Business Model
Applied Nanotech Holdings, Inc. follows a three-pronged business model involving R&D Services, IP Licensing, and subsidiary or joint venture relationships.
We are first and foremost a research and development company. Over the years, we have produced an extensive portfolio of intellectual property with the goal of developing a portfolio of recurring revenue streams by licensing our intellectual property to others.
Our research and development efforts occur across a continuum moving from concept to commercialization as follows:
To aid in the process of moving our technologies from concept to commercialization, we frequently perform funded research for both government entities and large corporations. This enables us to focus our resources in areas that have the highest level of interest to others, and thus the highest probability for commercialization.
Our research takes place in several phases. The initial phase is usually a small project involving less than $100,000 in funding, with the goal of proving the feasibility of the proposed product or technology and moving it from concept to laboratory-based proof of concept. In some cases, generally those technologies that are viewed as low risk with a strong earning potential, we will perform the initial phase of research at our own cost.
The second phase, usually with $100,000 to $1,000,000 of funding involves the actual development of a product using the technology, or moving the technology from the laboratory to early stage development. The majority of our efforts are focused in this area. It is extremely rare that we move to this phase of development without outside funding.
Depending on the complexity of the product involved, a third phase may be required. This stage is structured in conjunction with a strategic partner as a joint venture, subsidiary, or some other form of relationship.
During the course of our R&D projects, we normally create intellectual property. It is our goal to license this IP to a partner or partners for product commercialization and to establish a recurring royalty stream.
Our typical royalty agreement consists of both an upfront payment and an ongoing royalty based on sales of products using the technology. If a royalty agreement includes exclusivity for a particular technology or market, it will also include required minimum royalty payments. As additional royalty generating license agreements are signed and products shipped by licensees of our technology generate royalties to us, multiple revenue streams are created. We have no manufacturing facilities and have no intention of establishing any such facilities on our own. We may participate in manufacturing operations with our partners through the use of subsidiaries, joint ventures, or other arrangements.
Current License Agreements
- Large Japanese Chemical Company (Conductive Copper Inks)
- Large Japanese Sporting Goods Company (Nanocomposites)
- Large Multinational Power Transformers (Hydrogen Sensor)
- Futaba, Inc. (Display applications-Electronic Emissions)
- Novus Partners, LLC (Digital Signage Networks)1
- Canon, Inc. (Field Emission Displays)
1 While the Novus Partners agreement is not technically a license agreement, it is structured as such. It includes future payments to us based on a percentage of the revenue of Novus Partners.