included as raw materials include paints, plastics, furniture, feed and lubricating oils. (www.biogasportalen.se)

What makes Arc Aroma Pure a cleantech / greentech company?

Arc Aroma Pure develops a pretreatment facility that enables optimization of biogas production. In most biogas substrates, a major part of the nutrients are encapsulated (=hidden), which means that the digestion process is not optimally auto catalyzed. Thus, the digestion process will be slow. CEPT® acts directly at the cellular level and smashes structures which results in a faster fermentation process and a higher yield of released gas(es).

Furthermore, there is an unmet need from biogas manufacturers to use new substrates. A breakdown of the raw material at the cellular level opens the possibility of using new raw materials that have not previously been considered suitable for biogas production. In addition, there is further potential to use technology as a cool and energy efficient alternative to heat-based sanitation (cleaning of raw material for biogas production). The company’s main focus in the current situation is the efficiency of biogas production.

What is CEPT? CEPT is Closed Environment PEF Treatment. PEF is the abbreviation for Pulsed Electric Fields (PEF) or electroporation,  a technique that is routinely used, for example, in the introduction of new genetic materials into cells. The Arc Aroma Pure system is pre-installed in container modules to facilitate an easy connection to the customers´curent production lines (!).

Evaluation of the potential of CEPT®

In the fall of 2009, Arc Aroma Pure signed an agreement with a leading energy group on a jointly funded feasibility study. In 2010, the collaboration was extended and the Arc Aroma Pure technology was verified both in lab scale and process scale. The parties agreed that the technology can be used as a substitute for heat-based pasteurization. Laboratory experiments also showed that the technique can radically streamline the production.

During the fall of 2012, the parties completed the agreement with an appendix concerning a large-scale trial which is still active today. The major identified advantages were:

Energy efficient sanitation
More efficient digestion
A higher gas yield was observed.
The downtime of the process was also minimized
The investment as such was also minimized
The total process was optimized
The technology aided a continuous process (equals better utilization of capacity) utilization)
A desire to use new substrate was identified by (Pulp and paper industry)

arcaroma saving

About Arc Aroma Pure

Arc Aroma Pure AB was founded in 2008 after a long period of research and development for various applications based on electroporation. The management team consists of Pär Henriksson, CEO with extensive experience as an innovator and entrepreneur, Martin Hagbyhn former CEO Purac and Kockums and Anders Hättmark with extensive experience in business development and recruitment

The concept behind the CEPT is based on electroporation, a proven technology, used today in micro and molecular biology. It is a continuous process that act directly on cells and structures by short, pulsed electric field creates pores in the cell membrane and cell walls. This leads to the death of microorganisms and nutrients from different types of raw materials are released and become more readily available for digestion. The result is faster fermentation and a higher gas exchange.

Depending  on the substrate composition in the substrate, the Arc Aroma Pure CEPT® pre-treatment improves the methane production yield by 15–50 % (!). Additionally, the fermentation rate is increased allowing for the higher yield to be produced in shorter time than without a CEPT pre-treatment. This fact allows for the hold time in the reactor to be reduced allowing the plant to convert larger amounts of raw material to gas in the same timeframe. The target markets are biogas producers, technical consulting companies, wastewater treatment plants, universities and scientists plus a host of applications for other target markets. In 2014 there will be a global launch of the CEPT starting in the Nordics. 

Other identified and creative applications of Arc Aroma Pure clean technology – In ballast water treatment.

Ballast water treatment today is heavily discussed today, primarily due to that marine ecosystem are being mixed up. Alien marine species have been found in areas where they do not belong, which has led to disruptions including the fishing industries. This is a global concern. IMO classifies the above problem as fourth biggest threat of the oceans. This led to the convention “Control and Management of Ships’ Ballast Water Sediments” adopted in 2004. The Convention phases in purification methods (as required) with the start of the smaller boats in 2009. CEPT® treatment involves a biological treatment of pumpable products and therefore it can be used with great benefits as it is both energy efficient and also more environmentally friendly than alternative methods. This is due to that the purification occurs without heating of the water or addition of chemicals.

http://en.wikipedia.org/wiki/Ballast_water_discharge_and_the_environment

http://www.arcaromapure.se/?page_id=89

Other identified and creative applications of Arc Aroma Pure clean technology –  in Water and Food

In addition to the biogas application, the board believes that the CEPT® platform,will add value as an energy efficient alternative to biological treatment of liquid products. Heat is traditionally used in the purification / sanitizing processes, for example within water and liquid food. In this context, the process is called pasteurization. Pasteurization is a generic term for various techniques in which food is heated to a certain temperature for a certain time. This is performed with the aim to kill harmful bacteria and microorganisms. The CEPT® platform can perform this without heating, and this is called cold pasteurization. Cold pasteurization has great advantages over conventional pasteurization because the treated product is not affected in respect to either taste or texture. For example, CEPT® treated juice tastes just like freshly squeezed juice. Also protein-rich foods are interesting candidates for CEPT® treatment, as these can not be heat treated because proteins denature and solidify when exposed to heat. CEPT® technology ca also be applied in the purification of water. Contrary to heat based pasteurization, heat resistant effectively kill heat resistant microorganisms. Furthermore, cold pasteurization is significantly more energy efficient and cost effective in comparison to heat-based pasteurization. The supply of clean water is a growing problem in many parts of the world. The consequence is an increasing demand for environmentally friendly and cost effective water purification methodologies. Here, CEPT® could play a decisive role in the future as it is both environmentally friendly and cost effective. Why? The Arc Aroma pure technology is both energy efficient and avoids addition of chemicals. This is in contrast to the majority of water treatment options available on the market today.

Other identified and creative applications of Arc Aroma Pure clean technology – Optifreeze 

Arc Aroma Pure holds approximately 27 percent of the shares in another company, namely OptiFreeze AB. Pär Henriksson (CEO and director of Arc Aroma Pure) is the CEO of Optifreeze and Anders Hättmark is a Optifreeze director (and also a board member of Arc Aroma Pure).

OptiFreeze and the link to the Arc Aroma Pure technology could be summarized with the following points: Patent pending freeze technology that allows fruits and vegetables to retain their flavor and shape even after thawing. OptiFreeze AB apply the Arc Aroma Pure technique in its pre-treatment facilities and is thus dependent on the Arc Aroma Pure’s technology.

When fruits and vegetables are thawed after freezing, crystals grow so fast that the cell structure collapses. By controlling the fluid inside and outside the cells, the cell structures are safeguarded. The technique is based on the application of vacuum technology along with PEF treatment. The treatment enables cell survival, which in turn leads to that the food flavor, texture and quality will be maintained throughout the freezing and thawing process!

Arc Aroma Pure – The 2015 Vision

“In 2015 Arc Aroma Pure AB, will be a well known company in the region. CEPT® is a popular brand that stands for innovative and environmentally conscious relationship with customers and end users. “A pre-processing based on CEPT® platform will be the obvious choice for the efficiency of the biogas industry and Arc Aroma Pure will be a research-based and well-respected player in the global cleantech market. This will be achieved by the following Arc Aroma Pure activities: Development, manufacturing and marketing of a patented and ready to use CEPT®-line pretreatment of biogas industry substrates. In the following step, other applications and customer segments will be explored.”

Arc Aroma Pure’s CEO Per Henriksson very recently presented the company´s technology at “Gasdagarna” (October 22 to 23 in Båstad, Sweden). Gasdagarna was organized by the industry association Energy Gas Sweden. The event is aimed at companies and organizations in the field of energy gases, where biogas is an important part. The company also had a booth and presented the CEPT product. “The invitation was a result of the interest in the technology among biogas producers. Our presence in Gasdagarna will be an important step as we now entering a market, ” said Pär Henriksson, CEO, inventor and founder of Arc Aroma Pure.

 

Intellectual property, patent strategy and patent situation

Patent situation according to the low quality Arc Aroma Pure home page:

patent arc aroma pure

Arc Aroma Pure’s patent strategy is focusing on the generator construction design and its synchronization, and the treatment chamber to ensure a stable environment. The generator consists of several modules that are optically synchronized, these are constructed from available simple components. The treatment chamber is designed as a positive pump, which ensures a stable environment. This solution is scalable and can be customized as needed. Included in the patent is also a description of the method and a number of listed applications and substrates. Arc Aroma Pure intends to apply for additional patents in the event that the Board determines that the Company’s intellectual property protection can be further strengthened. A protected trademark (403,502) for CEPT® is also granted. The patents and the trademark is owned by Arc Aroma Pure.

However, recently it seems that a Isreal- ,Chinese-, European- and US- patent has been approved. 

https://www.avanza.se/placera/pressmeddelanden/2014/08/18/arcaroma-europeiska-patentverket-godkanner-patentansokan.html

http://www.sydsvenskan.se/ekonomi/lundabolag-far-europapatent/

https://www.avanza.se/placera/pressmeddelanden/2013/04/03/arcaroma-positivt-svar-fran-us-patent-and-trademark-office.html

https://www.avanza.se/placera/pressmeddelanden/2013/06/27/arcaroma-patent-beviljat-i-kina.html

https://www.avanza.se/placera/pressmeddelanden/2014/06/09/arcaroma-godkant-patent-och-bolaget-uppmarksammat-i-media.html

Per Henriksson, founder and president (translated and slightly edited by C.E.S.I!)

“I believe CEPT® will make biogas production more profitable and become independent from state aid and subsidies. The technique can also be used in decentralized production of smaller plants. It is my hope that previously unprofitable commodities can be used even without the need to invest in the costly generation II technology (gasification). In 2009 produced, approximately 1.4 TWh of biogas was produced in 229 facilities in Sweden. The industry has a relatively aggressive expansion plan, the “Vision 2020″, which states that Swedish biogas plants shall produce in total 20 TWh in 2020. To meet this goal, new substrates, which today are not profitable to use, must be successfully introduced. CEPT® smashes structures and releases nutrients. Therefore, we have high hopes that even some crops, algae, seaweed, and by-products from the forest industry can be used with the help of the CEPT® platform, which would represent a paradigm shift. In the leading biogas nation, Germany, a new biogas plant is started every eight hours. Sweden has a less honorable track record, but we have high hopes of being able to alter the development of biogas production, initially in Sweden and then internationally.”

http://www.arcaromapure.se/?page_id=33

A 2014 status report (the year´s key press releases translated, edited and summarized by C.E.S.I.)

  • February 11 ,2014: Arc Aroma Pure AB has signed an agreement on cooperation with Nordic Water Products AB (press release translated by C.E.S.I.)

Arc Aroma Pure and Nordic Water Products AB has for some months been performing pilot attempt at a wastewater treatment plant, where the two companies’ technologies are combined in order to see if we can achieve a heightened effect. The trials have been successful and full-scale test will therefore start in spring 2014 and last for about six months. The full-scale test is designed to verify the synergistic effects observed in the pilot tests. Currently, Arc Aroma Pure believes that the results may be published only after the full-scale test ended. If the results of the full-scale test is positive, the companies intend to enter an agreement which will state that Nordic Water Products AB will market and sell the combined technologies globally, through subsidiaries and distributors. Arc Aroma Pure’s CEPT® platform will then be included as a component in the combined technique.

Nordic Water Products AB develops and markets mechanical and engineering products and technologies for the treatment of water and wastewater to municipal and industrial customers worldwide. “We are very pleased that we have now reached the point where we can start full-scale tests. If the tests turn out well, we have a partner with a solid reputation in the global market. Nordic Water is an innovative company with several exciting products on the market. Working with a company such as Nordic Water, gives us credibility and access to a very extensive global marketing and distribution network, ” says Pär Henriksson, President of Arc Aroma Pure AB.

“Nordic Water sees great potential in the combined techniques with many applications in our segment wastewater. We are actively seeking new innovative Swedish technology and Arc Aroma Pure suits us well because the company represents innovation and curiosity,” says Göran Arnkil, Partner, Nordic Water Products AB.

https://www.avanza.se/placera/pressmeddelanden/2014/02/11/arcaroma-arc-aroma-pure-ab-publ-har-traffat-en-overenskommelse-om-samarbete-med-nordic-water-products-ab.html

  • April 15, 2014: Arc Aroma Pure AB has entered into an agreement for the evaluation and selling of CEPT® platform (press release translated by C.E.S.I.)

Arc Aroma Pure AB looks forward to working with BroGas, not least because the BroGas biogas plant is very well maintained and possesses great skills. Arc Aroma Pure will, in cooperation with BroGas, further develop the company CEPT® platform.

Meanwhile BroGas strive to increase the efficiency of biogas production. Together the companies will evaluate and analyze CEPT®-platform benefits of biogas production. It is also part of the agreement that BroGas will assist and participate in the visits and views for future customers and stakeholders. The plant will therefore be an important future demo site. In parallel, Arc Aroma Pure will own the right to use the built-in function for remote access to enable viewing of a facility in operation at the continued marketing. As compensation, BroGas has been offered a discounted price if the companies choose to implement a commercial business.

Normally, the Arc Aroma Pure pricing is based on a payback period of less than 36 months, which corresponds to the value generated by the pretreatment with CEPT® platform in terms of biogas production.

“I look forward to a good partnership and mutual benefit. BroGas feels like the right partner. I am confident that we will have a demonstration facility that attracts visitors, while BroGas simultaneously can streamline their biogas production and achieve better profitability. After conducting large-scale tests of a biogas plant in the southern part of Sweden, we have produced the first three industrial CEPT® platforms and it’s a big step forward for the company that we can now begin a collaboration with an additional reliable and professional partner”, says Pär Henriksson CEO Arc Aroma Pure AB.

Arc Aroma Pure AB has conducted large-scale tests of a biogas plant in southern Sweden and found that the platform will lead to tangible improvements in efficiency while the technology enables new substrates which can be used for biogas production. Furthermore, the tests suggest that, in the future, the CEPT® platform, may replace the expensive and energy-consuming heat-based sanitation. “We want to be at the frontier in terms of biogas production and we believe in the basic technology CEPT® platform is based upon. Therefore, we have high hopes that the installation will lead to a clear increase in biogas production, says Magnus Ahlsten, Chairman BroGas. The companies’ collaboration will start in April and commissioning of CEPT® platform is planned for 2014. The evaluation phase is expected to be completed in autumn 2014.

https://www.avanza.se/placera/pressmeddelanden/2014/04/15/arcaroma-arc-aroma-pure-ab-har-ingatt-avtal-om-utvardering-och-forsaljning-av-cept-plattform.html

  • May 13, 2014: Optifreeze in Swedish National Television: http://www.svt.se/nyheter/vetenskap/ny-frysmetod-for-gronsaker

(Optifreeze is utilizing the Arc Aroma Pure´s technology. Arc Aroma Pure holds approximately 30% of the shares in Optifreeze, see below for more information)

  • June 19, 2014: Industrial scale testing in collaboration with Swedish Biogas International AB (press release translated and summarized by C.E.S.I.)

Arc Aroma Pure AB and Swedish Biogas International AB has signed an agreement to conduct full-scale tests of the AAP’s CEPT® platform industrially at one of SBI’s biogas plants. These facilities are located in Lidköping, Örebro, Västerås and Jordberga. A first project meeting took place in week 25. The CEPT® platform will be evaluated in operation for about nine months. The agreement means that SBI is given the opportunity to take over CEPT® platform and paves the way for the installation of additional CEPT® platforms within the SBI Group. The board of Arc Aroma Pure estimates that revenues for the company in connection with the current cooperation with SBI can be generated beginning in Q4 2014.

With this agreement, the Arc Aroma Pure now reached the target to launch three pilot partnerships. The promotion will continue and be intensified.

“Arc Aroma Pure has achieved several important goals with the SBI agreement. Furthermore, the Arc Aroma Pure has now established another important reference facility and simultanously made agreements and begun deployment of all CEPT® platforms in the zero series. Commissioning of the three CEPT® platforms gives us several important reference objects where biogas producers and other interested parties can see and evaluate the platform in an industrial operation. The three reference sites provide further opportunities for Arc Aroma Pure to collect data that could be important to attach and highlight in the marketing. That is: Data that provide “proof” that our CEPT® leads to a significant increase in efficiency of biogas production”, says Pär Henriksson, President of Arc Aroma Pure AB .

https://www.avanza.se/placera/pressmeddelanden/2014/06/19/arcaroma-industriellt-fullskaliga-tester-i-samarbete-med-swedish-biogas-international-ab.html

  • August 14, Two CEPT® generators sold to OptiFreeze and cooperation agreements signed (press release translated and edited by C.E.S.I.)

OptiFreeze AB has ordered equipment from Arc Aroma Pure AB for a total value of 894 000 SEK. The order includes two CEPT® generators, a lab CEPT® and a mini-CEPT®. In addition, the parties have signed an agreement under which Arc Aroma Pure will provide consulting services and materials to the Optifreeze planned pilot plant.

The two ordered CEPT® generators, are simplified versions of the CEPT® generator used in the company’s pre-treatment container for biogas substrates. One of the generators is called lab-CEPT® and will be used in the laboratory for internal attempts at OptiFreeze. The second generator, entitled the mini-CEPT®, will be used in pilot experiments in food industrial environment.

The two generators will be delivered in the coming weeks. Arc Aroma Pure CEPT® generator is modular and can be delivered in different configurations, with capacities ranging from a few kW to several MW pulse power, which is adapted to customer needs. The Arc Aroma biogas or water treatment platform includes two powerful CEPT® generators. The CEPT® platform can be used in a wide variety of areas, some examples of interesting applications are pasteurization and increased extraction of juice or olive oil (C.E.S.I. prediction: juice= next press release!?)

In addition to the order of two CEPT® generators, the companies have entered into an operating agreement that will further build value on the earlier collaboration. The agreement means that OptiFreeze purchases consulting hours and materials of Arc Aroma Pure AB needed for the the construction of the pilot plant in Eslöv.

“Historically, the companies have had an extensive collaboration. The newly signed contracts concretize that collaboration. We consider OptiFreeze as an important customer, not least because of its potential, but also as an important partner and as an investment. Arc Aroma Pure is actively working on several fronts where biogas optimization is the main focus. We have very high hopes that our CEPT® technology will be well received in both biogas and water treatment area, but we also have prospective partners and customers in other application areas that we should explore and develop in the near future. The company faces a breakthrough“, says Pär Henriksson, President of Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/08/14/arcaroma-tva-cept-generatorer-salda-till-optifreeze-samt-samarbetsavtal-tecknat.html

  • September 5, 2014, Arc Aroma Pure has sold CEPT® equipment to Klippan Municipality (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB has sold CEPT® equipment to Klippan Municipality. The equipment is part of a pilot project run in conjunction with the municipality and Nordic Water AB. The purchase price amounts to 7 million, AAP co-finances the project with about 3 MILLION.

Arc Aroma Pure AB has reached an important milestone with the sale of CEPT® equipment to Klippan Municipality. The equipment included in the pilot project previously announced, the purchase price amounts to SEK 7 million. As a project participant is co-financing the project with AAP about 3 MILLION. Other partners and funders in the pilot is Nordic Water AB and Klippan Municipality. The Swedish Energy Agency is supporting the project.

“The purchase agreement is an important milestone in Arc Aroma Pure’s history and at the same time a great recognition of our technology. The project is located on the boundary between water treatment and biogas production, which is a huge market where our CEPT® technology has very good prospects. The wastewater treatment plants provides large amounts of sludge. This means great opportunities for our technology CEPT®, due to the fact that CEPT® processing has increased the capacity of the treatment plants and reduces the amount of residual sludge. Likewise, the amount of biogas produced will increase both in terms of yield and total amount“, said PO Rosenqvist, Chairman and Marketing Director at Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/09/05/arcaroma-arc-aroma-pure-har-salt-cept-utrustning-till-klippans-kommun.html

 

  • September 15, Arc Aroma Pure and Malmberg Water AB has signed an agreement (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB (AAP) and Malmberg Water AB (MWAB) have signed a cooperation agreement which states that MWAB will market and sell BioCEPT® biogas operators in a number of markets around the world. The agreement has a sales value of 50 million per year and the volume is expected to increase over time.

MWAB start their marketing efforts directly with the activities supported by the AAP in Sweden and abroad. MWAB currently has conducted nearly 100 plants for biogas upgrade in Europe and China. Biocept ™ is a natural supplement for MWABs catalog and marketing plan. The agreement also includes aftermarket and product development.

“Malmberg Water is an impressive partner who has shown tremendous growth in the segment of biogas. I am confident that this agreement will make a clear imprint in our sales figures. We now have the opportunity to partner with a company that has a long history and driven by a strong environmental commitment, combined with strong capabilities in several interesting segments. MWAB have shown a great deal of knowledge, insight, and not least, a great deal of enthusiasm about the opportunity to market our Biocept ™, “said PO Rosenqvist, Chairman and Marketing Director at Arc Aroma Pure AB.

“Now we can offer another innovative process solutions in water treatment and biogas, and it will be a great value to both our existing and future customers. Marketing of Biocept ™ is focused towards key customers and the signals we receive are positive. We are confident that CEPT® technology can contribute to a substantial optimization of biogas production and will be an important element in the construction of the energy neutral wastewater treatment plant”, says Per Johansson, Business Area Manager at Malmberg Water AB.

https://www.avanza.se/placera/pressmeddelanden/2014/09/15/arcaroma-arc-aroma-pure-och-malmberg-water-ab-har-tecknat-avtal-skall-marknadsfora-biocept-pa-den-globala-biogasmarknaden.html

  • October 23, Increased efficiency of olive oil production in Spain (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB (AAP) has teamed up with one of the world’s largest and most modern plants for the production of olive oil. A pilot based on CEPT® platform will be set up in the production plant in southern Spain. The agreement is a result of the experiments conducted in the laboratory, site visits and discussions held for over a year. Our Spanish distributor, Tasnord SL, has played a crucial part in the discussions and will be involved in the installation and the process in general.

Arc Aroma Pure AB, Tasnord SL and the Spanish producer has signed an agreement to install a pilot plant in the producer’s state of the art manufacturing plant for olive oil, a plant which is also one of the largest in the world. The parties have agreed on the establishment and initial attempts at AAPS laboratory has been implemented.

CEPT® platform has the potential to increase the amount of oil that can be extracted from the olives, CEPT® technology adds no heat, why olive oil volatile flavors are preserved and the quality is very high. AAPS and our partners hope that the method will increase the quality of the oil in general, but also that the method will increase the output share of the, higher market valued, extra virgin olive oil . Furthermore, it is likely that the CEPT® based process has the potential to accelerate the rate of production and that the technology is more cost effective than current production technology. The project is particularly interesting since the current production plant has a very high reputation and is considered as one of the industrys´best, resulting in many visits from industry colleagues.

“This agreement is a natural step forward for Arc Aroma Pure. Now, we have mainly finished our product for the biogas market. Now, Arc Aroma Pure is proceeding according to plan and explores a whole new market segment, the extraction of olive oil. The CEPT® platform is the same, but the application and the market segment is brand new. If the pilot is successful, we have an important reference that will interest the rapidly growing olive oil industry and also a possible future customer, due to the fact that there are a number of production lines in the plant that can be upgraded. I would like to thank the representatives of Tasnord SL and employees for the focused work that enabled this agreement.” Says Pär Henriksson, President of Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/10/23/arcaroma-effektivisering-av-olivoljeproduktion-i-spanien.html

  • October 24, Arc Aroma Pure announces rights issue, approximately 17.3 MSEK (press release translated and edited by C.E.S.I.)

Arc Aroma Pure will make a rights issue of approximately SEK 17.3 million and has received subscription commitments and letters of intent of approximately SEK 10.6 million, representing approximately 61 percent of the issue amount. It appears from a statement. Arc Aroma Pure’s current working capital is sufficient for the current needs over the next twelve months, but a capital contribution makes it possible to further increase sales and marketing efforts and simultaneously explore new application areas and market segments. The subscription price is 25:50 per B share. Each share carries one warrant, and 11 warrants entitle the holder to subscribe for one new share.

https://www.avanza.se/placera/telegram/2014/10/24/arc-aroma-pure-foretradesemission-ca-173-mln-kr.html

Arc Aroma Pure AB (publ.) is very active in the market and in different projects. We have chosen to release this memo to live up to our promise to be transparent and to keep our shareholders informed.

bioCEPT® deployed in Jordberga

Company bioCEPT® is now installed and commissioned at the biogas plant in Jordberga outside Trelleborg. The preliminary results are very promising and as expected. Our bioCEPT® in Jordberga will be an important demonstration facility now when we begin to receive both Swedish and foreign delegations, who expressed their interest to see the CEPT® plant in operation. The biogas plant in Jordberga is the largest and most modern plant for the production of biogas in Sweden.

bioCEPT® registered trademark

Now, the Patent Office has announced that bioCEPT® is a registered trademark. The registration is an important step in the company’s market strategy.

Marketing activities

Arc Aroma Pure representatives have visited prospective customers and partners in different market segments and in several countries. This includes visits to China, Thailand, India, Spain and the United States. We note that the hospitality is always very positive and that interest is also very large.

Successful tests in the olive oil project

Recently, the company installed a CEPT® generator, treatment chamber included, in one of the world’s leading facilities for oil production in southern Spain. The plant is probably the largest in the world and receives many visitors. The aim was to try CEPT® platform during full-scale production and to study how the technology can streamline the olive oil production.

Both the management of the facility and isiting experts were initially skeptical, but after a few hours of operation, it was obvious to everyone that the technology works. Thus, we have verified that the effect demonstrated in the laboratory is scalable. Oil quality improved significantly and the amount of high-quality olive oil that can be extracted increases by more than 10% after a CEPT® treatment. We now have a good basis for further discussions with olive oil producers and actors in the industry, discussions operated jointly with our partners TasNord.

Cooperation with AZTI Tecnalia

Arc Aroma Pure AB, while visiting Bilbao, laid the foundation for a collaboration with AZTI Tecnalia, Spain’s leading research institutes in “marinating and food”, “in the context of Sustainable”. We will cooperate with the objective of developing equipment and methods based on CEPT® technology and to help prospective customers with evaluation and decision-making.

Media attention

Pär Henriksson has been interviewed by a journalist from Helsingborgs Dagblad and Sydsvenska Dagbladet common industry editorial, 8till5 and a photographer has visited our company. On January 24  a major six slide article was published, where Arc Aroma Pure AB was highlighted with text and images. The text began with the words “The Lund Company Arc Aroma Pure was the Skåne company which had by far the strongest price performance last year. Shares traded on AktieTorget rose by 311 percent. ”

“In this memo, my colleagues and I tried to summarize some of what is happening in the company. As everyone knows, we can not tell you everything, which would violate various rules and ethics. I can summarize that the tempo is high and that we work focused. We are in the middle of the process to move from research and development to marketing and production. A process if not entirely easy, but we are going. ” Says Pär Henriksson, MD, inventor and founder of Arc Aroma Pure.


C.E.S.I. predicts that also another new application, extraction of Juice, might be announced in a near future press release (see the AAP´s hint in the previous Aug 14 2014, press release)

Note: Most of the information depicted above was obtained from http://www.arcaromapure.se

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is an Arc Aroma Pure share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

The scientific key to the expected near future Nexam Chemical commercial success has not yet been highlighted by analysts. Tentatively, due to a lack of scientific understanding. C.E.S.I. hopes this chemical analysis of the Nexam linker central scaffold also will enlight “non-chemist”. But first, a few quotes and some financial aspects from the recent Nexam interim report (Q2, 2014):

http://www.nexamchemical.com/Documents/Interim%20Reports/Nexam_ENG_Q2_2014_20140821_OK.pdf

Nexam Chemical 

“Nexam Chemical develops technology and products that make it possible to significantly improve the properties and performance of most types of plastics in a cost-effective manner and with the same production technology intact. The properties that are improved include temperature resistance and service life. The property improvements that can be achieved by using Nexam Chemical’s technology make it possible to replace metals and other heavier and more expensive materials with plastics in a number of different applications. The company was founded in July 2009 after a management buy-out of a crosslinker project from the Perstorp Group. By then, Perstorp had put a number of years into the development of the project, but decided to divest its involvement in the field to instead focus on aldehyde-based chemistry. Nexam Chemical currently has fifteen employees in Sweden and eight in Scotland. The Company’s head office and R&D are in Lund, Sweden, but its production takes place in St. Andrews, Scotland”

Ongoing partnerships and customer projects

“Since Nexam Chemical’s technology was introduced in 2009, a number of development projects and partnerships have been entered into with a range of leading parties, of which several are world leaders in their respective niches. They include BASF, Repsol, IRPC, Sumitomo, ABB, NASA and Rolls-Royce. Nexam Chemical currently works with over 20 of the world’s 100 largest chemicals and materials companies.”

Vision and mission

Nexam Chemical’s vision is to be a recognised world leader in the field of property modification of plastic and polymer materials via heat-activated crosslinking.

The scientific key.

But before C.E.S.I. continues, let´s halt and highlight a few statements depicted in this article:

The author “BSV” quotes (slightly edited and translated by C.E.S.I.)

The article ends with a milestone quote fr Nexam CEO Per Morin quote from a Redeye (video) presentation.

“For us this is almost as Losec, we will be protected for 20 years and we can dictate who will get to do it and on what terms …”

  • C.E.S.I. does not believe that Nexam is developing a ground braking product, because…
  • C.E.S.I. is 100% convinced that Nexam is developing an array of ground breaking products.
  • C.E.S.I. also claims that the CEO´s quote “For us this is almost as Losec” is an understatement in respect to scientific quality.

Why? Here is why:

Losec, i. e. Omeprazole, is a selective and irreversible proton pump inhibitor. It suppresses stomach acid secretion by specific inhibition of the H +/K + ATPase system. Because this enzyme system is regarded as the acid (proton, or H+) pump within the gastric mucosa, omeprazole will inhibit the final step of acid production. http://en.wikipedia.org/wiki/Omeprazole.  However, the beauty is in the fine details of the chemistry! The drug Omeprazole is activated by stomach acid (by protonation of the pyridine moiety, which triggers the remaining desired cascade of events). Thus, Omeprazole should be defined as a target seeking missile.

Likewise, the beauty of the Nexam cross linker is also in the fine details of the chemistry! Cross linker molecule number 1 covalently binds both the polymer and the cross linker-polymer conjugates of the cross linker molecules number 2 and number 3. Thus, the Nexam cross linker molecules are double target seeking missiles! Thus, C.E.S.I. claims that the CEO statement “For us this is almost as Losec” is an understatement in respect to scientific quality. Both the description, the chemistry, the impact and the hidden simplicity is hard to grasp, especially for a non-chemist..

Therefore, the scientific key will also be explained in one single picture, which was also appreciated the small children of C.E.S.I. In fact, this synthetic scheme was C.E.S.I.s´ contribution to the family´s joint art weekend session…

PLEASE CLICK PICTURE TO ENLARGE

Nexam PNG

C.E.S.I. was only 99% confident that the combination of the Nexam polymers was a genius application of the historical 1866 Berthelot reaction. This key question had to be addressed, so C.E.S.I. submitted this question and this exact picture included…, to the Nexam CEO Per Morin and Daniel Röme, PhD and NEXAM Director of Business Development & Innovation. The content was much appreciated, confirmed and approved. Logically, Per and Daniel recommended C.E.S.I. to add another 4 words to the title: “A first and simplified crash course on Nexam Chemical Crosslinking perspective”.

Likewise, Per and Daniel also stressed that this simplification dedicated to non-chemists was appealing (Sept 25, 2014). They recommended C.E.S.I. not to edit the early draft picture “too much” (most likely, they also wished you, the reader of the manuscripts´ final version , a few moments of laughter.

However, C.E.S.I. came to the conclusion that a non-chemist still would not grasp the scientific beauty of the Nexam technology. This conclusion resulted in a few additional graphic views to illustrate the Nexam technology:

CLICK PICTURE TO ENLARGE!

 Benzene Diamond Graphene Introduction FINAL3

CLICK PICTURE TO ENLARGE!

Sunday FINAL Berthelot

CLICK PICTURE TO ENLARGE!

CYCLOTRIpng240SUN final

Key scientific messages in these graphic slides:

  • Nexam´s cross linker design is a genius application of the “forgotten” Berthelot reaction
  • The Berthelot reaction – as such – has been ignored (and been forgotten about!) by scientific communities, presumably due to the inherent issues in other non cross-linker applications (i. e. “normal” synthetic chemistry).
  • The core of the Nexam cross linker technology end-products is a Benzene derivative. Benzene derivatives are very stable. This derivative should be a perfect central hub (=knot) in most multidimensional polymer frameworks! Nexam technology is not solely genius – It is unique!

Nexam competitors?

C.E.S.I fails to find Nexam competitors. Most likely, there is competition in this specific cross linker technology, but C.E.S.I. can not find any relevant “Nexam threats”. The most interesting finding is this article:

http://www.ptonline.com/articles/radiation-crosslinking-boosts-nylon-properties

“TechnoCompound offers nylon 6 compounds that can be crosslinked with standard electron-beam technology, including conveyor batch processing, in-line wire/cable processing, and film/sheet processing. Companies can utilize existing electron-beam processing equipment to replace higher-cost thermoplastics with high-performing and more economical crosslinkable nylon (see Table 1). TechnoCompound’s compounds have been targeted for electrical connectors, with a strong focus on automotive applications where higher temperature performance is required.”

And the article summarizes:

“OTHER ACTIVITIES IN CROSSLINKED NYLON

Most of the development activity and commercial use of crosslinked nylons has taken place in Europe and Asia. Sumitomo Chemicals was among the first companies that pursued crosslinked nylons. By 2005, the company had developed new radiation-crosslinking nylon 66 molding compounds, which were adapted commercially for heat-resistant electrical connectors.

In late 2011, BASF (U.S. office in Florham Park, N.J.) and Sweden’s Nexam Chemical, a supplier of heat-activated crosslinkers for polymers, forged an exclusive cooperation agreement to develop and commercialize crosslinkable nylon 66 for automotive and electrical/electronic applications as initial targets.

Foster Corp., Dayville, Conn., developed its Fostalink crosslinkable elastomeric nylon compounds for medical applications such as catheters and valving, and nonmedical applications such as heat-shrink valving.”

C.E.S.I. : Examples of TechnoCompound´s crosslinker technology and specific cross linkers:

“Nylons 6, 66, and 11 can be radiation crosslinked, but the first two require addition of a crosslinking agent. For example, the polyfunctional monomer triallyl isocyanurate or triallyl-cyanurate can be compounded into nylon pellets. The crosslinkable pellets can then be molded, extruded, or otherwise formed into the final product”

A google triallyl isocyanate price search, makes C.E.S.I. feel like the scientist Mr Walt in the cutting edge quality TV series “Breaking Bad”:

http://www.alibaba.com/showroom/triallyl-cyanurate.html

Despite the low cost of “triallyl isocyanate” (1-2 US$ / Kilogram), this cross linker is based on “electron beam technology”, which to C.E.S.I seems inferior to standard heat activation of cross linkers (Nexam-BASF. Nexam-Armacell, Nexam-X, Nexam-Y etc. etc.)

http://en.wikipedia.org/wiki/Electron_beam_processing

Very interestingly, the Nexam CEO Per Morin touch upon this subject in an Introduce.se Nexam Video interview (June 10th, 2014). His conclusions are in accordance with the C.E.S.I. conclusions: “Electron Beem technology has been around for 50 years, it´s simply too expensive”

http://www.introduce.se/foretag/nexam/intervjuer/2014/6/nexam—intervju-med-vd-per-palmqvist-morin-och-forskningschef-dane-momcilovic/

And the competition from the giants within Process Polymer industry? Well, it seems that theese “key industry leaders” are aligning themseves to the core Nexam technology…

Nexam – Scalability issues?

Daniel Röme, PhD and NEXAM Director of Business Development & Innovation and Per Morin Nexam CEO:

Translated and slightly edited by C.E.S.I (!):

“I judge the risk of being unable to scale up production as relatively small,” says Daniel Rome. Instead, he assesses the risk of postponed projects as higher. This has happened before for Nexam. When plastic manufacturers are in reorganizations or depressed market conditions, they prioritize ongoing projects and existing customers in front of the development projects in where Nexam are involved. Nexam believes it can provide more information about pet foam-scaling during September or at the next quarterly report, and CEO Per Morin estimates that Nexam could ultimately turnaround around 50 million a year on the pet foam project with this specific client. Generally, Nexam Chemical aims towards gross margins around 40-50 per cent, he says, but declines due to many uncertain parameters to provide any more long-term sales forecast. According to the Nexam CEO, Per Morin: Today, we can not see a need for a rights issue to scale up production with connected associated working capital requirements, “No, instead we’ll solve the working capital requirements by negotiating with our customers and suppliers”

Original swedish version in link below (please use google translate):

http://www.privataaffarer.se/direkt-nv/nexam-upprepar-prognos-om-breakeven-2h-2014-vd-545809
C.E.S.I. conclusion: Nexam is Nexam´s worst enemy, or?

The molecules, i. e. the products, in the Nexam pipeline are extremely easy to synthesise for most chemists ( a person skilled in the art of constructing new molecules). One might argue that Nexam can produce the linkers in the most cost efficient way and this might be true today, but potentially not in the future or even near future. C.E.S.I. predicts that it would take an experienced Synthetic Chemist (e. g. C.E.S.I.) approximately 5-15 days to synthesize (= to construct) one or a few grams of cross linker material. C.E.S.I. has + 13 years of experience in small scale small molecule synthesis. C.E.S.I. can not understand that a high quality process company with a vibrant creative environment should, per default, fail to copy the Nexam cross-linkers with roughly the same production cost (or even at lower production). Therefore, securing the intellectual Property (IP) must at all times be on top of Nexam´s highest priority agenda. From the massive IP press release news flow from Nexam, C.E.S.I. concludes that the Nexam CEO and the Nexam board has understood this key issue. Thus, C.E.S.I. is thrilled of excitement. Now, it seems that analysts and the market “demand” a big order from a key industry process company. Today, C.E.S.I. does not share the analyst’s and the market´s demand. C.E.S.I. would like to see even a few more “new patent press releases” prior to the announcement of the first big order. However, the recent small order announcement is a key milestone (see below). This order is a another “proof of concept” i. e. it is a solid proof that the nexam technology is not solely of academic interest… C.E.S.I. predicts that Nexam will be a key player in the next industry revolution (New superior bulk- and advanced materials).

http://www.nexamchemical.com/en/Investors/Press-releases/Pressmeddelande/?releaseid=1701030

http://www.nexamchemical.com/en/Investors/

The world of plastics and polymers is wide and complex. There are tons of materials out there and only some of them can and have been optimized for use in 3D printing. So, if you were a company that produced some of the most advanced polymeric mixes out there, what would you do? You would probably do what Sweden based Nexam Chemicals just did for its PEPA Crosslinker: develop a process for using it for 3D printing with thermoplastics.

Nexam is known for developing technology and products that improve the properties of polymeric materials using conventional processing equipment (i.e. extruders). Its technology is used for cross linking polymers (which in principle can consist of an unlimited number of monomers) and oligomers (which consist of only a few monomers) to create new cross linked polymers with superior properties.

Controlled crosslinking can give the original polyamide enhanced properties in terms of chemical resistance and thermal/dimensional stability, make it stronger during use and make it more recyclable. It can also improve throughput and enable new processes.

According to the latest Chinese patent filed in China by the Institute of Chemistry at the Chinese Academy of Sciences, that is what the Crosslinker PEPA material (aka Neximid 100) will do, by enabling new methods and new capabilities for 3D printing of polyamide thermoplastics, giving nylon properties that in certain circumstances may allow it to be used to replace metal components.

http://3dprintingindustry.com/2014/09/26/nexam-chemical-gets-3d-printing-crosslinker-pepa/

And the current Nexam portfolio? There is still room for improvements.

CLICK PICTURE TO ENLARGE!

Nexam produktportfölj by CESI

Nexam – Better plastics, Final conclusions by C.E.S.I.

  • Increased processability equalls…
  • New polymers in new processes in new products
  • Increased thermo stability (heat stability)
  • Increased chemical stability
  • Increased mechanical stability
  • Increased UV
  • Increased “total plastic properties” to a reduced price
  • Nexam´s customers can direct use the Nexam products, without associated major hardware refurbishment costs
  • Last 6 months: The Nexam technology has been introduced for new world leading companies.
  • Increased level of activity in the company
  • Solely, the Armacell and BASF project can respectively result in a turnaround of 10 mSEK year 1 and 50 mSEK year 2 – with a net marin of 40% (!)
  • Nexam predicts that news regarding more new applications soon will be announced (electronics, Asian energy sector, european plastic recycling projects),
  • In the future: Nexam predicts additional new nylon applications
  • In the future: Nexam predicts ”some concepts involving polyolefins”
  • A new product is under evaluation in china

The Nexam case is – without competition – C.E.S.I.s´ all time favorite company and investment call!

A prediction of the near future share price is slightly silly and surprisingly difficult.

A prediction of the 2019 year share price is also slightly silly, and also impossible.

C.E.S.I. is biassed and extremely positive.

Why?

Nexam End 1

…and…

End 3

C.E.S.I. has granted the approval to share these official Nexam slides (Per Morin). Original material is available at http://www.nexamchemicals.com (presentation section)

Interim Financial Statements for Quarter 3, July–September 2014

Entering into a new phase with high speed

Several new projects have been initiated during the quarter, mainly with European customers, and Nexam Chemical has delivered products to several of them. Our partnership with Armacell is progressing, albeit with some delays. We are also poised to begin a project funded by Eurostar that we will be working on together with Armacell and The European Van Company. The aim of the project is to upgrade recycled PET for use in PET foam and other applications. We were informed in the summer that this project will receive funding from Eurostar. In addition, many other entities in Europe are testing Nexam Chemical’s formulations mainly for upgrading recycled PET resin for various applications. Nexam Chemical entered into a cooperation agreement with its polyethylene partner IRPC over the summer for development and commercialization of modified polyolefins. IRPC has informed us that they now have passed the development phase, with respect to a polyethylene quality for pipes, and will begin testing the quality for approval together with their end client in the autumn/winter. This will be an interesting and potentially large application area for our company. Nexam Chemical held a technical launch of its new high-temperature resin, NEXIMID® MHT-R, in the beginning of October and we have already received several inquiries from around the world. In addition to the project with Rolls Royce and Swerea SiComp, we are expecting several companies to initiate projects with the new resin in the coming years. The in-depth section of this report features a fairly new area for Nexam Chemical: liquid crystalline polymers, or LCP plastics as they are often referred to. This material is rapidly gaining ground, especially in the electronics industry, where Nexam Chemical has already established itself as a supplier of products for property improvement.

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a Nexam Chemical share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advice. 

 

This post is the result of a joint collaboration by C.E.S.I., Se7en (blogger at http://www.avanza.se) and Martini (blogger at http://www.redeye.se). The original author Martini has published a very similar article on http://www.redeye.se (swedish language). The original author Martini has also granted the following permissions: English translation of original manuscript (performed by Se7en), Editing and Publication at http://www.cuttingedgescienceinvest.com (performed by C.E.S.I). Further information can be provided by cuttingedgescienceinvest@outlook.com

Initial Teasers

Recently Huawei Ascend Mate 7 was presented at the IFA in Berlin and these two quotes summarize just about everything:

The fingerprint scanner is the star of the show here, working wonderfully well” – Techradar.com

“I love it, I really love this functionality!” – Richard Yu – CEO, Huawei

https://www.youtube.com/watch?v=cnbEYPCs1Lw (Start watching at 45 min to check out the FPC One Touch feature in Mate 7)

Background – Why is Fingerprint Cards a promising company and a good investment?

It’s all about supply and demand. It’s as natural as the earth’s most populated country, China with 1.35 billion people. In Sweden 9.45 million people are living, which compared to China accounts for only 0.7% of potential smartphone market measured by number of inhabitants.

The Chinese market of about 1 billion mobile subscriptions is hard to grasp, and it is now three times as large as that in the United States. Just a year ago, the Chinese and American smartphone market were equal. FPC has been active in the Chinese banking sector for 17 years. Now, FPC has established itself in the massively expanding smartphone market in China.

China Mobile with over 700 million mobile subscriptions builds out its 4G network, also known as TD-LTE, with over 500,000 base stations in over 340 cities. The goal is to finalize its new infrastructure during the current year. Smartphone sales have exceeded expectations in the 16 cities that have 4G services, such as Beijing and Shanghai. 41% of China Mobile’s customers are now switching out their old cell phone to a smartphone, and of those, 79% android.

On March 13th the News Agency Finwire summaries this expansion as “The number of active smartphones and tablets close to doubled in China over 2013 total was more than 700 million devices active at the end of 2013, up from 380 million in the first quarter of that year. It appears from a new report from Umeng.”

Introduction of Huawei Mate 7 amazes the world

After the introduction of the very first Android smartphone featuring a fingerprint touch sensor on IFA in Berlin 2014, the tech blogs literally exploded with positive comments, see below for a handful of quotes:

“The fingerprint scanner is the star of the show here, working wonderfully well”

“It works EVERY SINGLE TIME”

“Reliable and screen turns on quickly”

“It’s a legitimately impressive sensor”

“Its really cool technology”

“The fingerprint scanner on the back of the Mate 7 is nothing short of perfect.”

http://www.techradar.com/reviews/phones/mobile-phones/huawei-ascend-mate-7-1263333/review/3#articleContent

http://technewsireland.com/2014/09/06/huawei-smartens-up-with the-mate-7-at-ifa/

The fingerprint reader, developed in cooperation with Swedish FPC, works very fast and good and in addition, Huawei has associated a lot of interesting features to it. You can unlock your phone instantly by putting your finger on the fingerprint reader and need not first pressing another button on the phone. Additionally, you can register impressions from more than one finger, and linking them to your user account on your phone. Different fingerprints can then be used to lock and unlock certain features depending on which finger you use. A perfect feature if you for instance lend your phone to someone you do not want to be able to snoop through your private messages or images.

http://www.mobil.se/nyheter/f-inner-impression-huawei-ascend-mate-7#.VAwUV_l_uSp

150,000 employees – the world’s third largest smartphone manufacturer

Huawei: “Consumer Business: Serving more than 500 operators around the world, Huawei’s Consumer Business offers a suite of user-friendly mobile phones, mobile broadband devices and home devices. It aims to become one of the leading global mobile phone brands by 2015. The business group recorded a sales revenue of $9.4 bn in 2013, which represents an impressive year-on-year growth.”

http://www.huawei.eu/our-company

Huawei’s strategy is to reduce the number of smartphones to 5 models from the previous 20 models. They have also embraced the FPC way to add a plus for the expected forecast sales. In this case, they estimated the number of smartphones sold in 2014 at 80 million plus. They also anticipate increased market share of around 7% per year. Today they have 7% of the global market, i.e. they are aiming to sell 100% more smartphones in 2015! The goal is to own 25% of the market within 2-3 years.

Global Market Outlook

FPC published the below market outlook in March for smartphones and tablets over the next coming years. In this forecast, FPC has not included smart cards, debit cards, and other product of the total available market.

TAM – Total Addressable Market

$ 1.4 billion in 2014 = about 9 billion SEK

$ 2.8 billion in 2015 = about 18 billion SEK

$ 4.8 billion in 2016 = approx 31 billion SEK

1 USD = 6.35 SEK (current rate is 7.09 SEK)

http://www.fingerprints.com/corporate/wp-content/uploads/sites/2/2013/09/PJF-fireside-speech-11-March-2014.pdf

Average price per sensor is 4 USD: swipe sensor 1.5-3 USD/pc, touch sensor 5-7 USD/pc.

FPC aims to supply 60% of the touch sensor market in 2014. In 2015, the goal is 50% of the touch sensor market. FPC’s swipe sensor dominated the market with 95.4% of all smartphones launched in 2013. It is also expected to achieve an EBITDA of about 20% for 2014. If FPC meet their forecasts, the stock is very cheap at the moment. How does it look if we for example reduce its market share to 30%? See the calculation examples below:

2014: 9 billion x 30% market share x earnings, EBITDA 20% / 55 million. PE shares x 25 = 245 SEK / share

2015: 18 billion x 30% market share x earnings, EBITDA 30% / 60 million. PE shares x 20 = 540 SEK / share

2016: 31 billion x 30% market share x earnings, EBITDA 30% / 65 million. PE shares x 20 = 858 SEK / share

Worth noting is that the FPC has a negative PE’s as of today at -39.9, and the market has been waiting for patent examinations through FIDO alliance, which may lead to a delay of the above calculation forecast.

However, this very promising quote was delivered from the CEO at the FPC’s Annual General Meeting in Gothenburg:

“Those big customers we handle ourselves… The tens of millions of sensors will be delivered this year, and next year up to several hundred million sensors. ”

Collaborations

“Every member of the FIDO alliance must have agreed on the patents. Everybody is reviewing the specifications, to be sure, and believe me, I’m sure there are a lot of patent lawers that are looking at this. There is a review before it is published. We are very hopeful because there are no surprises, everyone has been involved in this work, so once that review period is over, then we expect that the first version of the specifications will be released. Version One specification will be introduced during the first two months in 2014.”

https://www.bullstreet.se/2014/01/varldens-giganter-lanserar-en-gemensam-plattform-e-handel-borjan-av-2014/

Alibaba = Huawei Ascend Mate 7 = Fingerprint Cards

“Alibaba, founded by billionaire and one-time Forbes cover story subject Jack Ma teamed up with Chinese telecoms outfit Huawei to integrate this new biometric technology into its Alipay Wallet app.

It’ll be available for use with Huawei’s Mate 7 smartphone, due to be launched this week.”

http://www.forbes.com/sites/clareoconnor/2014/09/02/alibabas-latest-e-commerce-coup-secure-mobile-payment-by-fingerprint/

Outlook

Apple e-commerce

Apple has focused on reducing the fees associated with credit card payments. Apple has an agreement with VISA, MasterCard and American Express. On September 9 2014, Apple launched its new flagship, of course fitted their new payment system.

“The first thing Apple has done is convince these four FIS to Consider transactions from Apple’s upcoming payments venture – said to launch with its forthcoming iPhone 6 introduction – as “card present” transactions, which carry a lower discount rate than “card-Not-present” transactions, because of lower fraud risk.”

http://bankinnovation.net/2014/09/apple-said-to-negotiate-deep-payments-discounts-from-big-banks/

Statement from the CEO of FPC after the launch of Huawei Mate 7

“Huawei, the world’s third-largest smartphone manufacturer, today launched its new flagship model Huawei Mate 7 with an integrated touch sensor from Fingerprint Cards. It is seen as an important breakthrough for Fingerprint Cards” and the company’s CEO continues and says that “interest from the other major manufacturers now will increase significantly.”

Huawei becomes the first Android manufacturer to launch a smartphone with touch sensor. Among the giants, Samsung has previously chosen line sensors from Synaptics, Fingerprint Cards american competitor.

http://finwire.se/component/news/FWM0002569/huaweis-lansering-okar-intresset-exponentiellt-for-fingerprint-cards-sensorer—vd

The market offers the same undeniable information – pin codes will be replaced with your fingerprint. The technical and the legal platforms are ready thanks to FIDO Alliance (Fixed Identity Online). Apple, Samsung and Huawei have now shown that fingerprint sensors are a standard component to be reckoned with in all smartphones.

C.E.S.I. summary

Today´s excellent share price discount is due the latest media news i. e. the CEO´s suspected illegal insider trading. According to C.E.S.I., these suspects should have only minor influence of the company´s fundamenta in a medium and long term perspective.

http://www.globalpost.com/dispatch/news/thomson-reuters/140911/fingerprint-cards-ceo-denies-insider-trading-chairman

C.E.S.I. believes in the following Warren Buffet quote:

“We don’t do due diligence or go out kicking tires. It doesn’t matter. What matters is understanding the competitive dynamics of a business. We can’t be taken by a guy with a sales pitch… What really counts is the presence of a competitive advantage. You want a business with a big castle and a moat around it, and you want that moat to widen over time. Coke and Kodak both had marvelous moats 20 or 25 years ago. Kodak’s has narrowed, while Coke has been building its moat. We want an economic castle. The best thing that happens to us is when a great company gets into temporary trouble… We want to buy them when they’re on the operating table.”

http://www.businessinsider.com/warren-buffetts-investing-quotes-2014-8?op=1#ixzz3Dqd6hD5F

Best regards C.E.S.I., Se7en and Martini

The author, Cutting Edge Science Invest, is a Fingerprint Cards share holder. The author does not intend to sell any shares within a near future (= weeks)

Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advice. 

Surprisingly, the author of www.wian.se (an anonymous retired policeman), easily convinced C.E.S.I. to buy SinterCast shares today. 

C.E.S.I. stumbled across this site in a high quality Redeye blogg post submitted by the alias “Bengtsson” (swedish language, links in english)… http://www.redeye.se/aktiebloggen/sintercast/sintercast-koprek-av-bjorn-davegardh-ecomotors-klart

And in a second Redeye article by “Bengtsson”, I read (translated by C.E.S.I):

“One of the world’s greatest entrepreneur, Bill Gates, is the largest investor in the legendary engine technology project http://www.EcoMotors.com which apparently will revolutionize the motor industry. Or how about a spirited five-seater family car with 0.23 L per mil in consumption, resulting in lower CO2 load than electric car. Industry insider John Mortimer’s report just recently leads to the conclusion that the engines are made in CGI. This is dynamite for Swedish SinterCast. The starting gun fires this autumn.”

http://www.redeye.se/analys/userreport/bill-gates-rena-dynamiten-sintercast  (swedish, links in english)

http://www.redeye.se/aktiebloggen/sintercast/svenskt-foretag-bakom-bill-gates-game-changer (swedish, links in english)

Consensus: Eco motors may be the end customer for the Sintercast press release January 16, 2014.

https://finance.yahoo.com/news/sintercast-secures-process-control-contract-080300244.html

Zhongding Power is granted the Eco motors licence.

( http://www.sme.org/MEMagazine/Article.aspx?id=80394&taxid=1429 )

“Bengtsson” also highlights that SinterCast also recently has been highlighted by Björn Davegårdh, an experienced swedish analyst (September 1, 2014).

“CGI is used mainly in the engine block and has superior properties, and weighs less than other materials. Contrary to what many believe goes Sintercast now a profit even if it is modest. Now scaled up production and is located on an annual rate of 1.8 million Engine Equivalents (equivalent passenger car engines) per year. It will gradually increase to 2.4 million Engine. It also includes Ford’s new gasoline engine. It happens a lot in Sintercast with new installations and collaborations in China. 2019 counts Sintercast with a volume of 4.7 million equivalent to about 125 million in revenue. This places the results at around 90 million SEK. Added to this is completely new engine that we currently do not know much about. In addition, more and more components, in addition to the engine block, that is produced in CGI. Moreover, if the so-called OPOC engine becomes a success, it can be really fun.”

https://allra.se/marknadsnytt/kronikor/storfoeretagen-vaerderas-efter-foertjaenst (swedish language)

Ok, let´s finally replace the hype, hypotheses and estimates with some plain facts:

SinterCast, General information (www.SinterCast.com): SinterCast is the world leading supplier of on-line process control technology and know-how for the reliable high-volume production of Compacted Graphite Iron (CGI).  Together with strategic partnerships for component design, rapid prototyping and high volume machining, we bring foundry experience and CGI materials expertise to every aspect of every CGI program.  SinterCast provides CGI solutions to the world foundry and automotive industries. SinterCast is a publicly listed company on the NASDAQ OMX Stockholm stock exchange.

Video link below (Aug, 2014): SinterCast’s CEO Steve Dawson gives an update on the current state of the business, comments on the progress of the installations that were announced earlier this year and toward the end of 2013. He also describes the status of the installation that was delivered to Mexico, why the previous total market opportunity estimate isn’t included in the Q2 report and lastly what the background is for the increase in the deferred tax asset during the quarter.

https://www.youtube.com/watch?v=i_u9l8VE91Y

Compacted Graphite Iron (CGI) provides at least 75% higher tensile, 40% higher stiffness and approximately double the fatigue strength of conventional grey cast iron or aluminium alloys.  The fatigue strength of CGI is up to five times higher than that of aluminium at elevated temperatures.  In comparison to ductile iron, CGI provides superior castability, thermal conductivity and machinability.  These combined properties of CGI offer cost-effective solutions for complex components that are subjected to mechanical and/or thermal loading.

Business Model. SinterCast sells or leases the System 3000 hardware, software, leases, sells supplies for sampling and charge a production fee for each tonne of castings produced using the SinterCast technology. Revenue is also derived from spare parts, service, field trials and sales of test pieces. The total running fees (sampling consumables plus Production Fee) depend on the ladle size and the casting yield for each foundry and each product. A typical cylinder block produces a revenue of around EUR 40-50 per tonne of castings, corresponding to 2.00 to 2.50 Euro for each 50 kg Engine. SinterCast business model is highly scalable, allowing profitability to rise as the installed base grows and as more products enter series production.

www.introduce.se (swedish language)

Compared to previous years, the net turnaround has increased:

http://www.introduce.se/foretag/sintercast/nyckeltal/

Technical analysis “Best Fit Change Line”. The following chart estimates an ordinary least squares regression model for SINTERCAST applied against its price change over selected period. The best fit line has a slop of + 0.59 which means SINTERCAST will continue generating value for investors. It has 44 observation points and a regression sum of squares at 611.9, which is the sum of squared deviations for the predicted SINTERCAST price change compared to its average price change.

http://www.macroaxis.com/invest/market/SINT.ST–technical–SINTERCAST

Current Sintercast status http://www.sintercast.com/corporate/history

  • 23 fully automated process control systems and 16 mini-systems installed in 12 countries and supported in 10 languages
  • More than 55 components in series production
  • Approximately 2 million castings produced and 118,500 Sampling Cups shipped in 2013
  • Series production for passenger vehicle, commercial vehicle and industrial power applications.

C.E.S.I. is thrilled to be a new SinterCast share holder.

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a SinterCast share holder. The author does not intend to sell any shares within a near future (= weeks)

Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices. 

CybAero AB develops, manufactures and markets autonomous unmanned helicopters (VTOL UAVs) with associated sensor systems for use in both civil and military applications. CybAero was founded in 2003, but the foundations of its business were laid in 1992 through a research collaboration between Linköping University and the Swedish Defense Research Agency (FOI). With APID trademark, CybAero is now established as a global VTOL UAV leader. The Company’s APID product attracts much attention globally for being user-friendly, robust and price-efficient. CybAero’s head office is in the Mjärdevi Science Park in Linköping, Sweden. The company has just over 40 employees and is listed on the NASDAQ OMX First North.

Please press link below for the in-depth clip from Chinese tv channel CCTV7 (featuring the swedish UAV developer and manufacturer CybAero).

Very recently, this clip was also published on youtube (Sep 7, 2014)!

http://www.youtube.com/watch?v=CmqtS7jNF1M&feature=youtu.be

Attached is also the link to CybAero’s video from the September 8 press release, the demo flights  on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The demo flights were performed in July and August in China and presented the aircraft’s ability to inspect power lines and track moving objects.

http://youtu.be/CmqtS7jNF1M

Note: Cybaero Market cap ~500 million SEK

Some investors might argue the Cybareo market cap is high:

The company reported a loss after tax of SEK 10.5 million (SEK 25.4 million, full-year 2013). The loss can be explained by the fact that CybAero continues to be in an intensive development phase to transition the company into an industrial powerhouse with the ability to handle large-scale development and production operations. In addition to one-time costs, recurring personnel costs have increased as a result of new recruitment, mainly in the development, aviation, and production departments. http://www.cybaero.se/en/2-uncategorised/112-semi-annual-report-january-june-2014-cybaero-ab-publ

Cutting Edge Science Invest believes it is low. Why?

This Chinese AVIC order is the first big order and most likely, it´s not the last. In addition, earnings from this order will be obtained over a 7-8 years period (starting 2015).

Examples of commercial, defence and civil authoritie drone applications:

  • Border and coastal monitoring
  • Traffic monitoring
  • Mapping of forest fires
  • Mapping of landfill sites
  • Search and rescue operations
  • Border patrols
  • Mine detection
  • Jamming
  • Reconnaissance
  • Protection of convoys and consignments
  • Perimeter protection for military bases
  • Mapping
  • Power line inspections
  • Monitoring of forest areas
  • Inspection of landfill sites and gravel pits
  • Topographical surveys
  • TV and film recordings
  • Transport

A comment on the transport application: Compare the google Project Wing drone project (link to video clip): http://www.telegraph.co.uk/technology/google/11062925/Google-tests-drone-delivery-service-in-Australian-outback.html)

CybAero is at the leading edge of developments to create an unmanned futurehttp://www.cybaero.se/en/

CybAero develops and manufactures unmanned helicopters known as UAVs (Unmanned Aerial Vehicles) for an international market. The helicopters are adapted to the unique requirements of each individual client, and cost effectively and safely reduce the risks to people in hazardous environments.Over the past decade, UAVs have seen the most dynamic growth of any sector in the aviation industry, and this strong growth is forecast to continue until 2020. Most UAVs are currently fixed-wing UAVs, over which unmanned helicopters have many advantages. For example, they don’t need long runways, which most ships don’t have, and they can capture images better when hovering sice they operate at lower altitudes. The APID 60 is an innovative product developed by CybAero’s world-class aircraft engineers and has been tried and tested by our clients in hostile environments the world over.

Attached is the full version of Cybaeros “all time best” key press release:

Swedish CybAero lands order for unmanned helicopters worth SEK 700-800 million to China

First North-listed CybAero, which develops and sells unmanned helicopters, has received an order guarantee worth SEK 700-800 million through an eight-year framework agreement. The order has been placed by a company in the Chinese AVIC group, one of the world’s largest companies which develops and manufactures aircraft and various types of flying vehicles and has over 400,000 employees. The order is dependent on an export permit being issued by the Swedish Agency for Non-Proliferation and Export Controls (ISP).

The order is linked to a framework agreement, through which AVIC has committed to purchasing at least 20 helicopter systems during the first three years and at least a further 50 systems during the following five years. This gives a total order value of SEK 700-800 million, depending on the final design of the systems. Each system includes helicopters, ground stations and data links. The agreement also covers training and support.

“This represents a breakthrough in the market for the civil application of unmanned helicopters. Our goal is to become the global market leader with at least 30 percent of the global market. Through this order, which is our biggest to date, we’ve taken a significant step towards achieving this goal,” says Mikael Hult, CybAero’s CEO.

To be used by customs, coastguard services and agriculture
CybAero will establish a joint company with AVIC in order to gain access to its volumes and production expertise. In the long-term, the company may carry out some production locally in China for the Asiatic market. CybAero expects to achieve economies of scale through the joint company, which among other things will result in the further streamlining of operations and the potential to operate closer to the local Asiatic market.

Through the joint company, AVIC will entirely target the civil and commercial markets, e.g. customs and coastguard services, the energy sector, agriculture, mapping and rescue services, etc.

“The order is the largest ever anywhere in the world in the product segment within which CybAero operates, i.e. vertical take-off and landing unmanned aerial vehicles weighing less than 200kg. This order will be worth nearly SEK 100 million a year if we can turn out the orders over the eight years covered by the agreement. This will provide a stable basis for our entire business for many years to come,”

Cutting Edge Science Invest (C.E.S.I.):  Not surprisingly, the share price exploded instantly after this press release (~51%, 31 to 47 SEK), quickly followed by a sharp decline (38 SEK). Since, the share price has dropped approximately 1.5 SEK per month in a very calm and steady weak negative trend. Today and prior to today´s closing call forechock, the share price was fluctuating between 32 SEK and 34 SEK,. Will there be another forechock tomorrow? I do not know. What I do know is that most likely, the press release announcing a granted export permit will cause an Earth quake. I predict a net 75 % increase of the share value within a few minutes.

C.E.S.I. is confident that the permit will be granted. Why? C.E.S.I. strongly believe this CEO´s statement:

“A condition of the order for AVIC is the granting of a permit by the Swedish Agency for Non-Proliferation and Export Controls, but we don’t anticipate there being any problem with this at present. We received an order from the Chinese customs authorities in January worth SEK 50 million, and we have been granted an export permit for this order, which is more complex and technologically advanced. The equipment for which we have now received an order is part of our standard system,” says CEO Mikael Hult.

“The agreement and order will not give rise to any further financing requirements for CybAero. Payments will be made by AVIC on an ongoing basis as deliveries take place.” CEO Mikael Hult

During summer, the company has upgraded the engine of its Apid 60 aircraft

http://www.cybaero.se/en/2-uncategorised/106-cybaero-announces-new-engine-supplier

The high quality provided by CybAero is verified by the recent airbus follow-on order

First North-listed CybAero has received another order for a sub-system from Airbus (formerly known as Cassidian, a subsidiary of EADS/Airbus). The order, worth EUR 150,000, represents a follow-on order to the orders that CybAero received in May and October 2013. The sub-system will be used in Airbus’ flying demonstrator, the TANAN 300 unmanned helicopter.

C.E.S.I. is also found of the demo flights press release:

http://www.cybaero.se/en/2-uncategorised/114-cybaero-has-performed-demo-flights

First North-listed CybAero, which develops and markets unmanned helicopters, has performed demo flights on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The demo flights were performed in July and August in China and presented the aircraft’s ability to inspect power lines and track moving objects.

“This is a milestone for us in the work we’ve put into the AVIC order, and yet another step in our growth and expansion,” says Mikael Hult, CEO of CybAero. The now-complete demo flights were performed at various times in July and August at two different locations outside Beijing. AVIC, one of the largest companies in the world and whose operations include developing and producing aircraft, invited numerous high-ranking individuals from government authorities, as well as from the energy sector and business community. CybAero had a demo team on-site, as well as representatives from its management and board of directors. The demo flights demonstrated features including the ability to inspect power lines and track moving objects. Video info was shown in real time from the aircraft’s camera and the system’s ground station was displayed on large monitors.

“The weather conditions were challenging, with 35-degree Celsius heat and strong winds. But the helicopter functioned just as it was supposed to, so we were able to show that it could fly in tough conditions,” says Mikael Hult. Hult is extremely pleased with these demo flights, which highlighted the aircraft’s functionality and maneuvering capabilities. “Being on-site allowed us to discuss our customer’s requirements in greater detail and AVIC has initiated talks and negotiations with potential customers,” says Mikael Hult.

Major attention from China
In early July, CybAero won a large framework agreement with AVIC, which has committed to purchase at least 20 helicopter systems in the first three years, followed by at least 50 systems in the next five years. This translates to an order value of SEK 700-800 million, depending on the final design of the systems. Work on the order has begun. CybAero received an end user certificate from AVIC on September 5 and has initiated the application process for an export license from ISP (the Swedish Agency for Non-Proliferation and Export Controls). AVIC plans to focus on the civilian and commercial markets, such as agriculture, coast guards, the energy sector, mining industry, forest products industry and fire & rescue services. News of the order made a huge splash both in Sweden and abroad, with national Chinese TV channel CCTV7 doing a 3-minute feature on CybAeros product APID 60 in late July (C.E.S.I. : see links above)

In the fall, CybAero will continue performing demo flights around the world. “Intensifying our on-location demo flights for our customers and showing them how our systems function in the environments in which they will later be operating is a crucial step for us,” says Mikael Hult.

In a very near future, Cutting Edge Science invest believes CybAero and Mikael Hult will exceed current market expectations.

More info (general):

http://blogs.imediaconnection.com/blog/2014/08/30/up-up-and-away-commercial-drone-market-ready-for-take-off/

http://www.greentechmedia.com/articles/read/flying-robots-for-the-smart-grid

http://marketingland.com/amazon-drone-delivery-ready-for-takeoff-but-are-we-ready-66869

http://voiceofsandiego.org/2014/05/06/the-drone-industrys-ready-to-take-off-required-reading/

 Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a CybAero share holder. The author does not intend to sell any shares within a near future (= weeks)

Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices. 

 

 

 

Jan 20 update: Currently, C.E.S.I. does not own any Medivir shares (the author will likely stay out for a few more months)

Johnson & Johnson / Janssen accounts for the global sales of the Swedish pharmaceutical company Medivir. Their crown jewel is a HCV drug entitled Olysio. Simeprevir is the active pharmaceutical ingredient. My prediction is that this milestone in Swedish drug discovery will not end within a few days, weeks or months, as the market already seems to estimate! Due to the continued strong global market uptake for Olysio/Simeprevir, I am convinced that we still are turning pages of the first chapter of this story!

Most recent Medivir presentation: http://www.medivir.se/v5/images/pdf/2014/Carnegie-Small-Cap-Day-3-September-2014.pdf

Interim Report, January – June 2014:

http://www.medivir.se/v5/en/uptodate/pressrelease.cfm

  • Net turnover totalled SEK 772.2 million (SEK 218.8 m), of which SEK 662.4 million was contributed by royalties for simeprevir. Revenues from Medivir’s own pharmaceutical sales totalled SEK 109.2 million, SEK 21.7 million of which derived from sales of Olysio and SEK 87.5 million from sales of other pharmaceuticals. The profit/loss after tax was SEK 611.7 million (SEK 7.5 m).
  • Basic and diluted earnings per share totalled SEK 19.57 (SEK 0.24) and SEK 19.18 (SEK 0.24), respectively.
  • The cash flow from operating activities amounted to SEK 31.0 million (SEK -27.2 m), while liquid assets and short-term investments totalled SEK 430.4 million (SEK 279.9 m) at the period end.
Summary of the Group’s figures, continuing operations
(SEK m)
Q2 Q1-Q2 Full year
2014 2013 2014 2013 2013
Net turnover 564.0 40.7 772.2 218.8 446.1
Gross profit 518.8 23.5 700.9 183.8 374.3
Operating profit before depreciation and amortisation (EBITDA) 424.4 -46.9 521.2 43.6 76.4
Operating profit (EBIT) 416.2 -62.0 504.9 14.7 25.2
Profit/loss before tax 418.4 -62.1 508.7 14.5 27.7
Profit/loss after tax 327.8 -63.7 611.7 7.5 16.0
Operating margin, % 0.7 -152.3 0.7 6.7 5.6
Basic earnings per share, SEK 10.49 -2.04 19.57 0.24 0.51
Diluted earnings per share, SEK 10.28 -2.04 19.18 0.24 0.51
Cash flow from operating activities 88.7 -8.3 31.0 -27.2 43.0
Liquid assets and short-term investments at the period end 430.4 279.9 430.4 279.9 402.2

Significant events during Q2

  • Olysio (simeprevir) was approved within the EU for the treatment of adults with hepatitis C genotype 1 and 4 infection, and was launched by Medivir in Sweden, Denmark, Norway and Finland.
  • Adasuve was launched in Sweden, Norway, Finland and Denmark.
  • A supplemental New Drug Application for simeprevir in combination with sofosbuvir was submitted to the US FDA.
  • Final phase II COSMOS study data of simeprevir in combination with sofosbuvir was presented at EASL.
  • Two phase III trials evaluating combination treatment with simeprevir and sofosbuvir were initiated.
  • A new Board of Directors was elected at Medivir’s Annual General Meeting and Birgitta Stymne Göransson was elected Chairman of the Board.
  • Suscard was re-launched into the Swedish market.

Significant events after the end of Q2

  1. FDA granted Priority Review for simeprevir in combination with sofosbuvir supplementary New Drug Application.
  • Respiratory Syncytial Virus drug program was licensed from Boehringer Ingelheim.
  • Medivir’s Board of Directors has appointed Niklas Prager as new President and CEO of Medivir effective 1 September 2014.

* All figures refer to the Group, unless otherwise stated. Comparisons in the Interim Report are, unless otherwise stated, with the corresponding period in 2013. Cross Pharma was divested from the Group on 30 June 2013.

The hepatitis C market is predicted that the total turnover of 20 billion U.S. dollars to 2030!

http://www.achillion.com/HCV_overview

My summary:

The long-awaited new CEO, Niklas Prager, states that “I will be focusing on further value creation and enhanced visibility of Medivir´s potential ”

Today (9/7/2014), it is a fact that Medivir´s sales dramatically exceeds many analyst´s estimates.

Once a week, new prescription metrics are published by “H3NPHLO” and “A White Prism” on twitter/internet). The author (Cutting Edge Sicence Invest),  takes no accountability of the quality / accuracy of these numbers!). Even this week (ending September 5th)  and despite the fact that Sovaldi (Sofosbuvir, Gilead Sciences Inc, Nasdaq, GILD) dominates the market, Olysio seems to successfully defend its current market share (~25%).

At the Carnegie Small cap presentation (September 3th), Rein Piir (EVP Corporate Affairs & IR – Investor Relations) verbally mentioned that the sales number of Q3 will increase relative Q2

During the autumn, Medivir´s business strategy is expected to be announced and all that it entails. How will the full year´s extreme liquid assets be invested?

The market cap (~ 4000 mSEK) is very low in relation to the estimated full years liquid assets: ~2000 mSEK (Q1+Q2 = 850 mSEK, Q3 >Q2 (according to Rein Piir) and Q3 ~ Q4 (Cutting Edge Science Invest estimate).

The recent 3 months share price has been very volatile (~111 SEK – ~150 SEK, 138 SEK september 5th ) https://www.avanza.se/aktier/om-aktien.html/5380/medivir-b

Source:  https://twitter.com/H3NPHLO/status/507168948287438848

Australia: Pharmaceutical Benefits Scheme (PBS) will subsidize Olysio but not Sovaldi. This is sad news from an open market- and the patient´s perspective. http://hcvadvocate.blogspot.se/2014/08/australia-pbac-decisions-mixed-bag-for.html

J & J / Janssen has recently signed an Olysio agreement with Spain.  http://www.elconfidencial.com/sociedad/2014-07-28/simeprevir-la-mejor-noticia-en-los-ultimos-25-anos-para-los-pacientes-de-hepatitis-c_166679/

Medivir is already approved in the United States, Canada, Russia, Japan and Europe. Soon, more countries will probably follow. Asia? Africa?  South America?

What primarily makes a full analysis of the competitor space within the HCV disease area extremely difficult and complicated is the fact that there are at least 6 genotypes, i. e. genetic strains, of hepatitis C virus:

http://hepatitis.about.com/od/diagnosis/a/HCVGenotypes.htm

The American Association for the Study of Liver Diseases (AASLD) genotype/recommended treatment chart will also delivers more insight into this complex disease are:

http://www.hepmag.com/articles/2512_18756.shtml

Today, the main and correct focus by analysts is the near future launch of new HCV drugs and combos:

http://clinicaltrials.gov/show/NCT01628692 (Simeprevir and Daclatasvir, interferon free)

http://www.dddmag.com/news/2014/05/janssen-submits-snda-simeprevir-sofosbuvir-combo

http://www.hepmag.com/articles/sofosbuvir_simeprevir_2501_24726.shtml

http://www.hepmag.com/articles/Sovaldi_cost_2501_25467.shtml?utm_source=mpnews&utm_medium=include&utm_campaign=treatment

Medivir is awaiting its phase III data (OPTIMIST, Simeprevir/ Sofosbuvir).

“Combination therapy with Simeprevir and sofosbuvir (Gilead, the main competitor with about 75% market share today) without interferon and ribavirin in the previous phase II study COSMOS demonstrated favorable safety and efficacy results in genotype 1-infected hepatitis C patients. The purpose of the OPTIMIST trials is to coat these good results and to investigate the possibility of shortening the treatment time to eight weeks to possibly further simplify this promising treatment regimen ” (www.medivir.se)

I believe Medivir´s Simeprevir/Sofosbuvir combo will face fierce competition within the US post launch of the competitors drugs. But. I still believe other combinations containing Simeprevir ( Gilead´s Sovaldi/Sofosbuvir exluded) might be better positioned in the drug hunters race for the 20 billion U.S. dollars (http://www.achillion.com/HCV_overview).

Selected new Simeprevir data:

  • The phase III ATTAIN study in treatment-experienced adult patients with chronic hepatitis C virus (HCV) and compensated liver disease achieved its primary efficacy endpoint by demonstrating non-inferiority of simeprevir compared to telaprevir when both are given in combination with PegIFN/RBV. Simeprevir demonstrated superior safety profile including fewer adverse events (AEs), fewer serious adverse events (SAEs) and less anemia versus telaprevir.
  • Pooled analysis of data from the phase III QUEST-1 and QUEST-2 studies confirmed efficacy in treatment-naïve genotype 1b HCV patients, with 85 percent (ITT analysis) of treatment-naïve patients achieving SVR12 when treated with simeprevir in combination with PegIFN/RBV, compared to 53 percent when treated with placebo in combination with PegIFN/RBV.
  • In the PROMISE phase III trial of prior relapse patients, a subgroup analysis of genotype 1b patients demonstrated that 86 percent (ITT analysis) of these patients achieved SVR12 when treated with simeprevir in combination with PegIFN/RBV, compared to 43 percent when treated with placebo in combination with PegIFN/RBV.

http://www.medivir.se/v5/en/uptodate/pressrelease.cfm?releaseid=4EDB6FC299690E5F&year=2014

http://www.medivir.se/v5/en/uptodate/pressrelease.cfm?releaseid=38CAB19B5909B757&year=2014

The cost debates are getting more intense, due to the larger and larger patient groups are lining up to get the new superior treatment regimes. But has the cost debate been properly reviewed by analysts?

CVS Caremark estimates Sovaldi alone will add $300 to everybody’s insurance premium, with megadrugs for other common diseases like cholesterol and diabetes coming.

http://www.marketwatch.com/story/gileads-earnings-report-affects-every-american-2014-07-23

In fact and surprisingly often, articles referring to future Gilead competitors do not even mention Olysio/ J&J/Janssen/Medivir.

The dedicated swedish (Avanza/Medivir) bloggers have highlighted and answered many key questions in the Olysio market share discussion. One of these bloggers, Prisma, comments (summarized and translated by C.E.S.I.):

https://www.avanza.se/placera/forum/forum/medivir.html

“Today, Olysio is offering a treatment that costs 25-40% against competitors with high cure rates in genotype 1 and 4 with interferon-based treatment. The hype regarding interferon free treatment for a broader group of patients started primarily by analysts in the United States where insurance companies by law must offer the best treatment with the best side effect profile,  if approved by the FDA. Today, the market is focusing on the best treatment(s) – to a very high drug cost.

However, it seems that  US analysts forgot to take the non-insured patient community into consideration. Medicaid / care (100 million persons), prisons and veterans´ organizations are price sensitive! Analysts seem to have missed the fact that this type of drugs are so expensive for the community that the price often becomes a more important factor than convenience in drug recommendations. The key question is and will always be: To cure one patient in a comfortable regime or three in an uncomfortable regime?  In addition, Olysio cure rates are often better in its genotypes with interferon than e.g. Abbvie and BMS without supplimentary interferon. Most health care systems outside the United States are very price sensitive, thus in the future, Interferon-based therapy might still be attractive (as the price drops significantly). In addition and for  the majority of the current genotypes, the cure rates is equal or even higher.”

If J&J/Janssen/Medivir succesfully keeps a small market share, the yearly liquid assets will remain very high (multi-billions). I do believe that sales will decline, but only marginally or moderately.

Simeprevir/Olysio is also a key money maker for Johnson&Johnson. The following statement is extracted from the Johnson & Johnson´s 2014 Second-Quarter Results report:

“The strong sales results were primarily driven by new products including OLYSIO®/SOVRIAD® (simeprevir), for combination treatment of chronic hepatitis C in adult patients; XARELTO® (rivaroxaban), an oral anticoagulant; ZYTIGA®(abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer; INVOKANA® (canagliflozin), for the treatment of adults with type 2 diabetes; and IMBRUVICA® (ibrutinib), a kinase inhibitor for the treatment of mantle cell lymphoma and chronic lymphocytic leukemia in patients who have had at least one prior therapy.”

http://www.investor.jnj.com/releasedetail.cfm?ReleaseID=859681

Johnson&Johnson/Janssen is not a one-trick pony. I expect that over time, the company and it´s world class sales force aggressively will nurture global sales by signing new deals with more countries and creatively drive sales of new combinations containing Simeprevir. The presumable (lowering) drug price strategy* will of likely also be applied by Johnson&Johnson/Janssen/Medivir.

http://www.streetinsider.com/Analyst+Comments/Generic+Sovaldi+For+Poor+Countries+is+Nothing+New,+Says+RBC+(GILD)/9809945.html

0% global Market share within a few months? My prognosis and answer is simply “Very unlikely”.

In this link you´ll find Medivir´s entire research portfolio, but in this (first?) article, I choose not to comment upon additional potential near future share value triggers.

http://www.medivir.se/v5/se/RnD/project_portfolio.cfm

Let´s just state that Medivir’s research portfolio should mature as time goes by…

Medivir has recently introduced new drugs on the market: Adasuve (schizophrenia, the first inhalable drug for the treatment of agitation) and Suscard (angina, the most common heart disease in the Western world). Medivir has also in-licensed a RS-program from Boehringer Ingelheim

Jefferies has published this estimate of near future sales:

https://twitter.com/H3NPHLO/status/446265282802094080/photo/1 ,

but today’s figures are substantially higher:

https://twitter.com/A_White_Prism/media

Main risk: That the competitors near future launches very quickly results in a 0 % global market share for Olysio and Simeprevir (in various combos). Ok, new drugs and combos are entering the arena (Merck, Gilead, Abbvie etc, Bristol Myers Squibb etc.). Gilead will have an edge in the US with its (expensive) Ledispavir/Sofosbuvir (the Simeprevir/Sofosbuvir combo will also be expensive).

AbbVie, with the antiviral agents ABT-267, ABT-333 and ABT-450/ritonavir, will require multiple treatments per day (which might be classified as a difficult/complex practical procedure for the patient)

http://www.fiercebiotech.com/story/gilead-gets-its-hep-c-combo-fda-abbvie-race-heats/2014-02-10

http://www.fiercebiotech.com/story/abbvie-heads-fda-its-hep-c-combo-race-gilead-merck/2014-04-22

http://seekingalpha.com/article/2260133-gilead-sciences-killing-the-competition-with-sovaldi-but-does-this-make-gilead-a-one-trick-pony

Miscellaneous risks (not mentioned above):

Risk 1: Gilead withdraws sales of Sovaldi (Sofosbuvir) after launch of the Sofosbuvir/Ledipasvir combo. I see this as highly unlikely. Primarily and to the best of my knowledge, Sovaldi is the biggest launch ever of a new drug in first-quarter sales .

Risk 2: External negative market factors (global crisis, war, global stock market collapse).

Risk 3: Unexpected toxicity findings post drug launches.  The probability should be low due to the short period of treatment (24 or 12 weeks, soon maybe 8!)

Update Jan 2015: The market does not embrace JNJ sufficiently and the sales has been lower than the market expected. Therefore C.E.S.I. awaits the right moment to re-enter Medivir.

Best regards, Cutting Edge Science Invest

Cutting Edge Science Invest is currently not a share holder (this post was slightly updated jan 20, 2015)

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Cutting Edge Science Invest also wants to point out that the real risks are those you never knew existed – until it was too late.