Nano-Proprietary’s breach of contract suit against Canon likely w...

seen Canon suffer a series of losses. In Feb., U.S. Dist. Judge Samuel Sparks ruled that Nano-Proprietary could terminate its SED licensing pact with Canon (CED Feb 26 p1), finding Canon engaged in “material and substantial” breach of contract. The contract barred Canon from sublicensing the SED technology, and it improperly transferred rights to Toshiba in forming the SED Inc. joint venture, Sparks said. In 2006 the Canon suit cost Nano-Proprietary $494,120, up from $172,816 a year earlier, it said. Nano-Proprietary also incurred $1.4 million in legal expenses in connection with a suit involving inventor Till Keesmann, who licensed his carbon nanotube technology to the company. A federal judge in Feb. issued a preliminary injunction barring Keesmann from ending his 7-year-old licensing agreement with Nano-Proprietary (CED Feb 20 p7). The injunction took effect when Nano-Proprietary posted a $100,000 bond this month, the company said. Nano-Proprietary had recorded $1.1 million in deferred legal fees related to the Keesmann litigation Dec. 31, it said. Meanwhile, Nano- Proprietary forecasts 2007 revenue of $5 million and said it could see positive cash flow with revenue of $6.5 million, the 10K stated. Nano-Proprietary projected a minimum of $2.9 million in revenue from government contracts in 2007 and an additional $1.7 million from “contracts currently in process,” the 10K stated. Nano-Proprietary also projected $4.1 million in 2007 research costs, and it will need $6.5 million cash. Nano- Proprietary’s Q4 net loss declined to $1.48 million, from $1.56 million, as revenue rose to $625,636 from $162,384. For the year, Nano-Proprietary’s net loss grew to $6.6 million from $5.8 million as revenue jumped to $1.1 million from $565,660. Revenue was bolstered by sales to Yonex ($248,454) and Shimane Masuda Electronics ($100,485), the latter down from $109,970 in 2005, the 10-K said. Nano- Proprietary had been working with Shimane on carbon nanotube lighting devices since 2004. It developed a proof of concept using carbon nanotubes as an LCD backlight and signed a distribution agreement for Japan with Mitsui. Yonex used carbon nanotube technology to develop its Nanospeed tennis racket. Nano-Proprietary benefited in 2006 from a $1 million sale of IP related to former subsidiary Electronic Billboard Technology to Novus Communications Technologies. New CEO Thomas Bijou, who joined the company in Dec., got a $24,000 salary for his month on the job, plus options for 663,442 shares. Bijou’s base salary for 2007 in $288,000. Former CEO R.D. Burck, who left the company in Nov. after 6 months in the job, was paid $145,833. Former CEO Marc Eller, replaced by Burck but still chmn., got $125,000 and options for 135,989 shares. Eller also got a $30,000 payment March 1 for consulting services, the 10K said.