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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED June 30, 2005
Commission File No. 011-15499
ADVANCE NANOTECH, INC.
(Exact name of registrant as specified in its charter)
Colorado 82-0379959
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Lexington Avenue, 29th Floor, New York, NY, 10022
-----------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (212)583 0080
---------------
(ARTWORK AND BEYOND, INC)
-------------------------------------------------------------------------------
(Former Name)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes |X| No |_|
Number of shares of Common Stock outstanding as of July 7, 2005: 33,081,401
ADVANCE NANOTECH, INC
TABLE OF CONTENTS
Page
PART 1 - FINANCIAL INFORMATION
Item 1 Financial Statements 1-7
Item 2 Management's Discussion and Analysis or Plan of Operation 7-10
Item 3 Controls and Procedures 10
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 10
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information 10
Item 6 Exhibits and Reports on form 8-K 10
Signatures 11
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ADVANCE NANOTECH, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY ARTWORK AND BEYOND, INC.)
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 2005
ASSETS
Current assets
Cash and cash equivalents $ 13,390,250
Prepaid licensing fees 106,032
Prepayments 1,590,746
Loans receivable 120,074
Other current assets 221,456
------------
Total current assets 15,428,557
Office equipment, net 229,133
------------
$ 15,657,690
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 865,331
Accrued expenses 82,541
------------
Total liabilities 947,872
------------
Stockholders' equity
Common stock; $0.001 par value; shares authorized 100,000,000;
Shares issued and outstanding 33,081,428
33,083
Additional paid in capital 64,578
Warrant Valuation 23,883,077
Accumulated other comprehensive income (135,190)
Deficit accumulated during development stage (9,135,730)
------------
Total stockholders' equity 14,709,818
------------
$ 15,657,690
============
The accompanying notes are an integral part of these financial statements.
1
ADVANCE NANOTECH, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY ARTWORK AND BEYOND, INC.)
CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE LOSS
(Unaudited)
[Enlarge/Download Table]
From Inception
Three months Six months (August 17, 2004)
ending ending to
June 30, 2005 June 30, 2005 June 30, 2005
------------ ------------ ------------
Costs and expenses
Research and development 1,718,098 $ 4,652,705 $ 5,388,112
General and administrative 1,703,851 2,985,538 $ 3,837,469
------------ ------------ ------------
Loss from operations (3,421,949) (7,638,243) (9,225,581)
Interest income 68,919 88,373 89,852
------------ ------------ ------------
Net loss $ (3,353,031) $ (7,549,870) $ (9,135,729)
Foreign currency translation adjustment (145,805) (155,018) (135,381)
------------ ------------ ------------
Comprehensive loss $ (3,498,837) $ (7,704,889) $ (9,271,111)
============ ============ ============
Net loss per share- basic and diluted $ (.11) $ (.26) $ --
============ ============ ============
Weighted average shares outstanding-
basic and diluted 33,047,527 30,087,694 --
============ ============ ============
The accompanying notes are an integral part of these financial statements.
2
ADVANCE NANOTECH, INC
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY ARTWORK AND BEYOND,INC.)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED June 30, 2005 AND FOR THE PERIOD FROM INCEPTION
(AUGUST 17, 2004) TO June 30, 2005
(Unaudited)
[Enlarge/Download Table]
Additional
Common Stock Paid in Warrant Warrant
Shares Amount Capital Shares Valuation
----------- ------- ---------- ---------- -----------
Initial capitalization 200,000 200 -200
Acquisition shares, net of
financing costs 19,352,778 19,354 -444,354
Shares issued at $1/sh 1,500,000 1,500 1,498,500
Shares issued for cash 112,500 113 224,887
Net loss to Dec 31,2004 0 0 0
Foreign currency translation 0 0 0
----------- ------- ----------- ---------- -----------
Balance, Dec 31, 2004 21,165,278 21,167 1,278,833 0 0
=========== ======= =========== ========== ===========
Shares issued for cash 11,666,150 11,666 20,568,944
Common Stock Warrants -19,626,913 5,889,326 19,626,913
Placement Agent Warrants -4,256,164 984,866 4,256,164
Net loss for 3 months ended
March 31, 2005
Foreign currency translation
----------- ------- ----------- ---------- -----------
Balance as at March,31 , 2005 32,831,428 32,833 -2,035,300 6,874,192 23,883,077
=========== ======= =========== ========== ===========
Shares issued, net of
financing costs 250,000 250 2,099,750
Net Loss for 3 months ended
June 30, 2005
Foreign currency translation
----------- ------- ----------- ---------- -----------
Balance as at June, 30, 2005 33,081,428 33,083 64,450 6,874,192 23,883,077
=========== ======= =========== ========== ===========
Deficit Accumulated
Accumulated Other Total
During Comprehensive Stockholders'
Development Income Equity
---------- -------- -----------
Initial capitalization 0 0 0
Acquisition shares, net of
financing costs 0 0 -425,000
Shares issued at $1/sh 0 0 1,500,000
Shares issued for cash 0 0 225,000
Net loss to Dec 31,2004 -1,585,859 0 -1,585,859
Foreign currency translation 0 19,828 19,828
---------- -------- -----------
0
Balance, Dec 31, 2004 -1,585,859 19,828 -266,032
========== ======== ===========
Shares issued for cash 20,580,610
Common Stock Warrants 0
Placement Agent Warrants 0
Net loss for 3 months ended -4,196,840 -4,196,711
March 31, 2005
Foreign currency translation -9,213 -9,213
---------- -------- -----------
Balance as at March,31 , 2005 -5,782,699 10,615 16,108,655
========== ======== ===========
Shares issued, net of
financing costs 2,100,000
Net Loss for 3 months ended
June 30, 2005 -3,353,031 -3,353,031
Foreign currency translation -145,805 -145,805
---------- -------- -----------
Balance as at June, 30, 2005 -9,135,730 -135,190 14,709,819
========== ======== ===========
(1) All shares issued reflect a 100 to 1 reverse split effective October 5,
2004. The accompanying notes are an integral part of these financial
statements 3
3
ADVANCE NANOTECH, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY ARTWORK AND BEYOND, INC.)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
[Enlarge/Download Table]
From Inception
Six months (August 17, 2004)
ending to
June 30, 2005 June 30, 2005
------------ ------------
Cash flows from operating activities
Net loss $ (7,549,870) $ (9,135,729)
Adjustments to reconcile net loss to cash flows
used in operating activities
Depreciation 27,903 33,419
Common stock issued for services 2,100,250 2,100,250
Changes in operating assets and liabilities
Decrease (increase) in prepaid licensing fees 749,515 (106,032)
Increase in prepayments (1,590,746) (1,590,746)
Increase in other assets (155,168) (221,456)
Increase in loan receivable (120,074) (120,074)
Increase in accounts payable 680,485 865,331
(Decrease) increase in accrued expenses (316,711) 82,541
------------ ------------
Net cash used in operating activities (6,174,416) (8,092,496)
------------ ------------
------------ ------------
Cash flows from investing activities - equipment acquisition (206,243) (262,552)
------------ ------------
Cash flows from financing activities - proceeds from credit facility
Proceeds from related party credit facility - Jano Holdings -- 4,332,379
Payments on related party credit facility - Jano Holdings (1,653,395) (2,832,379)
Proceeds from issuance of common stock 20,580,488 20,805,488
Financing fees on merger shares issued -- (425,000)
Advances to related party -Electronic Game Card -- 110,596
Repayments to related party - Electronic Game card (10,596) (110,596)
------------ ------------
Net cash from financing activities 18,916,497 21,880,488
------------ ------------
------------ ------------
Effect of exchange rates on cash and equivalents (155,018) (135,190)
------------ ------------
------------ ------------
Net increase in cash and equivalents 12,380,820 13,390,250
------------ ------------
Cash and equivalents
Beginning of period 1,009,430 --
------------ ------------
End of period $ 13,390,250 $ 13,390,250
============ ============
Supplemental disclosure of cash activities
Cashpaidforinterestandincometaxes $ -- $ --
============ ============
Conversionofamountsdueonrelatedpartycreditfacility
tocommonstock $ -- $ 1,500,000
============ ============
Supplemental cash flow information - no interest or income taxes were paid in
the period. The accompanying notes are an integral part of these financial
statements
4
ADVANCE NANOTECH, INC
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY ARTWORK AND BEYOND,INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND NATURE OF BUSINESS
Advance Nanotech Inc. ("ANI"), a Delaware corporation formed on August 17, 2004,
merged with Artwork and Beyond, Inc. ("Artwork") effective October 1, 2004 in a
transaction accounted for as a reverse merger, which resulted in the operations
of ANI continuing in the capital structure of Artwork and the operations of
Artwork being transferred to its previous owners. ANI's shareholders exchanged
all their 20,000,000 shares of common stock outstanding for 70,000,000 shares of
newly issued Artwork common stock and a further 1,910,000,000, shares.
Immediately prior to the merger, Artwork had 17,344,568 shares of its common
stock outstanding; accordingly, after the merger, there were 87,344,568 shares
of common stock outstanding owned 80% by ANI's shareholders and 20% by Artwork's
shareholders. On October 5, 2004, the new Board of Directors approved (1) the
issuance of 1,910,000 shares of common stock to ANI's shareholders (2) the
change of the issuer's name to Advance Nanotech, Inc. and (3) a one for 100
reverse stock split that resulted in an aggregate of 19,552,778 post split
shares outstanding, owned 99% by ANI's previous shareholders and 1% by Artwork's
previous shareholders. The acquisition resulted in ANI's management and Board of
Directors assuming operational control of the Company. ANI owns all the issued
and outstanding shares of Advance Nanotech Limited ("ANL"), a UK company, which
in turn owns 60% of the outstanding shares of Owlstone Limited ("Owlstone"), a
research and development company, 55% of Bio-Nano Sensium Technologies, Ltd
(formerly Imperial Nanotech Ltd), 75% of Nano Solutions Limited, 90% of Advance
Nanotech (Singapore) Pte Ltd., and all the outstanding shares of the following
inactive UK companies: Nano Devices Limited, Intelligent Materials Limited,
Biostorage Limited, Nano Electronics Limited, Nanolabs Limited, Nano Biosystems
Limited, Cambridge Nanotechnology Limited, Nano Photonics Limited, NanoFED
Limited, Inovus Materials Limited, Advance Proteomics Limited, Nano Diagnostics
Limited, Exiguus Technologies Limited, Visus Nanotech Limited, Intelligent
Biosensors Limited, Econanotech Limited, Nanocomposites Limited, Nanovindex
Limited, NanoOptics Limited.
The Company specializes in the research and development of nanotechnology
through acquisitions of and collaborations with others. Nanotechnology is
science at the atomic or molecular level that is expected to make most products
lighter, stronger, less expensive and more precise. The Company's interests are
focused in three nanotechnology areas, namely: electronics, biopharma and
materials. The Company's development network creates an opportunity to advance
the development of University research-programs. The Company's business strategy
is to develop its existing nanotechnology product candidates, acquire additional
early-mid stage product candidates in the electronics, biopharma, and materials
sectors, selectively license its technology and establish strategic
collaborations to advance its product pipeline.
BASIS OF PRESENTATION
The accompanying consolidated financial statements were prepared by the Company
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations. In management's
opinion, all necessary adjustments, which consist primarily of normal recurring
adjustments, to the financial statements have been made to present fairly the
financial position and results of operations and cash flows. The results of
operations for the three months ended June 30, 2005 are not necessarily
indicative of the results that may be expected for the fiscal period ending
December 31, 2005. The Company has previously filed with the SEC an annual
report on Form 10-KSB which included audited financial statements as of December
31, 2004. It is suggested that the financial statements contained in this filing
be read in conjunction with the statements and notes thereto contained in the
Company's 10-KSB filing.
5
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of ANI and all its
subsidiaries (the "Company"). Minority shareholders of Owlstone (40%), Nano
Solutions (25%), Advance Nanotech (Singapore) Pte. Ltd. (10%) and Bio-Nano
Sensium (45%) are not required to fund losses; accordingly no losses have been
allocated to them. All significant inter-company accounts and transactions have
been eliminated.
GOING CONCERN
The accompanying consolidated financial statements have been prepared on the
basis of accounting principles applicable to a going concern, which assume that
the Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
DEPRECIATION
Fixed assets are stated at cost. Depreciation is provided at the following
annual rates in order to write off each asset over the estimated useful lives,
generally 3 years, as follows:
Asset Rate
----------------------------- ----------------------------
Plant and Machinery Equipment 25 % reducing balance method
Office Equipment 25 % reducing balance method
Computers 25 % reducing balance method
Maintenance and repairs are charged to operations; betterments are capitalized.
Depreciation expense for the six months ended June 30, 2005 is $ 27,903.
FOREIGN CURRENCY TRANSLATION
The Company's primary functional currency is the British Pound. Assets and
liabilities are translated using the exchange rates in effect at the balance
sheet date. Expenses are translated at the average exchange rates in effect
during the year. Translation gains and losses not reflected in earnings are
reported in accumulated other comprehensive losses in stockholders' deficit.
SUBSEQUENT EVENT
On July 28, 2005, Advance Nanotech acquired 10.83 percent equity stake for
approximately $183,000 in Singular ID, a high technology spin-off company from
the Institute of Materials Research and Engineering (IMRE) in Singapore. Under
terms of the agreement, Advance Nanotech's Senior Vice President of Business
Development, Stephanie Interbartolo, will assume a seat on Singular IDs Board of
Directors. Singular ID provides individually tailored tagging solutions designed
to combat counterfeiting and forgeries. The technology offers unique,
irreproducible tags with nanoscale magnetic regions that act like fingerprints
to identify each tagged item. Advance Nanotech will help Singular ID further
develop and commercialize this technology.
NOTE 2 - OTHER CURRENT ASSETS
June 30, 2005, other current assets consist primarily of security deposits and
miscellaneous other debtors.
NOTE 3 - COMMITMENTS
The Company signed a new five year lease on May 12, 2005 for its office
facilities from Hines in New York for an aggregate monthly rent of approximately
$15,168. The lease expires in September 2010. The company also has leased
offices in Cambridge (UK) and Newcastle University (UK) with the leases expiring
on 31 May 2006 and 15 August 2005, with monthly rents of approximately $2,700
and $475 respectively. Rents incurred through June 30, 2005 approximated $
153,985.
Advance Nanotech Limited agreed to provide Owlstone $2 million over two years
for the development of a chemical sensor.
On November 2, 2004, the Company announced a research collaboration agreement
between Nano Solutions Limited and Imperial College, London, to provide $6.25
million for the development of bio-nanotechnologies, predominantly in the
healthcare devices sector. Payments of approximately $900,000 are due quarterly
through October 2007.
On December 13, 2004, NanoFED Limited entered into a $2 million development
contract with the University of Bristol, to further develop the existing
technologies the University has generated in the area of field emission
displays. Payments are due quarterly through December 2006.
On December 24, 2004, Cambridge Nanotechnology, a wholly-owned subsidiary of the
Company entered into a Collaboration agreement with the University of Cambridge
to provide $5.25 million dollars for the development of nanotechnologies,
predominantly in the optical sector. Payments are due quarterly through December
2008.
On December 28, 2004, Nano Electronics Limited, a wholly-owned subsidiary of the
Company entered into a $3.96 million research collaboration and license
agreement with Laboratory Services Limited for the development of three
technologies in the fields of DNA-based sensing, a DNA-based storage technology
and a project based on functional oxide nano tubes for micro fluidics and data
storage. Payments are due quarterly through December 2007.
6
On January 14, 2005, the Company signed a strategic partnership with the new
Centre for Advanced Photonics and Electronics (CAPE) at the University of
Cambridge. The Company joined Alps Electric Company Limited, Dow Corning
Corporation and Marconi Corporation plc with researchers in the Electrical
Engineering Division of the Department of Engineering at the University of
Cambridge. CAPE is intended to house the Electrical Division of the engineering
department at the University, comprising over 22 academics, 70 post-doctoral
researchers and over 170 researchers. Construction of the new building is
underway and scheduled for completion in early 2006. The Company, as a Strategic
Partner to CAPE, will provide additional and innovative commercialization
opportunities for the technologies developed in the centre, with a particular
emphasis on nanotechnology. In addition, the Strategic Partners, together with
the University of Cambridge, nominate representatives to the Steering Committee
which is responsible for the overall research objectives of CAPE, its areas of
technical focus and arising intellectual property arrangements. The Company has
committed $4.95 million over five years for the funding of specific projects
within CAPE, which may include jointly-funded collaborations with the other
Strategic Partners. Payments are due each quarter through ending October 2009.
On January 24, 2005, the Company's subsidiary, Bio-Nano Sensium Technologies
Limited, entered into a collaboration agreement with Toumaz Technologies
Limited. Under the terms of the agreement Bio-Nano Sensium Technologies Limited
is to fund the development of an implantable blood-glucose sensor over 21 months
with a total funding commitment of $3.96 million, made in quarterly payments.
Additionally, the Company transferred 45% ownership of Bio-Nano Sensium
Technologies Limited to Toumaz Technologies Limited and its owner, Professor
Toumaz. Bio-Nano Sensium Technologies Limited has the exclusive world-wide
rights to Toumaz Technologies Limited portfolio of background patents and patent
applications for the devices operating within the bio-nano world - for example,
medical sensing devices, plus all arising intellectual property.
NOTE - 4 RELATED PARTY TRANSACTIONS
Jano Holdings (Jano). A shareholder of the Company, JMSCL Limited, is a
subsidiary of Jano. As of June 30, 2005, the Company has no amounts outstanding
under its $20 million line of credit facility agreement with Jano. If the
facility is used by the Company it bears interest at an Annual Rate equal to the
Applicable Federal Base Rate (as defined in Section 1274(d) of the Internal
Revenue Code of 1986) and is repayable in the event that the Company raises $25
million dollars in equity funding. In conjunction with the facility, the Company
issued Jano warrants for 6,666,667 shares of common stock at an exercise price
equal to the price of stock offered in the first equity fund raising by the
Company. The warrants expire 5 years from the date of issue. No value has been
attached to these warrants.
NOTE 5 - STOCK TRANSACTIONS
In March 2005, the Company completed its private placement of 11,778,630 shares
of its common stock for aggregate gross proceeds of $23,55;;300. Net proceeds
from the transaction, after issuance costs and placement fees, were $20,805,610.
"In connection with this transaction, the Company also issued one warrant to
purchase one share of common stock to each investor for every two shares of
common stuck purchased in the private placement resulting in an aggregate of
5,893,325 warrants ("Investor Warrants") being issued to investor at an exercise
price of $3.00 per share. The Company also issued warrants to the placement
agent ("Agent Warrants") to purchase 984,866 shares of its common stock at $2.00
per share. The shares and the warrants were sold by the Company to the investors
on the terms and conditions set forth in the Securities Purchase Agreement filed
as Exhibit 10.10 in a Current Report on Form 8-K filed on March 4 2005, which is
specifically incorporated herein by reference. The fair value of the Investor
Warrants was estimated at $19,626,913 using the Black-Scholes option pricing
model with the following assumptions: no dividend, risk-free interest rate of
3.5%, the contractual life of 3 Years and volatility of 30%. The fair value of
the Agent Warrants was estimated at $4,256,164 using the Black-Scholes option
pricing model with the following assumptions: no dividend, risk-free interest
rate of 3.5%, the contractual life of 5 years and volatility of 30%. The fair
value of the Agent warrants was considered to be additional placement fees and
has been offset against additional paid in capital.
On June 2, 2005 the Company filed a registration statement on SEC Form SB2 to
register 26,305,374 shares of common stock. This total number includes 9,960,250
shares issued in a first private placement, 5,875,902 shares underlying warrants
issued in conjunction with the first private placement, 1,818,400 shares issued
in a second private placement, 998,290 shares underlying warrants issued in
conjunction with a second private placement, and 7,652,532 additional shares
with "piggy-back" registration rights. As of June 30, 2005 the registration
statement has not been declared effective and is pending review and comment by
the SEC.
On June 3, 2005 Advance Nanotech issued 250,000 shares of restricted common
stock to Brockington Securities as compensation for its advisory services as a
non-exclusive financial advisor, investment banker and placement agent to the
Company.
On June 24, 2005 the Company changed its stock transfer agent. Following board
approval, the company replaced former transfer agent, Executive Registrar &
Transfer, with Computershare Trust Company, Inc. of 350 Indiana Street, Suite
800, Golden, CO 80401.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
FORWARD LOOKING STATEMENTS: NO ASSURANCES INTENDED
This Form 10-QSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. This filing includes statements regarding our plans,
goals, strategies, intent, beliefs or current expectations. These statements are
expressed in good faith and based upon a reasonable basis when made, but there
can be no assurance that these expectations will be achieved or accomplished.
Sentences in this document containing verbs such as "believe," "plan," "intend,"
"anticipate," "target," "estimate," "expect," and the like, and/or future-tense
or conditional constructions ("will," "may," "could," "should," etc.) constitute
forward-looking statements that involve risks and uncertainties. Items
contemplating, or making assumptions about, actual or potential future sales,
market size, collaborations, trends or operating results also constitute such
forward-looking statements.
Although forward-looking statements in this Report on Form 10-QSB reflect the
good faith judgment of management, such statements can only be based on facts
and factors currently known by management. Consequently, forward-looking
statements are inherently subject to risks and uncertainties, and actual results
and outcomes may differ materially from the results and outcomes discussed in,
or anticipated by, the forward-looking statements. Readers are urged not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this Report. We undertake no obligation to revise or update any
forward-looking statements in order to reflect any event or circumstance that
may arise after the date of this Report.
7
The following discussion should be read along with the un-audited financial
information for the current period.
OVERVIEW
The Company specializes in the acquisition and commercialization of
nanotechnology. The Company's interests are focused in three nanotechnology
areas, namely: electronics, biopharma and materials.
The Company provides investment to bridge patented innovation with the capital
markets. The Company's development network creates economic and time
efficiencies which can advance the development of University research-programs
to marketable product lines in high-value markets.
Leading Universities across the world are generating pioneering research in the
nanotechnology area. This research is typically funded by government grants or
under contract by large industrial businesses. There are many research projects
which offer the potential for commercialization, in valuable markets, and yet
are under resourced due to a lack of funding. The Company has identified an
opportunity to fund multiple, early-stage nanotechnology research programs
within leading Universities, as the first and crucial step in developing and
commercializing new products. This commitment to invest, bridges the gap between
leading, patented innovation and the capital markets.
The Company actively sought portfolio expansion opportunities in the second
quarter of 2005. The Company received information from multiple academic
institutions and businesses regarding potential research collaborations and
business transactions in all three sectors: electronics, biopharma, and
materials. The potential projects are currently undergoing the Company's
internal assessment process.
In the second quarter of 2005, the Company participated in a number of industry
related conferences including: Hanover Fair 2005 (Hanover, Germany), World
Nano-Economic Conference (Dublin, Ireland), EUSPEN 2005 (Montpellier, France),
NSTI Nanotechnology Conference (Anaheim, CA), and Nanotrends 2005 (Munich,
Germany). Additionally, the Company acted as a sponsor to the 2005 Milken
Institute Global Conference. The Company's CEO, Magnus Gittins, was invited to
speak at a number of the conferences. Conference participation served not only
to increase industry awareness of Advance Nanotech but also allowed company
representatives to make strategic contacts with potential research and business
development partners.
In the second quarter of 2005, the Company completed the incorporation of
Advance Nanotech (Singapore) Pte Limited, of which it owns 90% The Singaporean
entity will be the vehicle for all acquisitions and portfolio additions
throughout the South East Asian region.
On July 28, 2005, Advance Nanotech acquired 10.83 percent equity stake for
approximately $183,000 in Singular ID, a high technology spin-off company from
the Institute of Materials Research and Engineering (IMRE) in Singapore. Under
terms of the agreement, Advance Nanotech's Senior Vice-President of Business
Development, Stephanie Interbartolo, will assume a seat on Singular IDs Board of
Directors. Singular ID provides individually tailored tagging solutions designed
to combat counterfeiting and forgeries. The technology offers unique,
irreproducible tags with nanoscale magnetic regions that act like fingerprints
to identify each tagged item. Advance Nanotech will help Singular ID further
develop and commercialize this technology.
In July 2005, the Company welcomed three new Senior Vice Presidents to the
management team. Each executive will be responsible for overseeing technology
assessment and research project management in one of the nanotechnology sectors,
electronics, biopharma, and materials, on which the Company is focused. The new
employees include: Dr. Peter Gammel (electronics), Dr. Michael Helmus
(biopharma), Dr. Fred Allen (materials).
Dr. Peter Gammel brings over 25 years experience in electronics. Prior to
joining Advance Nanotech Dr. Gammel held the position of CTO of Agere Systems'
Analog Products Business Unit where he was responsible for the advancement of
the firm's analog product offerings. Dr. Gammel also served as the Director of
Materials Physics Research at Lucent Technologies and in several leadership
positions at AT&T Bell Laboratories. Before entering the corporate world, Dr.
Gammel taught and conducted research at several leading universities, including
Cornell University, M.I.T. and Washington University. He holds a PhD in physics
from Cornell and two BS degrees from M.I.T., in Physics and Mathematics. Dr.
Gammel is responsible for approximately 50 patent filings and over 200
publications through his work with Agere, Lucent, AT&T Bell Labs, Cornell
University, and MIT.
Dr. Michael Helmus brings over 33 years of medical device research and
development and business development for the improvement and development of the
next generation implants, devices and tissue engineered constructs. Prior to
joining Advance Nanotech Dr. Helmus was Vice President, Advanced Biomaterials
for Boston Scientific Corporation where he directed a center that leverages
biomaterials knowledge, expertise, and technology, evaluates and exploits, new
material technologies. Dr. Helmus has also held leadership positions at other
medical device companies including, Edwards Lifesciences, Heart Valve Therapy as
Director R&D, Materials And Tissue Technology, Schneider Usa, Pfizer Inc., as
Principal Research Scientist and St. Jude Medical, Inc. In the course of his
career Dr. Helmus has filed 47 patents, authored 47 technical publications and
written 29 technology and market assessments. Dr. Helmus retains an Adjunct
Assistant Professorship at the Department of Biomedical Engineering, Worcester
Polytechnic Inst. Biomaterials in the Design of Medical Devices.
8
Dr. Fred Allen provides over 18 years of experience from Engelhard Corporation,
a leading materials company, where most recently he held the position of
Manager, Technology Assessment & Characterization Section, Strategic
Technologies Group. In this position Dr. Allen lead the Nanotechnology and
Advanced Battery Materials programs with specific responsibilty for assessing
technology and analyzing market opportunities. Dr. Allen brings business
development and extensive technical problem solving experience. He has
collaborated with others in R&D, sales, marketing, legal, manufacturing and
safety, as well as external customers, regulators and scientists in academic,
government, and commercial labs. Dr. Allen earned his Doctorate from Harvard
University where he specialized in Mineralogy & Crystallography during which he
held a National Science Foundation Graduate Fellowship. Dr. Allen has originated
10 patent filings, authored 10 publications and in 2004 founded the Greater
Garden State Nanotechnology Alliance, an organization for which he remains as
Chairman.
The Company relocated its corporate headquarters in May 2005. The new office is
at 600 Lexington Ave on the 29th Floor in New York, New York, 10022.
SUBSIDIARIES
The Company currently has a wholly owned subsidiary Advance Nanotech Ltd (ANL).
ANL owns 60% Owlstone Limited, 75% of Nano Solutions Limited, 55% of Bio-Nano
Sensium Technologies Limited, and 100% of Nano Devices Limited, Intelligent
Materials Limited, Biostorage Limited, Nano Electronics Limited, Nanolabs
Limited, Nano Biosystems Limited, Cambridge Nanotechnology Limited, Nano
Photonics Limited, NanoFED Limited, Inovus Materials Limited, Advance Proteomics
Limited, Nano Diagnostics Limited, Exiguus Technologies Limited, Visus Nanotech
Limited, Intelligent Biosensors Limited, Econanotech Limited, Nanocomposites
Limited, Nanovindex Limited, NanoOptics Limited, all of which are incorporated
under the laws of England. The Company also owns 90% of Advance Nanotech
(Sinapore) Pte Limited, which is incorporated under the laws of Singapore.
ADVANCE NANOTECH LIMITED ("ANL")
ANL identifies nanotechnology products and technologies for acquisition and
subsequent commercialization.
Bio-Nano Sensium Technologies Limited
Sensium Technologies is a joint venture company established by Advance Nanotech
and Toumaz Technology Limited, a leading developer of silicon devices that
operate at power levels up to one hundred times less than other state-of-the-art
components. Originally formed in 2000 as a spinout from Imperial College,
London, by Professor Chris Toumazou and Keith Errey, Toumaz is located in
Oxfordshire, UK and employs over 20 researchers. The Sensium is an enabling
technology which provides an ultralow power sensor and information processor.
The Sensium is an ideal platform for the next generation of implantable bio
monitors which use nanotechnology and wireless communications to monitor and
report on medical conditions, such as vital signs, on a continuous basis from
within the body itself.
Such monitors will take healthcare to the next level of preventative medicine,
where systems diagnose and treat medical conditions This joint venture company
has the exclusive rights to exploit the Sensium in all bio-nano markets and for
every company within the Advance Nanotech portfolio. Not only does the Sensium
offer immediate competitive advantage to Advance Nanotech companies as a
valuable differentiator, but it provides a platform technology which will enable
safe bio-nanostructured devices such as cardiac monitoring within an overall
sensing market projected to be worth $50.6 billion in 2008.
Technology
The Sensium is a generic wireless sensor and information processor combining a
programmable sensor interface with local intelligence using the proprietary
ultra-low power nano-CMOS based systems technology of Toumaz Technology Ltd. The
Sensium has an ultra-low power transceiver platform that can be programmed to
operate in different frequency bands and under various standard wireless
platforms. The Sensium offers a nano-powered computing and, communication
device, sensor, and power source in a single silicon package. This technology is
ideal for integration with bio-nanosystems, where final product devices must be
small, low power, possess on-board processing capability and incorporate
wireless communications.
Digital processing devices and architectures are widespread and are used
throughout the communications and computing industries. However, the
computational complexity and low power consumption demanded by many proposed new
products, such as hand held computers (PDA's), ultra low power radio devices,
body worn or implanted monitors and so on, cannot be achieved by simply making
bigger and faster digital chips. In contrast, analogue processing can achieve
high levels of computational complexity at significantly reduced power levels.
However, the multi-dimensional nature and perceived difficulty of analogue
integrated circuit design has generally inhibited the development of analogue
processors and architectures. Toumaz Technology is focussed on the development
and exploitation of advanced mixed signal' (AMxTM) semiconductors that use
digital elements to dynamically reconfigure, control, monitor and calibrate
functional analogue processing blocks. This structure allows these processing
blocks to be re-useable design elements or IP blocks in signal processing and
low power radio systems. The wider use of analogue processing techniques has
been hindered by the lack of such building blocks.
While there is no assertion that this new low power mixed signal technology will
replace digital processing in general, it will be applicable to a wide range of
situations wherever low power is an essential design concern. Target markets
include portable or autonomous battery operated devices. Example products
include mobile communications devices, multi-standard wireless transceivers, MP3
players, security tags, smart cards and sensors and monitoring devices,
particularly those used for medical/health and military/aerospace applications.
9
Sensium Technologies is integrating the ultra-low power AMx(TM) processing with
low power wireless systems for bionanotechnology products. Low power AMx
baseband solutions will enable Sensium Technologies to offer complete chip sets
to customers with unprecedented low power consumption while maintaining consumer
level pricing. The integration of Toumaz nanopower-low power wireless, ultra-low
power signal processing, sensors and power source into a single silicon package
will be the first true example of "ubiquitous silicon" and will play a central
role in the developing concept of "ubiquitous computing". Healthcare related
applications are everywhere, and the Sensium will be a vital platform technology
for each one.
On May 11, 2005 the Company announced that Bio-Nano Sensium Technologies had
filed for a patent on a new technology that will automatically bring imbedded
biosensors into conformance with international frequency and operating
requirements. Until now, patients with embedded or worn wireless biosensors had
difficulty traveling internationally. Frequency and operating regulations differ
from nation to nation, and the results of transmitting and receiving wireless
signals on a prohibited spectrum range fro irritation to fatal consequences for
the person using the biosensor. This technology will remove a significant
barrier to the widespread use of wireless devices for medical applications.
On May 31, 2005 the Company announced that Bio-Nano Sensium Technologies had
filed for a patent for it a simplified, more effective method for the
calibration of wireless biosensors. This technology can greatly reduce the cost
and complexity of programming wireless biosensors. Calibration is the procedure
that ensures the accuracy of a sensor's data output. This new process will
enable automatic biosensor calibration immediately upon insertion, eliminating
the expense and inconvenience of off-line calibration procedures.
On July 5, 2005 the Company announced that Bio-Nano Sensium Technologies will
deploy a limited beta test program of its wireless biosensor system. Under the
terms of the program, beta-stage versions of Bio-Nano Sensium (BNS) system will
be available to potential partners and customers for evaluation. The company's
beta program serves a dual purpose. For prospective customers, the program
offers the opportunity to evaluate a working model of the BNS system. For BNS
and Advance Nanotech partners and system integrators, the beta program provides
a working platform for obtaining configuration data, developing control and
calibration algorithms for bio-nano sensors, and optimizing wireless operating
protocols for specific applications. Full commercial deployment of the BNS
system is planned for the second quarter of 2006.
Market Opportunity
Intechno Consulting of Basle Switzerland forecasts that the worldwide
non-military sensor market will be $50.6 billion in 2008 with highest demand and
growth in motor vehicles, process industries and at the right price points, in
consumer applications. The report then goes on to say: "Sensors based on MEMS
technologies and smart sensors are at the focus of current sensor development.
MEMS technologies allow to miniaturize sensors and, at the same time, to
integrate their sensor elements with microelectronic functions in minimal space.
Only MEMS technologies make it possible to mass produce sensors more and more
cost-effectively while improving their functionality and miniaturizing them. The
greatest progress in innovation will happen when MEMS technologies overlap with
smart technologies. The main goal of smart sensor development is to improve the
reliability and durability of these sensors and make them more easily adaptable
to new functions and conditions during the operating phase. In addition to
self-diagnostic capabilities, smart sensors can have the functions of
self-calibration and self-adaptation." This is an excellent outline of the
functions of the "Sensium" as a smart MEMS based, adaptable (or reconfigurable)
sensor. The "Sensium" however has even greater functionality as a result of its
inherent wireless connectivity.
The strategy of Sensium Technologies is to apply the Sensium to the burgeoning
nanotechnology market in particular to the bio-nanotechnology segment where
nano-power driven electronic systems with wireless communication capability will
be ultra-important. The Sensium bionano application will provide the bridge for
integrating bio-nano systems with existing microsystems and other technologies
for technically and commercially feasible products. The resulting applications
would multiply with the expected growth of the bionanotechnology in the
pharmaceutical and medical devices industries.
Scientific Management
Professor Chris Toumazou - Chris Toumazou, PhD, FIEEE is a Professor of Circuit
Design in the Department of Electrical and Electronic Engineering, and Director
of the Institute of Biomedical Engineering at Imperial College, London, U.K. His
research interests include high frequency analogue integrated circuit design in
bipolar, CMOS and SiGe technology for RF electronics and low-power electronics
for biomedical applications. He has authored or co-authored some 300
publications in the field of analogue electronics and is a member of many
professional committees. Chris has seven patents in the field of RF and low
power electronics. Chris was the youngest Professor ever to be appointed at
Imperial College at the age of 33. He is co-winner of the IEE 1991 Rayleigh Best
Book Award for Analog IC Design: the Current-Mode Approach. He is also a
recipient of the 1992 IEEE CAS Outstanding Young Author Award for his work on
High Speed GaAs Op-amp Design. The IEEE is the main USA Electrical and
Electronic Engineering Society. In January 2000 Chris was elected to the
fellowship of the IEEE for contributions to current-mode analogue design. In
2003 Chris was invited to deliver the 2003 Royal Society Clifford Patterson
Prize Lecture entitled "The Bionic man" for which he received a 2003 Royal
Society Medal.
Owlstone Limited ("Owlstone")
ANL provided Owlstone with a $2million secured facility and entered into an
agreement with Messrs. Paul Boyle, Andrew Koehl and David Ruiz-Alonso ("the
founders") under which the founders assigned their intellectual property
concerning the Owlstone technology to Owlstone and were issued shares totaling
40% of the issued and outstanding shares capital of Owlstone. The facility was
provided to continue technological development of Owlstone's sensing product.
10
Owlstone was founded to commercialize miniaturized chemical detection technology
developed at the University of Cambridge. Using micro and nanotechnology
Owlstone will bring about a paradigm shift in the way chemical and explosive
threats are detected both at home and abroad. The technology will drive down the
cost and size of point detection systems and improve performance. Owlstone's
vision is to have detection systems in every train, financial institution,
government building, airport, stadium and any target at risk from chemical or
explosive attack.
On June 28, 2005 the Company announced that Dr. Ashley Wilks is leaving Smiths
Detection, a divison of Smiths Group PLC, to join Owlstone, where he will play a
key role in helping the company further advance the development of
nanofabricated threat detection technology. Prior to joining Owlstone Dr. Wilks
worked in research and development for Smiths Detection, the world's leading
provider of X-ray and trace detection equipment. At Smiths he worked with a team
of scientists and engineers developing and testing applications for the
detection of toxic gases. Before Smiths, Dr. Wilks was employed by UMIST
Department of Instrumentation and Analytical Science and APS/Berk
Pharmaceuticals.
Technology
Owlstone is shrinking the full functionality of chemical warfare agent detectors
using emerging nanofabrication techniques. Owlstone has adapted and extended
these techniques to overcome the theoretical limitations and practical
considerations that prevent conventional chemical detection products from being
made smaller. By first quarter 2006, Owlstone anticipate that they will be
generating production level volumes of miniature chemical sensors that can
quickly and accurately carry out trace analysis of chemical warfare agents. The
device is the size of a dime and costs 100 times less than the current
commercially successful products. It is a 'black box' system that can be
directly embedded into current systems to extend their range of capabilities. It
is small and inexpensive enough to be used in entirely new deployment scenarios.
It has the capability to be flexibly updated with emerging chemical threats. Its
generic detection capability will allow it to be used in a wide range of
additional detection applications such as a diagnostic breath analyser or an
exhaust emissions controller.
Market Opportunity
Homeland security is a major focus for governments across the globe. Recent
atrocities have highlighted a critical need to protect government and business
infrastructures, physical assets and the lives of millions against increasingly
unconventional acts of terrorism. There is a current and growing demand for
sensors to detect and hence protect against chemical and explosive threats. With
systems costing upwards of several thousand dollars each, it is not viable to
secure every government building and every train carriage. Nanotechnology is the
enabling technology that will allow us to drive down the cost and size of
integrated detection systems for widespread deployment. The chemical detection
market is large and diverse both in terms of applications and competitors.
Revenue forecasts for chemical warfare agent detectors have been upwardly
revised several times over the last few years to reflect the current
geopolitical climate and the emerging threat against unconventional targets.
Owlstone technology is inherently suited to the application as it builds upon
the most widely deployed detection technology in use by today's fighting forces.
The physical basis of operation is already embedded into commercially successful
products. The innovation lies in the combination of proven technology and the
exploitation of emerging nanofabrication techniques. Owlstone's devices will act
to displace existing systems as new deployment capabilities are exploited. It
will become possible to put an Owlstone sensor on the lapel of a soldier, in the
air vent of a government building or inside the carriage of a train. In-Stat MDR
and Frost and Sullivan report the market for next generation chemical and
biological sensors, including non-defense applications, will rise from $2.3bn in
2002 to nearly $4bn in 2007. Smiths Detection produce threat detection systems
for military and domestic security applications. They reported revenues of
(pound)150m in fiscal year 2003. An analysis that assumes Smiths maintain a
similar market share during the growth phase of the entire chemical detection
market yields an estimated market size of $635m in point detection. This is
based on the assumption that systems will be deployed in a conventional sense.
Owlstone sensors greatly expand the application opportunity horizon and the
associated possibilities will lead to new markets and revenues.
Scientific Management
Billy Boyle MEng - Billy Boyle read a Masters degree in Engineering at the
University of Cambridge where he spent three years as a Research Associate in
the University of Cambridge Microsystems group. He worked on a multidisciplinary
project with numerous industrial organizations and academic institutes to
develop Silicon-Opto Hybrids for use in next generation Telecoms networks.
Dr Jack Luo- Dr. Luo finished his B.Eng. at Harbin Institute of technology in
1982, M.Sc at Electro-Communication Uni. Tokyo, in 1986, and Ph.D. at Hokkaido
Uni. Sapporo in 1989. His specialty is in the area of semiconductor
process/product development, and device physics covering III-V compound devices,
Si high frequency MOS power devices and VLSI semiconductor devices. He has
published 55 papers, has 4 patents in power devices granted and 2 patents in
pending (in microsystems). His current research interests are in microsystems
and their applications in communication, biomedical and chemical, and in the
development of high performance power MOS devices.
NanoFED Limited
Field Emission Displays (FED) are new flat panel displays which offer a
replacement to bulky Cathode Ray Tube (CRT) displays. They operate in a similar
way to CRTs with phosphors excited by electrons travelling in a vacuum. The
difference is in the electron emitters. Instead of one gun spraying electrons,
FED use millions of microscopically small electron-emitting cathodes which are
matrix-addressed.
11
FED features:
o high brightness
o high efficiency
o a wide viewing angle
o fast response time for video viewing
o perfect color quality
FEDs capitalize on the well-established cathode-anode-phosphor technology built
into full-sized CRTs and use this in combination with the dot matrix cellular
construction of LCDs. Instead of using a single bulky tube, FEDs use tiny "mini
tubes" for each pixel. This allows to be approximately the same size as an LCD
screen. Since FEDs produce light only from the "on" pixels, power consumption is
dependent on the display content. This is an improvement over LCDs, where all
light is created by a backlight which is always on, regardless of the actual
image on the screen. The LCD's backlight itself is a problem the FED doesn't
have. Light from the backlight of an LCD passes through to the front of the
display, through the liquid crystal matrix. It's transmissive, and the distance
of the backlight to the front contributes to the narrow viewing angle. By
contrast, an FED generates light from the front of the pixel, so the viewing
angle is excellent, 160 degrees both vertically and horizontally.
Technology
Next generation semiconductor devices will become increasingly dependent upon
nanoparticle systems, in addition to new methods for their fabrication that
depart from conventional foundry-based waferstyle and thin film processing.
Techniques such as electrodeposition, inkjet printing and fluidic assembly have
already been identified as tools for assembling nanostructured materials. The
advantages of nanoparticle-based device structures as compared with existing
semiconductors are not only the reduced material and fabrication costs but also
the ability to assemble them onto a much wider range of substrate materials.
Single crystal diamond materials are now available commercially as nano-powders
and are used extensively as abrasives and to reinforce polymers. However, these
materials have not hitherto been considered as a possible starting material for
forming semiconducting diamond thin films for use in FEDs.
NanoFED is producing an FED containing n-type nanodiamond. The lower fabrication
cost and greatly increased performance of these devices will have a very
significant impact upon the cost and performance of the next generation of
electronic and opto electronic devices.
Market Opportunity
Low voltage flat panel displays have a very wide range of potential applications
including displays in cars and mobile phones, to high resolution computer and
television screens for medical and military uses. The device applicatory of the
displays providing potential access to high volume/low margin consumer and low
volume/high margin market segments. Furthermore, improved backlighting for LCD
(which do not otherwise emit light) based upon field emission display technology
would significantly increase the performance of existing devices, opening up
further market opportunities. The market size for flat-screen displays is
projected to rise from $55bn in 2004 to $145bn in 2012
Scientific Management
Dr Neil Fox - Dr. Fox holds a Senior Research Fellowship in Physics and
Chemistry at the University of Bristol. He participated in a succession of
research and development projects on new display technologies at Smiths
Aerospace during the period 1991-2003. He was seconded to University of Bristol
as an Industrial Fellow of the 1851 Royal Commission during 1995-8, and has
since maintained this association - bringing particular research expertise in
the area of electron field emitter structures and their fabrication. He is
currently leading a three year (pound)2m DTI- OSDA project AEROFED (involving,
at its outset, the Universities of Bristol, and Bath, Brimar Ltd and Smiths
Industries Aerospace), with the goal of producing a field emission device
incorporating novel materials for the athode technology, such as conducting zinc
oxide and nanodiamond.
Nano Electronics Limited
Nano Electronics is applying its leading expertise in the production of
functional oxide nano tubes to develop new approaches to emerging market
technologies such as Ferroelectric Random Access Memory (FeRAM), for use in
cellular phones and mobile devices, and micro-fluidics for such applications as
drug delivery and ink jet printing heads. FeRAM represents a new paradigm in
memory technologies. Using ferroelectric materials, FeRAM combines the
high-speed and endurance of widely used dynamic and static random access
memories with the ability to store information in the absence of power. The
advantages of FeRAM compared to NOR- flash memory devices include SRAM like fast
read and program response times, low power consumption and an immense number of
non-volatile read and write cycles. This makes the technology well-suited for
use in applications as diverse as game consoles, cellular phones, mobile
products and IC cards.
12
Technology
Nano Electronics has developed a method of manufacturing fully ordered arrays of
functional oxide nano tubes either embedded in semiconductor grade Si or as a
free-standing array of discreet nano tubes. Tube dimensions are typically 400 nm
to several microns in diameter, 100 microns in length, and have a wall thickness
of less than 100 nm. Unlike other nano tubes, e.g. carbon or polymer nano tubes,
these materials are electrically insulating oxides which display a number of
useful properties including ferro-, piezo- and pyro-electricity. This makes them
suitable for a number of micro-electronic and microelectromechanical-machine
(MEM) applications, particularly data memory and micro-fluidics.
BioStorage Limited
Over the last few decades, the demand for data-storage has risen exponentially,
mainly owing to increases in scientific and socio-economic data collection, and
more recently the advent of the Internet and an explosion in consumer multimedia
technology. So far, this dramatic increase in datastorage requirements has been
met mostly by improvements of the existing technologies, i.e. by enhancing data
storage densities, access times and data rates. Currently, improvements in these
conventional storage media can keep track with the increased storage needs, but
will hit fundamental limits to further expansion in the near future. There is
considerable interest in alternative storage media with ultra-high storage
densities, but no practical solution has yet been found.
Technology
BioStorage is developing a novel, highdensity data-storage device. The
technology is based on the concept of storing data in intensity levels of
fluorophores. The read/write mechanisms are optical, allowing established
visible-laser diodes to be used, but the fundamental density limit intrinsic to
visible light based read/write mechanisms owing to diffraction is by-passed.
Biostorage aims to fabricate datastorage devices with larger densities in excess
of conventional optical and magnetic devices. One of the biggest limitations of
current technologies is their restriction in storing information in only two
dimensions. BioStorage's technology will potentially offer the great advantage
of extending into the vertical third dimension.
Cambridge Nanotechnology Limited
Flexible displays promise to enable new markets for the display industry. Such a
display could, for example, be used to create a fully updatable newspaper which
could rolled up into a coat pocket. Flexible displays could also be used to
create new cellular phones and other easily collapsible consume devices. The
technical challenge thus far has been to translate the quality of picture
experienced with liquid crystal displays into a flexible environment. Indium Tin
Oxide (ITO) is the best available transparent conducting oxide (TCO). ITO on
glass is a key material in the display industry and results in the rigid and
inflexible displays common to most devices. There is a strong push towards
flexible displays using polymer substrates. This requires a flexible transparent
conductor. ITO fails this because it is brittle above 2% strain, whereas polymer
substrates can be bent over. Developing such a composite is the only remaining
barrier to the wide-spread commercialization of flexible displays.
Technology
Cambridge Nanotechnology is developing a flexible, transparent conducting
composite. The Cambridge Nanotechnology composite will have a surface
conductance of 30 ohm/sq and 90% transmission, making the composite similar in
performance to Indium Tin Oxide, the industry standard commonly used in flat,
fixed displays such as liquid crystal and organic light emitting diode displays.
NanoOptics Limited
Optical switching plays a major role in modern fiber-optic telecommunications
systems. They are essential in optical add/drop, cross connect, and ring
protection applications. Fiber-optic networks have dramatically accelerated the
transmission of data on the Internet. But transmitting information from one
high-speed network to another involves passing through slower, electronic
switches and routers. Electronics do not afford the same speed of information
conveyance that optics (light) do, and that gives rise to what has become
referred to as the electronics bottleneck on the Internet. NanoOptics is using
carbon nano tubes to make devices where light can switch with light, eliminating
the need to go back and forth between light and electrons. You are always in the
optical mode of the network. While today's electronic switches can perform ten
billion operations per second, future optic switches may be able to relay a
trillion operations per second.
Technology
NanoOptics is developing a fast optical switch, for use in optical fibers and in
silicon-based optoelectronics, such as telecommunications equipment. It is
intended that the NanoOptics optical switch/modulator will offer far superior
performance to existing products. NanoOptics aim for their devices to offer sub
~1 ps switching capabilities.
NanoLabs Limited
Today's diagnostic tools for medical or sensing applications, for example
genotyping or detection of harmful substances, are increasingly dominated by
array-based tools. The feature size of these array based tools has been
shrinking over the last decade to allow for smaller sample volumes to be tested,
as well as for doing more tests concurrently owing to the greater feature
density. However, current technologies will hit fundamental limitations in both
their fabrication as well as their readout process in the near future, and thus
alternative technologies for array-based diagnostics and sensing tools have
generated considerable interest. To date no practical solution has yet been
found. Genetic screening, when deployed carefully, offers the potential to
detect diseases before they become manifest and so offers a greater chance of
treatment successful. Not only does this result in improved patient health, but
the associated treatment costs are reduced. Genetic screening offers diagnosis
capabilities throughout the lifecycle. As a greater proportion of the U.S.
population lives beyond 85 years of age, interest in genetic testing for
end-of-life conditions such as Alzheimer Disease (AD) continues to grow.
13
Technology
The Nanolabs sensor will be similar to a computer chip but imbedded with DNA
molecules instead of electronic circuitry. It is designed to probe a biological
sample for genetic information that indicates whether the person has a genetic
predisposition for certain diseases or conditions. In addition the Nanolabs
sensor is suitable for medical diagnostics, and advanced biosensing. Core to the
Nanolabs sensor is a high-density functionalized DNA array with integrated
readout technology. Nanolabs is also developing a new method of fabrication. The
fabrication of existing arrays is based on either jet-print technology or
optical lithography. Both technologies are limited to feature sizes of several
um; 20 um for lithography and 130 um for printing. Nanolabs technology is based
on its patented concept of electrochemically controlling the array pattering,
with a spatial resolution of better than 25nm. This technology enables the
fabrication of arrays with feature densities of at least two orders of magnitude
higher than current technologies. Higher feature density, thus smaller features,
has the advantage of more probing points per unit area and also substantially
reduces the amount of sample required, which is of importance, especially when
sample volume is limited.
Advanced Proteomics Limited
Genes do not actually do anything themselves. They hold instructions for making
proteins, and it's the proteins that actually perform functions in our bodies.
Proteomics is the study of proteins, particularly their structures and
functions. This term was coined to make an analogy with genomics, and is often
viewed as the "next step". However proteomics is much more complicated than
genomics. While the genome is a rather constant entity, the proteome is changing
through its biochemical interactions with the genome. One organism will have
radically different protein expression in different parts of its body and in
different stages of its life cycle. Understanding proteins could lead to new
advances in medicine and, theoretically, ways to enhance the bodies we are born
with. With completion of a rough draft of the human genome, many researchers are
now looking at how genes and proteins interact to form other proteins. A
surprising finding of the Human Genome Project is that there are far fewer genes
that code for proteins in the human genome than there are proteins in the human
proteome (~33,000 genes vs ~200,000 proteins).
Technology
Following the so-called 'genomics revolution' it has become clear that a similar
approach to measuring all of the proteins in a cell, along with their functional
state, localization and time dependent changes will yield considerable insight
into biological processes. Advanced Proteomics is developing a 'toolkit' of
nanoparticles based reagents that can be used in proteomics. Proteomics is an
enabling science for drug discovery, diagnostics markets and life sciences
research. The worldwide proteomics market is projected to grow to more than
$2.5bn by 2008 with a compound annual growth rate (CAGR) of more than 14% for
the next five years, with some areas showing substantially greater growth rates
(Select Biosciences report, October 2003). The Advanced Proteomics 'toolkit'
will offer opportunities across the spectrum of the proteomics market, closing
crucial gaps where existing methods are insufficient. It will provide a powerful
technology for the development of future applications in this market.
Intelligent BioSenors Limited
There are many aspects of brain activity that can be monitored using electrodes
on the scalp, and is a technique that is performed routinely for a variety of
conditions such as epilepsy. There is an immense improvement in signal quality
if the electrodes are placed subdurally and directly on the cortex of the brain,
which is normally carried out during surgery. However, there are some immediate
improvements that can be made to the external scalp and the internal subdural
electrodes. It is common practice to have 32 or more external electrodes in the
scalp EEG, requiring bulky wires and connection boxes. This causes difficulties
and distress for the patient who would typically have to wear the system for 24
hours.
Technology
Intelligent BioSensors is investigating the development of low-power arrays for
next-generation EEG (electroencelography) monitoring of epilepsy, using
expertise in nano-powered electronic systems. These new systems may pave the way
for greater mobility of the patient undergoing EEG monitoring using scalp
electrodes, better detection of EEG signals from the brain cortex, and allow
fully-implantable systems to help prevent seizures while patients go about their
daily lives away from the hospital environment. The electronic interface being
developed could be used for other brain implants and for the treatment of other
neurological disorders.
NanoVindex Limited
Nanotechnologies have already begun to change the scale and methods of drug
delivery and hold huge potential for future developments in this area.
Nanotechnology can provide new formulations and routes for drug delivery that
broaden their therapeutic potential enormously by allowing the delivery of new
types of medicine to previously inaccessible sites in the body. Novel composites
incorporating nanoparticles are particularly exciting for these applications. A
key to gaining competitiveness within the market is to develop next generation
composites which are extremely sensitive to a variety of environmental stimuli.
NanoVindex aims to achieve this by utilizing expertise in rational peptide
design to incorporate specific pH, enzymes and temperature triggers within the
composites enabling a new level of control over the release of encapsulated
drugs.
14
Technology
NanoVindex is seeking to develop a platform technology of nanoparticle-hydrogel
composites for tailored drug delivery applications. The development shall
leverage the research of Imperial College London in rational design of
self-assembling peptide systems, control over the nanoscale organic/inorganic
interface, and physiologically responsive bio-nano materials. Revenues to drug
delivery companies were $1.3bn in 2002 and projected to increase to $6.7bn by
2012. With the focus evermore on emerging nanotechnologies and the improvements
these may offer over more conventional systems, the market for new
nanotechnologies in drug delivery is poised to be a multi-billion dollar arena.
These technologies have the potential to revolutionize the pharmaceutical
industry.
Nano Diagnostics Limited
Strokes are the third leading cause of death in most developed countries, as
well as a leading cause of long term disability. Healthcare providers are
recognizing the critical nature of the first few hours after the onset of a
stroke. Thrombolytic therapy can be beneficial to patients suffering from
ischaemic strokes but may have catastrophic consequences for patients with
haemorrhagic stroke. There is therefore a need to differentiate between
ischaemic and haemorrhagic stroke at the earliest possible time. Currently X-ray
CT or magnetic resonance imaging is used for diagnosis but require the patient
to reach a hospital facility delaying the imperative diagnosis.
Technology
Nano Diagnostics is developing a portable, low cost microwave system for
detecting haemorrhagic events within the brain. The final system will include
microwave hardware and algorithms that will detect the presence of intracranial
haemorrhage. The technology will also incorporate wireless transmission
technology so that paramedic staff may transmit diagnostic information to the
hospital where the clinical decision regarding the administration of
thrombolytic drugs could be made at the earliest opportunity.
Visus Nanotech Limited
The United Nations estimates the global aggregated costs of blindness to the
world economy at $25billion with approximately 28 million individuals suffering
from blindness. Visus Nanotech is developing a device that will offer a new
paradigm approach for treating blind people worldwide - people who currently
have no hope to see.
Technology
In many forms of blindness there is a pathogical loss of the specialized light
sensitive photoreceptors, however even in very advanced cases the output
neurones that project to the visual areas of the brain remain intact and
functional. We are endeavoring to develop a proprietary technology for retinal
prostheses, combining expertise in ultra-low power imaging systems and molecular
medicine. Our research is investigating the possibility of using optically
active nanospheres to stimulate electrical responses in nerve cells. Unlike
other prosthetic retina proposals, this device will make use of the intelligent
circuitry that exists in the human retina. Visus Nanotech's production of an
optically coupled retinal prosthetic device could represent a paradigm shift in
the potential restoration of functional vision in a large population of the
blind.
Econanotech Limited
The composites industry (suppliers, original equipment manufacturers (OEM) as
well as end users) is confronted with a major challenge in the coming years: How
to deal with production and end-of-life waste? So far, end-of-life composite
waste has generally been regarded as nonrecyclable. Landfill, that at present
disposes of 98% of composite waste, will be banned (or become cost prohibitive)
through new European waste legislation from 2005 onwards in most European Union
states; options for waste incineration are limited due to the energy content of
the material. The European Union (EU) end-of-life vehicles directive, applying
to all passenger cars and light commercial motor vehicles, will only allow a 5%
incineration quota for disused cars. These trends particularly concern composite
materials, since economically feasible recycling is relatively difficult to
achieve. Furthermore, simply using more environmentally friendly, natural fibres
as reinforcements for polymers (including polyolefins), will not be deemed
sufficient by future European legislators. Another EU legislation, the Waste
Electrical and Electronic Equipment (WEEE) Directive (2002/96/EC) affects the
electronics industry but also composite and polymer manufacturers. The WEEE
forces the producers of electrical and electronic equipment to provide for
recycling of their products. Large quantities of this waste, such as printed
circuit boards (reinforced bakelite or epoxy resins), are made of polymers or
polymer composites. As a result of this new legislation, both manufacturers and
end-users will need to move away from traditional materials and will require new
strategies for environmentally and economically viable materials.
15
Technology
econanotech is seeking to develop the first-ever renewable hierarchical
nanocomposites made completely from biological sources. econanotech expects
truly green composites with much improved compression strength and interfacial
shear strength. The advantages of such a material are the low cost of its
precursors and processing as well as lightweight and low toxicity. This
technology could have a tremendous impact in the automotive, transport, home and
building and consumer packaged goods markets.
Nano Composites Limited
There is enormous interest in nanocomposites for a wide range of functional
applications ranging from automotive components, to food packaging, and
biomedical implants. Recently particular attention has been paid to the
potential of carbon nano tubes to enhance the properties of polymers. Although
carbon nano tubes are remarkable, other, inorganic nano tubes are just beginning
to attract attention. The basic properties of plastics are frequently enhanced
with a wide range of inorganic fillers, such as calcium carbonate, silica,
clays, carbon blacks, and titania to name a few. Such materials are used on a
massive scale; for example, annual production of carbon black is around 9m
tonnes, whilst $2billon worth of titania is used in the polymer industry alone.
In many ways, such applications represent the earliest examples of
nanotechnology, pre-dating the term itself. Recently, however, new high-tech
nanocomposites have appeared based on nanoclays and carbon nano tubes. The
interest in nanocomposites has been driven by the development of new syntheses
and processing techniques that produce well-defined nanoparticles. Such
particles have valuable intrinsic properties as a result of their small size,
and can influence the behaviour of the matrix around them due to their surface
area. Individual carbon nano tubes have been shown to have axial stiffness
similar to that of diamond, and the highest strength of any known material; they
also provide electrical conductivity, have very high thermal conductivity, and
can survive extreme distortions. Such properties have stimulated a race to
create nanocomposites which incorporate carbon nano tubes. However, the
recognition of carbon nano tubes suggests that other, inorganic nano tubes will
provide rich possibilities.
Technology
We are aiming to develop synthesis and processing techniques for titanium oxide
nanotube and nanorod composites. Titania nanocomposites could have excellent and
unique potential, yielding major performance improvements in commercially
relevant systems. The performance improvements could include lighter weight,
longer life span/service life, increased resistance to corrosion, reduced need
for lubricants, and increased temperature resistance. Improved nanocomposites
based on titania nanotubes could have wide-ranging applications in the
automotive, aerospace, construction, medical, and oil/oil servicing industries
The technology will be easily translated into devices for use as, for example:
All white, 'nanofibre'-reinforced polymer, fibres and polymer cements for dental
applications; Nanotube-reinforced, insulating polymer foams for printed circuit
board applications, allowing foaming of otherwise unprocessible high temperature
systems; Biocompatible/bioactive reinforcement for tissue scaffolds with
potential for drug delivery; Unidirectionally oriented nano tubereinforced
polymer films as UV-polarizers.
Intelligent Materials Limited
Separation technologies play a hidden but vital role in manufacturing. Many
common products are processed using materials or chemicals that are purified
with separation technologies, such as heat distillation to burn off gases, and,
in recent years, membranes that function like sieves or filters. Examples of
products that rely on separations include the purified solvents and feedstocks
used to make semiconductor wafers and pharmaceuticals made from reactions
involving purified specialty chemicals. The quality of the separation influences
product purity as well as the environmental impact of the manufacturing process.
Driven by global competition and pollution prevention targets, manufacturers are
seeking new process technologies, including separations, as a means of enhancing
product performance, reducing costs, and eliminating pollution at the source.
Traditional separation methods have been optimized to the limit, yet cannot
achieve the purity or efficiency levels needed to make many emerging products.
The chemical process industry typically relies on distillation, which entails
high energy costs and is not suitable for many specialty chemicals applications.
Similarly, the biochemical process industry needs new separation methods for
making ultrapure chemical intermediates, alternative fuels from renewable
resources, biodegradable packaging, and other products. Breakthrough separations
platforms are needed that can rapidly, reliably, and cost effectively make fine
distinctions among similar molecules, thereby enabling either the separation of
materials with similar physical properties or the concentration and removal of
impurities from dilute industrial process streams. To achieve industry
acceptance, the new technologies also need to offer significant cost savings
through the elimination of waste or by-products,
Technology
Intelligent Materials is working to develop a molecular-selective membrane.
Existing selective membranes use zeolites and similar. These have holes of
desired size, but the holes are not straight. Thus the molecular diffusion rates
through these sieves are slow and inefficient. Intelligent Materials is
developing a structurally consistent membrane, resulting in a customizable
membrane for a specific application with superior performance. Users of
specialty-separation and high-volume separation methods together represent
approximately $1.2trillion in product shipments. Approximately 50 U.S. companies
are involved in the $2.5billion worldwide market for membrane materials and
modules. There are multiple uses for membranes, in water desalination, and in
petroleum refining, where 10 percent of petroleum is used to supply the energy
for distillation and fractionation. New industries could be created around novel
or improved products, such as food additives, specialty plastics, non-toxic
antifreeze, and low-cost composites. The membrane technologies also could be
exported for use in both industrial and consumer applications and the
$150billion worldwide market for water-and air-pollution control technologies.
16
Inovus Materials Limited
Inovus is using carbon nanotubes for novel applications in liquid crystal
displays and holography.
Carbon nano tubes, long, thin cylinders of carbon, were discovered in 1991.They
are large macromolecules that are unique for their size, shape, and remarkable
physical properties. Nano tubes are on the order of only a few nanometers wide
(one ten-thousandth the width of a human hair), and their length can be millions
of times greater than their width. They can be thought of as a sheet of graphite
(a hexagonal lattice of carbon) rolled into a cylinder. Just a nanometer across,
the cylinder can be tens of microns long, and each end is "capped" with half of
a fullerene molecule. Single-wall nano tubes can be thought of as the
fundamental cylindrical structure, and these form the building blocks of both
multi-wall nano tubes and the ordered arrays of singlewall nano tubes called
ropes. These intriguing structures have sparked much excitement in the recent
years and a large amount of research has been dedicated to their understanding.
Nano tubes have a very broad range of electronic, thermal, and structural
properties that change depending on the different kinds of nano tube (defined by
its diameter, length, and chirality, or twist). Besides having a single
cylindrical wall (SWNTs), nano tubes can have multiple walls MWNTs) - cylinders
inside the other cylinders. Carbon nanotubes are an example of true
nanotechnology: only a nanometer in diameter, but molecules that can be
manipulated chemically and physically. They open incredible applications in
materials, electronics, chemical processing and energy management.
Technology
Inovus Materials is exploiting the benefits of carbon nano tubes to greatly
improve the viewing experience of liquid crystal displays and for new
applications in holography. Liquid Crystal (LC) Displays act by rotating the
polarization of light by using liquid crystals. However, their contrast ratio
could be improved. Inovus is using CNTs to increased the contrast and lower
drive voltage to greatly improve the viewing experience of liquid crystal
displays.
The light-induced photorefractive coefficient is defined as the small,
self-induced change in refractive index due to the electrical field of light
passing through it polarizing its atoms or molecules. It gives rise to an
optical non-linearity. The coefficient is usually extremely small because the
electrical field associated with light, except in a very intense laser beam, is
very small compared to that needed to move atoms about. However, a special type
of liquid crystals, orientational photo-refractive liquid crystals, have a
10,000 times higher light-induced photorefractive coefficient. This is because
molecules in the LC are more susceptible to orientation. Inovus Materials is
developing supranonlinearities for a range of new applications, such as
holography, optical storage and image processing, as lowcost alternatives to
conventional liquidcrystal spatial light modulators. These are highly promising
materials for novel optically addressed spatial light modulators (OASLMs) based
on photorefractive orientational effects.
Exiguus Technologies Limited
Electronic devices that the semiconductor industry believes it will be building
in the near future are too small to be built using standard lithography
techniques. Considering, for more than 30 years, the economics of the
semiconductor industry has been centered around Moore's Law, the idea that the
number of transistors on a chip will double every 18 months, research teams and
commercial firms are driven to find betters ways of making nanodevices.
Nanoelectronics encompass both new silicon-based manufacturing processes and
entirely new approaches involving nano tubes, nanowires, polymers and organic
molecules. The potential revenues from new electronics manufacturing and
materials processes are huge, as they must be widely adopted by the
semiconductor industry if it is to continue on the same growth path. Researchers
today are looking at carbon-based compounds for new and simpler ways to make
integrated circuits, often called "organic" or "plastic" transistors. Research
into organic transistors may lead to new uses of these promising devices. What
could organic transistors be used for? Lightweight and flexible plastic chips
could usher in new generations of smart cards, toys, appliances, and many other
things that might not be physically or commercially viable using today's
silicon-based technology. In addition to being highly flexible and lightweight,
plastic transistors hold the promise of tremendously reducing production costs.
Technology
Exiguus is attempting to develop organic molecules to potentially overtake
amorphous silicon as the basis of the display industry. Chip makers are looking
for ways to make electronic devices out of cheap plastic instead of expensive
silicon. Successful development could lead to a new market for flexible displays
and memories capable of being printed on anything, ushering in an age of
disposable computing.
Microfluidics is the science of designing, manufacturing, and formulating
devices and processes that deal with volumes of fluid on the order of nanoliters
or picoliters. The devices themselves have dimensions ranging from millimeters
down to micrometers. Microfluidics hardware requires construction and design
that differs from macroscale hardware. It is not generally possible to scale
conventional devices down and then expect them to work in microfluidics
applications. When the dimensions of a device or system reach a certain size as
the scale becomes smaller, the particles of fluid, or particles suspended in the
fluid, become comparable in size with the apparatus itself. This dramatically
alters system behavior. Capillary action changes the way in which fluids pass
through microscale-diameter tubes, as compared with macroscale channels.
Microfluidic systems have diverse and widespread potential applications. Some
examples of systems and processes which could use micro fluidics include inkjet
printers, blood-cell-separation equipment, biochemical assays, chemical
synthesis, genetic analysis, drug screening, electrochromatography, surface
micromachining, laser ablation, and mechanical micromilling.
17
Technology
For microfluidics, 'lab-on-chip' applications, Exiguus is developing materials
which allow the transport of liquids cleanly and without friction. Exiguus is
tailoring the properties of the CNT/superhydrophobic coatings, in the production
of microfluidic components such as one-way valves and muscle-vein pumps.
Centre for Advanced Photonics and Electronics (University of Cambridge)
On March 11, 2005 Advance Nanotech signed a strategic partnership with the new
Centre for Advanced Photonics and Electronics (CAPE) at the University of
Cambridge. Advance Nanotech joined Alps Electric Company Limited, Dow Corning
Corporation and Marconi Corporation plc with leading researchers in the
Electrical Engineering Division of the Department of Engineering at the
University of Cambridge. CAPE is intended to house the Electrical Division of
the engineering department at the University, comprising over 22 academics, 70
post-doctoral researchers and over 170 researchers. Members of this Division
publish more than 100 papers each year and in the recent past approximately 70
patents have been filed and 10 spin-out companies have been formed.
Substantial grants from the Higher Education Funding Council for England (HEFCE)
through its Science Research Investment Fund (SRIF) are supporting the
construction of a purpose-built CAPE building on the University's growing
science and technology campus at West Cambridge. Construction of the new
building is underway and scheduled for completion in early 2006.
Advance Nanotech, as a Strategic Partner to CAPE, will provide additional and
innovative commercialization opportunities for the technologies developed in the
centre, with a particular emphasis on nanotechnology. In addition the Strategic
Partners, together with the University of Cambridge, nominate representatives to
the Steering Committee which is responsible for the overall research objectives
of CAPE, its areas of technical focus and arising intellectual property
arrangements. Advance Nanotech has committed $4.95 million over five years for
the funding of specific projects within CAPE, which may include jointly-funded
collaborations with the other Strategic Partners.
COMPANY STATUS
The Company has completed certain initial investments and has commenced
developing its product portfolio. The Company is actively looking for additional
opportunities and continues to assess many technologies. We have continued to
incur losses as expected during this emerging stage. We anticipate that the
success of our immediate product development strategy will permit us to further
develop our other products and potential products currently in our portfolio. A
major element of the Company's product strategy is to collaborate with
Universities to research and develop new technologies as the first-step in new
product commercialization. The Company believes that maintaining a limited
infrastructure will enable it to develop products efficiently and cost
effectively. However consideration will be given to opportunities to strengthen
the resources and portfolio in certain areas that may prove viable commercially
and add value to the overall business in the future.
The reader should consider the likelihood of our future success to be highly
speculative in light of our limited operating history, as well as the limited
resources, problems, expenses, risks and complications frequently encountered by
similarly situated companies. To address these risks, we must, among other
things:
o increase our product portfolio by acquisition or collaborations with
Universities;
o enter into corporate partnerships;
o license additional technology;
o maintain a proprietary position in our technologies and products; and
o attract and retain key personnel.
The Company may not be successful in addressing these risks. If we are unable to
do so, our business prospects, financial condition and results of operations
would be materially adversely affected. The likelihood of our success must be
considered in light of the high-risk nature of technology based research and
product development, and the competitive and regulatory environment in which we
operate.
RESULTS OF OPERATIONS
During the quarter ended June 30, 2005, the Company worked to further the
development of licensed product candidates and on researching further license
opportunities. General and Administration expenses were incurred primarily for
consulting fees for accounting, regulatory, licensing and patent advice.
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules 13a-15 (e) and
15d-15 (e) under the Securities Exchange Act of 1934, as amended). Based on this
evaluation, the Company's Chief Executive Officer and Financial Officer
concluded that the Company's disclosure controls and procedures were effective
in ensuring that (i) information required to be disclosed in the reports that
the Company files or submits under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission and (ii) information required to be disclosed in the reports the
Company files or submits under the Securities Exchange Act of 1934, as amended,
is accumulated and communicated to management, including the Company's Chief
Executive Officer and Chief Financial Officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.
18
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no significant changes in the Company's internal controls over
financial reporting that occurred during the period from inception (August 17,
2004) to June 30, 2005, that have materially affected, or are reasonably likely
to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
--------------------------------------------------------------------------------
31.1 Certification of CFO Pursuant to Securities Exchange Act Rules
13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32 Certification of CEO Pursuant to Securities Exchange Act Rules
13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
1) 2005-04-15 8-K
19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned.
/s/ Magnus Gittins
------------------------
Magnus Gittins
Chief Executive Officer
Date: August xx, 2005
Dates Referenced Herein and Documents Incorporated by Reference
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