The following interview is with Daniel Stolyarov, co-CEO and Elena Polyakova, co-CEO of Graphene 3D Lab Inc. (TSX: V.GGG, OTCQB: GPHBF, Forum).
Q. Current Business Model. Could you please share with us and your shareholders what Graphene 3D Lab is currently working on?
A. In general, Graphene 3D Lab is dedicated to research and development and commercialization of graphene and other advanced materials. Our goal is to change the world by making materials with unique properties that outperform the materials being used so far. The list of such materials is long and includes, graphene in a variety of forms for research purposes, advanced composite materials improved with graphene, materials for 3D printing, graphene-based materials for thermal management. We have added a line of fine chemicals under the ChemApproach project recently.
The formulations for these materials as well as technologies related to their application are covered by number of patent applications the company submitted over years that constitutes the IP portfolio of the company. To extract the value from this IP, we can either use this IP to create the products and provide our customers with solutions or we can partner with large industrial partners to speed up the technology commercialization. To facilitate this transition and find industrial partners, we established several e-commerce platforms, i.e. the web stores, where our potential partners can order samples of our products and become familiar with the technology. Graphene Supermarket is the oldest of our web stores, where we are offering a variety of graphene related products. We also have blackmagic3D.com web site for 3D printing materials, G6-epoxy for our epoxy products. Recently, we added ChemApproach,com as a platform for fine chemical products. Our recent Technology Transfer Agreement that we executed with a global pharma manufacturer, where the company will receive $200,000 for the assistance in setting up a technological process, is a vivid example that this business model works.
Q. New Facility. You recently moved your operations to a new facility. Can you please explain us the benefits of moving the company? How does the move affect your normal operations? Do you anticipate any delays in manufacturing of your product line?
A. Yes, we announced our facility move in November 2017 and by March 2018 we completed the move. Our new 8,000 sq. ft. facility is in an industrial location in Ronkonkoma, approximately 30 miles from our old place. The space limitation of our former facility hindered the Company growth. The new facility is better suited for industrial manufacturing and has the capacity to accommodate the increased demand of our advanced materials.
To resume our operation in full swing in the new Ronkonkoma facility, we needed to uninstall our R&D and production equipment in our former facility and install them in our new place. This apparently caused the disruption of our normal operation. To avoid the delays in completing the orders in anticipation of the move, we produced more products and overstocked the inventory months prior the move.
Q. Grant from the State of New York. You recently received a recognition and grant from the State of New York. What positive changes has it brought to the Company?
A. Earlier in 2017, Graphene Laboratories, our wholly owned subsidiary was included in the strategic plan for economic development and growth within the region under Long Island Regional Economic Development (“LIREDC”). We received a $500,000 grant in December 2017 from the LIREDC supported by the State of New York. This grant was to specifically help finance the renovation of the Company’s new facility in Ronkonkoma and also acquisition of new equipment for the facility to expand our manufacturing capabilities.
Q. Treasury and Cash flow. What is the current cash situation in the company?
A. Last year we received the TSX Venture Exchange approval to reprice 11,081,350 warrants to $0.12 as we decided to accelerate warrants to achieve positive cash flow in the Company. Resulting that, we received a gross proceed of $1.2 million dollars in warrant proceeds from the exercise of 10,383,010 warrants. This helped us starting the year with solid cash position.
Q. Pharma Deal. The Company announced recently signing an agreement with one of the global pharma manufacturers. Can you tell us more about this deal? How does graphene relate to this deal?
A. You are absolutely correct. We have signed a Technology Transfer Agreement (TTA) with one of the big manufacturers of pharmaceutical chemicals. We have a technology of producing a certain compound that is further used in making so called Active Pharmaceutical Ingredient, i.e. active chemical in the drug. Our business partner will be making this API for further testing.
The company owns IP rights on this technology. We will help our business partner to adopt our technology at one of their manufacturing facility in Europe. Under the TTA, we will issue the limited time license for making this compound this time. In exchange, our business partner will pay us approximately $200,000 in royalties. We hope that the testing will yield positive results. This will be the prove of value for the technology that we own. Then we can make more money by licensing the IP or by selling the IP rights.
This development is a part of a larger project ChemApproach fostered within our company targeted on producing the variety of fine chemicals targeted mainly to pharma industry. These chemicals are offered on ChemApproach.com internet store.
The ChemApproach is not directly related to graphene. However, it utilizes the business model of Graphene Supermarket that is proven to be successful. We can use our R&D labs to make the chemicals and also offer these products to Graphene Supermarket’s customer base. The TTA that we just signed is a vivid prove that these project could yield large and lucrative business opportunities.
Q. Cryptocurrency mining and Blockchain technology. The Company announced filing a patent application related to Cryptocurrency Mining earlier this year. Could you please tell us what this invention is about and how it is related to Blockchain technology? Also, could you share with us more details on what’s done by the company in the Cryptocurrency space?
A. As an innovative company, we constantly looking for new applications for our advanced materials we developed. The innovations are more likely to demanded by the emerging technology markets rather than by mature technologies.
The Blockchain technology is fascinating, goes far beyond the cryptocurrency mining and most likely to be widely used in future for variety of applications including verification of medical records, commercial contracts and many others. The problem is that the blockchain proof-of-work verification algorithm requires substantial computational resources that cannot be reduced. When computers doing the calculations, they consume electricity and generate heat. While we can not reduce the amount of electricity being consumed by computers, we can harvest the heat produced by computers and reuse it and even convert it into cooling. Our invention relates to the latter and our speciality graphene materials help us to do it in the most efficient way. The cooling later could be used for air conditioning or food storage, thereby making the work of the blockchain computers less expensive
While we are doing some research to sharpen this technology, our company is mot planning to generate new products or services based on this IP because blockchain is not in the route of our core business. We will be actively looking for commercial partners who already actively involved in this market and we will try to monetise the IP throw licensing.
Q. Future plans. Our last question: could you please tell us and the shareholders of your company what are your plans for the future? How do you see the company moving forward?
A. We see a very bright future for the Company in the advanced materials space. Together with $500,000 grant that we received form the State of New York in December 2017, and the $1.2 million of warrant proceeds, the funds allow our Company to accomplish the relocation, establish better infrastructure, install industrial scale equipment and increase production and commercialization for rapid growth of Graphene 3D Lab’s business.
We will continue with the projects that we have already started following our business model and looking for potential partnership with big industrial players. We also have started another project in the space of advanced composite materials. We hope our effort will come to fruition in not so distance future and we will update our shareholders on this new development.
FULL DISCLOSURE: Graphene 3D Lab Inc. is a paid client of Stockhouse Publishing.