Nanoco Group plc (GXG.DU) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Nanoco Group plc Full Year Results Investor Presentation. [Operator Instructions]. And I'd now like to hand you over to CEO, Brian Tenner, Good morning, sir.

Thanks very much, Jake, and good morning to everyone who's listening. So this is Brian Tenner, CEO of Nanoco. With me, I have Liam Gray, our CFO. We're going to run you through the highlights or the main points coming out of the analyst presentation that we gave yesterday. We won't cover everything because there have been quite a lot of questions and a lot of detailed questions submitted today. So I want to use as much of our time as possible answering those questions. So if folks want to have a more detailed run-through of the presentation deck that we're using today, the best advice would be to go to our website and listening on yesterday's presentation where we turned every page, whereas today, we'll be really drawing out those highlights. So without further ado, I'm turning to Slide 3 in our deck just looking at the highlights of what we've done over the last 12 months. From an operational point of view, all of this has basically added momentum so that we're now generating longer-term commercial visibility. So just looking at what we've done. We signed a major full year contract with a European customer, working in the sensing applications. Previously, we've been working on 3-month, 6-month type rolling contracts. So it was gratifying to get a full year contract extension in that full year 3 of the deliverables. The first 2 are to get 2 different materials to a fully validated for production readiness stage before the end of the contract. The contract ends in May '23, but we expect to be really ahead of that with those 2 products. And the third deliverable is actually developing a brand-new material based on a brand new material set for that customer, all of which is evidence of their long-term commitment to the -- this aspect and these types of sensors. You'll see later on, I'll talk about what we've actually done in detail in the sensing area, and we've significantly expanded both the number of customers that we're dealing with but also the number of materials and material wave length combinations, and you'll see that later on. From a litigation point of view, back in May, the Patent Trial and Appeal Board validated all 5 of the patents that we had brought in this case, and all 47 of their associated claims. And basically, the story of this year from a litigation point of view is we've successfully cleared every single hurdle in front of us and cleared them by quite some margin. Obviously, there's still hurdles ahead but having not already fallen, we're in a good position to take the last few hurdles. And then finally, again, from an operational point of view, we are almost completely out of our Manchester facility. The last shutdown and dilapidations of that will happen just before the end of this calendar year. Our operations are already up and running in Runcorn, and we're just recommissioning a couple of more processes, and that process will complete, disable us around GBP 700,000 a year once the consolidation is complete. Just very quickly on the financial highlights. Twice during the year, we raised revenue expectations and each time we achieved those expectations. We also delivered further savings during the year, and those will then add to the extra savings we're expecting from the Manchester exit. But it basically means that our cash costs, which were around or just above GBP 400,000 a month, they're now actually below GBP 400,000 a month. Then in June, we had an equity issue that was very significantly oversubscribed, and we took the opportunity to raise or issued the full 5% allowed to issue under our AGM resolutions, and that raised GBP 5.4 million net for the company. So the combination of that improving commercial outlook, that fund raise and the reduction in costs and expected further reduction in our costs means that our organic cash runway stands comfortably out into calendar year 2025. And that is actually beyond the point in time at which we expect to be self-financing. So actually, assuming we achieve that target of being self-financing before calendar year '25, then our cash runway actually will extend indefinitely as long as we can maintain that position of actually being a self-financing business. So those are the highlights for the year. Just going over the page. Just a very simple summary. We've got 3 key sources of value in the business. Two of them are organic, one of them is litigation. The 2 organic sources, one is in sensing market, sensing applications. That's a lot of stuff I was just talking about in the highlights. And there, we are, as I mentioned, getting closer to production and our customer has still got published road maps that says they're going to be in commercial production in calendar year '23. So that's why we are confident that we will be in commercial production in calendar year '23 as well. And the other organic side of the business is Display. It has been very, very quiet for the last couple of years, almost all of our organic activity was focused on sensing, but it's been pleasing again this year that actually interest in both cadmium-free quantum dots solutions, but also specifically in Nanoco has been brewing, and we have reengaged at an early stage on a small scale with a number of potential display customers. And of course, people will know the display market. Most of the players are very large and a bit like the sensing market. If you can get designed into a product, if you can get into an application, then it almost immediately presents you with significant volumes. And when I say significant, what I mean is the sort of volumes even at a small scale, that would get us to that self-financing level of income in the business. And again, just as a reminder, we estimate today our breakeven revenue figures around GBP 5 million a year. And lastly, on the litigation. Again, I mentioned we cleared all the hurdles. I'll say more about it later. There's a couple of detailed slides on it. But again, we won all our IPRs, the nature of the decision by the PTAB in rejecting Samsung's applications for those IPRs gives us confidence actually that even though Samsung are appealing those, we're in a good position to resist those appeals and actually win them and have our IP fully validated thereafter. I'm just going to now skip a slide. You'll see Slide 6, there's a little bit about market opportunities. That's the kind of thing if you want a more detailed picture, just listen to yesterday's webcast. Some of the information in there is repeat from previous years. So what I'm focusing on is Slide 7. So this is what's explaining the things that we have done and the things we've achieved in the last 12 months with regard to our sensing product portfolio. Again, you'll have seen a similar graphical analysis before and what this is emphasizing? Back in early 2018, we were a one-product, one-customer company. The numbers inside the circles you see here are the number of customers that we're dealing with, either on that material or on that wavelength or whatever it happens to be. And again, you can see from the Legend, products started development, they move through optimization, they go to scale up. They then go to production validation. And finally, the ultimate goal, obviously, is to be in production itself. And again, just to clarify, because folk have what does validation mean? You actually have to validate your materials at every step of the way. So if you develop a brand-new material, then you have to validate it. What does that mean? It means that you can replicate it and you can make it consistently inside these parameters. Then when you optimize it for an application, you need to validate it again because it needs to stay locked. It needs to stay stable. Then once you put it through a scale-up process, again, you need to validate it. And if you like, the big ticket validation is right at the end, when everything is locked, everything stable and you're saying you're not -- it's like in NASA at Cape Canaveral you're ready to launch. You really are ready to go into commercial production. So when we talk about end product validation, that's what we mean. But just remember, there are various validation steps along the way. And the last point to highlight on this chart is where you've got the little black boxes outlining some of those circles below. That's where there's been a change or progress during the last 12 months. So that's where we've increased the number of customer engagements. So for example, if you look at one of those boxes, now I've got 5 customers looking at a new material set B, deliberately did not define there was material sets, A, B, C, because some of the chemistry and some of what's in them is confidential, if not trade secret. And again, you can see that there are 2 products that are significantly further on than all of the other customer product combinations and that's a near infrared application that's already at the validation stage and has been for a while. But that's the thing that, again, the validation for that should complete during the remainder of the 1-year contract with the European Electronics customer. And you can see the second product that's moved from optimization into scale up, and that will also go through validation before the end of the current contract with the European customer. So it still remains our goal, during 2023 calendar year, to actually have 1 product in production and a second product validated for production. Then going to go over the page again, I'll skip the page on the market opportunity for Display. Again, if you want to know more about that, just listen in to yesterday's webcast. So now I'm just looking at what have we done during display or what have we seen as changes during display during the year. So I mentioned that we've had a lot more inbound inquiries and a lot more interest in specifically in Nanoco's CFQD quantum dots for use in Displays. That's been driven by a number of factors. We're saying that there's increased awareness of RoHS, restriction of hazardous substances around the world. There are a lot of TVs out there that have still got cadmium in them, and they're still being made and they're still being sold. We're also aware that with increasing awareness among the big name brands certainly and the big name Western brands about the implications of ESG, the environment, et cetera, that they are not waiting. They do not want to wait until RoHS becomes legislation, and they're obliged to change their ways. A lot of them and I talking about trying to get ahead of the curve and get into more environmentally friendly CFQD-type solutions for Displays before they're forced by RoHS. We also think that getting our core IP validated by US PTAB, that's actually raised risks in the minds of a number of players in the market. So we're aware of competitors who regularly threaten people with their IP. But that IP that they're threatening people with has never actually really been tested in court, whereas ours has. And so particularly if we win the first run trial with Samsung, I think there are a number of market players, where they're manufacturers of quantum dots or consumers of quantum dots and TVs and displays that can expect a polite ladder from Nanoco just pointing out our IP, the quality of that IP that it's already been validated in the IPR and in the court process. You'll also see that there are more devices that are talking about adopting quantum dots into displays, so whether that's tablets, phablets, phones, advertising, boards, et cetera, et cetera. So that's why there appears to be some refreshing, reenergized new interest in cadmium-free quantum dots. So in terms of what that means for our actual activities, we've restarted small scale sampling for some potential customers. We're discussing potential technical development agreements. Again, the thing to remember about display is we already have fully validated from our perspective. Quantum dots for use in display, unlike sensing, where we're actually starting with the materials were the development end. So if I was referring back or referring to display in the same ways that we talk about and the sensing materials have to go from development through optimization, et cetera. For the display dots, they're already through development. They're already through optimization. A number of generations are already successfully through scale up. And actually, from our perspective, they're ready for final production validation. So if a customer did decide to go for a Nanoco CFQD solution, you would not be looking at a 2-, 3-, 4-year development cycle that you see in sensing. It could be anywhere between 12, maybe 15 months just to get into the final device. So it's encouraging. The one thing to emphasize, it's still early days, and we'll see where it goes from here. So turning over the page then. You will find -- if you go to this deck on the website, there's a recap of some key points about the litigation in the appendices. I'm not going to go through all that today just in the interest of time or yesterday for that matter. So key events in FY '22. Well, I already mentioned about PTAB validating the Nanoco's IP, all 5 patents, all 47 claims. We know that Samsung has lodged notices to appeal those. The appeals are expected to be filed in November '22. We knew that because they got -- Samsung asked for an extension to the deadline to file those appeals and that 3-month extension was granted. So November '22 for their actual appeals, around the end of 2023, maybe early '24 for the outcome of those appeals. As I mentioned earlier, the way in which Samsung's original claims were rejected makes us confident. But purely from a statistical point of view, and again, just to emphasize, I think, we've always told people, if 90% of people win and 10% of people lose, that's interesting statistically until you find out whether or not you are in the 90% or you're in the 10%. But purely from a statistical point of view, more than 70% of all PTAB appeals, the appellant's case is actually rejected in full. And it's less than 10% where it be accepted and so the remaining 20%, some of the cases accepted. Some is rejected. So basically, you're saying in 90% of the case is the person with the patents in this case, Nanoco comes out either with everything or at least with some of their patents intact. The other big event in FY '22 was the pretrial conference. Again, Samsung, we're trying to have all of our experts struck out. They were trying to have all of our damages models struck out. They were trying to have all of our damages models experts struck out. And they were also seeking summary judgment to have the whole case thrown out, i.e., for the judge to say, there is no case to answer. It is over. Every single one of those was rejected. I'll answer it now because it's a question that has been submitted. Someone asked the question about the red dots. Yes, we actually believe we do have an infringement read on Samsung in the red dots. But as we've explained before, the 12 hours of the trial, if you have to explain 2 different processes, 2 different ways of infringing, et cetera, et cetera, do cross examinations, do everything else, cover your damages. We were always going to narrow our case. So the fact that Samsung won this case against red dots, we didn't actually argue against it. So that tells you what we think about that. And again, it was important. We didn't think it was a serious or significant risk, but it clearly was a risk that there was a motion for summary judgment to have the whole thing thrown out. We haven't talked about it much because we only really talk about what we think are material risks, but it was a real risk. And the judge dismissed that motion. And by dismissing that motion, the judge was basically saying, right, this thing is now ready to go to trial. And that's why I use the phrase, we are going to trial because the judge said we were because he threw out the motion to dismiss. But all of this is in a live. Those of who are watching the case closely, allowed us to focus our case much more narrower down to just a couple of a patents and a handful of claims. We've also reduced the number of damages models were going into court. And again, that is just simply a reflection of the fact to emphasize here we've got 12 hours to cover everything, present everything, cross-examination. As the trial typically starts on a Monday, doesn't have to, but they're 5 days long, and it ends on a Friday with a verdict and everything that goes with that, which I'll come into just over the page. Again we've been bumped a couple of times from the trial scheduling. Undoubtedly from the court and the judges perspective, there is a logic to what's going on. Unfortunately, we're not privy to that. So we went from being second in the schedule to being sixth in the schedule. We understand now we're fourth in the schedule. That doesn't mean you are going, it doesn't mean you're not going. The worst-case scenario, we are advised by local counsel, the worst they've ever seen or the hardest to deal with is being tooled on the day of the trial when you're there expecting and you're sitting outside the courtroom and being told, it's not happening, see you in a month. So normally, the court is conscious of people's time and money, and they do try to give people advanced notice, but they can't always do that. So usually, you find out a week or so in advance whether you were scheduled second, fifth, sixth. You either get released or you get told you are #1 and you're going. And we've now told the markets that when we are confident that we are going, that's when we'll do our next update rather than just comment on being in a schedule because it doesn't really add up too much. And the last thing we did during the year is we filed suit in Germany. And again, as we said, we're reviewing options in other territories. Just going over the page then, the litigation timetable. And as I say, this is an indicative timetable. Some of these processes are more tightly controlled by statute and regulations. Some of them are subject to so many different moving parts and decisions to appeal and then extensions for appeals, et cetera, et cetera. But just in real summary, the IPR process, so the validity process, the Patent Trial and Appeal Board process that is a more controlled -- more tightly controlled regulated process. So as I mentioned earlier, we're expecting the actual appeals by Samsung to be filed in November 2022, and we're expecting then the answer between 12 and 15 months later. So around the end of '23, early '24. And I've already talked about statistics and confidence and likelihoods, et cetera, around the PTAB process. If you then turn to the trial and the potential appeal time line. And so jury verdict, we are estimating that could be before the end of this year. We know there are 2 more trial dates for the end of this year, one is 31st of October, and one is 5th of December. We then know that there are 2 more trial dates in January and 2 in February and 1 or 2 in March. Again, just to be clear, only 1 case can be heard each week because there's only 1 judge dealing with IP cases in the Eastern District of Texas or rather, we've only got 1 judge. We can't go to a second judge or a third judge. So our judge can only hear 1 case whenever he sits, and clearly, he's got other stuff to do between trials. So it could be before the end of this year, which would be nice. But equally, it could spill into the first half of next year. You shouldn't read anything into schedule. There isn't anything to be read into scheduling. It is just a thing. So you will then get a jury verdict. And if that verdict is successful, there will be damages award, so the jury will specify a number. They will specify if it was deliberate or if it was willful. And they will specify if that covers all damages or just past. Immediately after the trial, there will be a whole bunch of post-trial motions. So these aren't appeals. These are just procedural objections, et cetera, trying to get things redone or thrown out or started again or whatever it happens to be. They're the normal part of the hurly-burly. And there are normally a lot of them because people don't want the judge writing certain things in his final report, so we'll be looking to have things struck out, et cetera. It's all extremely tactical. Whether it's 3 months or 6 months later after the verdict, then the judge will issue their formal written opinion. So if there's been a finding of willfulness, the judge will decide on the multiplier. Again, we've explained that can be up to 3x. But in Texas, it's typically around 1.5x multiplier. If the jury have also said that their damages number only applies to the past, then the judge will work out what he thinks is an appropriate running royalty. That running royalty could be based on the verdict for past damages. It could be bigger than the verdict for past damages. It could be smaller than the verdict for past damages. There are a whole host of ways of calculating that number. It just has to be done reasonably. And unfortunately, that's all the guidance we can give. Some people say running royalties should include willfulness multiplayers because any future infringement is obviously deliberate if you've been find guilt of infringing. Other people say, no, that's a special one-off because you didn't know up until that point. So you shouldn't be penalized for the same basis going forward or whatever it is. So there are arguments both ways. So again, you can't automatically assume that any running royalty will be bigger or lower or the same. You just know that there will be one. After the judge has issued this formal opinion then so again around Q2, Q3 '23. That's when both parties can submit their formal appeals. This is a piece of the process that then I won't say how long is a piece of string, but it can go on for some time. Now again, we've got an advantage. We're in Texas. Things move relatively fast compared to some other territories. But those appeals could at last -- the whole appeal process could take up to 3 to 4 years. Why could it take so long? Well, when I come up in appeal is a retrial, go back, start again. You want a jury to give you a decision on our verdict, decision on willfulness, decision on damages, et cetera, et cetera. You could even appeal that says, actually, we're happy with the verdict. We're happy with willfulness, but just we don't like the damages to go back and have a damages trial only. And if you look at the trial that we were bumped for in early September, PNC against USAA, that was a trial just by damages. So that's why that process could take a long time. And all of that, I have to emphasize presupposes that there is no early settlement. But of course, any settlement, any early settlement, it's going to be up to Samsung, if they're prepared to engage on meaningful discussions about fair value that reflects the global nature of our patents and the lifetimes of our patents. So that one to a large extent is outside of the Nanoco's control. The reason that we've highlighted the German injunction on here is that when faced with an injunction, most companies, certainly in Germany, will very rapidly enter settlement negotiations because nobody wants to be banned from selling their product. Now this process isn't without risk. The potential German injunction could be awarded in 2024, but the actual validity decision won't necessarily be taken for another 6 months. So if we impose the injunction in March '24, we might have to put up a bond for a loss of profits for Samsung, which would clearly be a significant amount of money, whereas we have the option to wait another 6 months. And if validity was confirmed, you've now got injunction. You've now -- or sorry, you've now got infringement, you've now got validity. Yes, there'll be appeals processes, but it would be a much lower risk to put in a bond there if you wanted to enforce an injunction. And again, whole of these things and the extra law suits around the world, they're all designed to put pressure on Samsung to be reasonable and actually engage in some sort of sensible settlement discussions. So that's it for me. And I'll just hand over to Liam, who is going to do a quick run-through on financial highlights.

Thank you, Brian, and good morning, everyone. So we'll hit the financial highlights for the year ended July 31, 2022. We'll start with the top line. Our revenue and other operating income has increased by 24% from the prior year. The operational leverage in the business along with the cost savings we've implemented previously means it has had a significant impact on improving the adjusted EBITDA by 26%. And then as we communicated previously, looking forward, we expect our revenue for FY '23 to increase by about 20% on FY '22 with a very similar cost base this year. If we look at our cost base, in early calendar year '22, we decided to consolidate our operations into the Runcorn site and close the Manchester site. The closure of the first floor in Manchester was completed in FY '22 and we anticipate the completion of the exit of the ground floor in Q2 of FY '23. Given the tight cost control over previous years, we are investing more money in our staff and have had the company-wide pay rise in addition to other benefits, and intend to continue to invest in both our people and the office environment in Runcorn. And then coming to cash. The fundraise we completed in June '22 raised GBP 5.4 million net of fees, and takes our cash runway out to calendar year '25, which is past our expected breakeven point. Moving on to the income statement for the year. This shows our FY '22 income statement as compared to FY '21. As mentioned, the revenue increased GBP 0.4 million to GBP 2.5 million in the year. This increase has been driven by the work we are doing with the European Electronic customer with increase in both services revenue and the products sold. In addition, there are a number of other projects in both sensing and display, which have contributed to this increase. Other operating income increased year-on-year due to the completion of the grants relating to the development of COVID-19 diagnostic tests. Other costs in total have fallen in the year, reflecting our reduced cost base. Moving down the table, our share-based payments and associated charges have increased due to the increase in the company's share price year-on-year. And then we have depreciation and amortization, which is largely in line with prior year, but these will fall next year due to the closure of the Manchester site. And finally, we have our R&D tax credit of GBP 0.5 million being offset by the full year impact of interest on the loan notes taken out in July '21. But a key metric for us here is the adjusted EBITDA, which has fallen GBP 0.7 million from GBP 2.8 million in the prior year to GBP 2.1 million in the current year. So the next slide, shows our revenue and billings. And I'm going to skip through this one and the next couple, just get the summary so that Brian can do the Q&A at the end. So financial summary. Regarding FY '23, we opened the year with a contracted order book of GBP 2.1 million, which more than doubled the opening order book for FY '22. Based on our current pipeline of where to anticipate revenue being approximately 20% higher than that of FY '22. Our cash cost base remained similar with some savings from the reduction in property costs being offset by increased elsewhere such as payroll, but that does mean our breakeven revenue point is now around GBP 5 million. On capabilities, we now have all staff working on one site, which provides both operational and financial benefits. All staff are working on revenue-generating work and the production facility in Runcorn when operating at full capacity generates around GBP 130 million of revenue. And then on cash, our average net monthly cash burn is now below GBP 0.2 million. As mentioned before, the business has strong operational leverage. So any further commercial wins will have significant impact on both EBITDA and cash. And finally, we believe our current cash resources [indiscernible] past expected breakeven point. And apologies we have a fire [indiscernible]. Apologies for that short interlude. But I think that was me finished on finance. So with that, I'll pass you back to Brian to summarize, and then we'll move on to Q&A.

Okay. Thanks, Liam. So just a summary of the year on what Liam has been alluding to in respect of FY '23 as well. So we are still saying we are participating in the global markets for both sensing and display, and the sensing markets are constantly getting bigger. More players are coming in, more players looking at applying quantum dots into their solution stacks. And as I say, it's gratifying that on display, things for -- certainly from Nanoco's perspective, seem to be reenergizing with a number of new engagements. We, by keeping open our Runcorn facility, we have retained our capability for large-scale production in both markets, so in sensing and in display. In sensing, that extends to many hundreds of millions of units or the equivalent hundreds of millions of sensors from our material. And on the display side, it's handfuls of millions of TVs. But when you consider that the entire market out of -- outside of Samsung for CFQD, TVs, is less than [ 1 million], we could actually service the entire market if we needed to from the production facility that we do have and it could be expanded relatively simply at a relatively low cost. I just want to emphasize success in either of those markets does get us to that breakeven point clearly. And that's just the first goal. We want to get into commercial production, then we want to get to breakeven. But the revenue-generating capacity of our facilities is such that we should be able to push on strongly into much higher levels of revenue and profitability heading in the medium to longer term. In terms of outlook, we are expecting this year a steady incremental revenue growth as we move into production. You'll see in our actual detailed preliminary results and in our annual report, that we have assumed that we have a very small actual commercial production starting at the back end of this financial year. So around summer, around June, July 2023. And that's consistent with our expectation of being in commercial production. Again, we're being conservative. We're assuming that is a low volume use case that it won't involve a mobile phone handset. It's more likely to be an application in, whether it's headset, glasses, agriculture, just something not significant volume, but from a substantive and qualitative point of view, absolutely transformational for Nanoco in that it will be our first actual commercial product being serviced on a global level, since the company started up back in 2003. We already mentioned our organic cash runway extends out to calendar year '25, which is beyond the point at which we expect to be breakeven. So it will be nice not to have to just constantly be worried about running out of money, what over the last few years has felt like every 6 to 12 months. And both display and sensing market opportunities to our mind as part of our strategy. They're both a clear path to breakeven in the short to medium term. And as I said, short to medium term means at the latest by calendar year '25, if not before. So in terms of the value in the business, there's still the transformational potential in the Samsung litigation. We are expecting that trial relatively soon, still expect visibility in late 2022 on potential sensing production revenue in 2023. Just to be clear, visibility does not mean an actual PO, it does not mean actually in production. It could, but it makes more just confidence that actually, yes, we're in the final stages of product validation and then just awaiting customer orders. And so effectively, we've got 2 twin tracks to significant shareholder value growth in the short to medium term. One is the organic business, whether it's through display or sensing, and the other is the sensing business. And that brings me to the end of the presentation. I'll hand you back to [ Jake ] for just a second, while we gather ourselves for the questions that we're going to be going through.

Brian, Liam, that's great. And thank you very much indeed for your presentation this morning. [Operator Instructions] Liam, Brian, we did obviously receive a number of presubmitted questions ahead of today's event as well as, as you can see in the Q&A tab itself, a number of questions have made their way through during today's presentation. So thank you to all of those on the call for taking the time to submit their questions. And if I could just hand back to you to address those where it's appropriate to do so, and then I'll pick up from you at the end.

Okay. Thanks, Jake. All right. So I am going to have to talk faster than normal, and apologies if the Irish accent gets in the way. But I think we've got more than 30 questions that we need to answer, and so -- and we will kick off immediately. So question one, could we seek an injunction against Samsung to stop them selling products with Nanoco's technology as opposed to merely trying to recover damages as that may bring them to the table to negotiate the settlement or agreement if successful? Simple answer is it really depends on the jurisdiction. So in the United States, I think we've already explained. If we were a direct competitor, i.e., if we made TVs, then you've got a chance of getting an injunction, but the truth is the U.S. preferred model is financial compensation. So no, you will not get an injunction in the U.S. And I say that even though our claim asks for one, you always ask for one and you'll never get it, okay? And so that's in U.S. Whereas in Germany, actually, the only remedy that you seek is an injunction. Damages comes afterwards. If you get an injunction, then you can have a negotiation about money and financial compensation, et cetera, but the standard remedy in Germany is an injunction. Other territories, the simple answer is it depends. There's a whole range. Some of them, it's almost impossible to get an injunction. Some of them like Germany, that's what they give you. Others at somewhere in between, others you could get both. So it really does depend. But we're absolutely conscious of the fact that potentially injunction in Germany would persuade Samsung potentially to change their stance in any discussions or appeals processes going on in other territories such as the United States. Question two, on reading the court papers in the public demand, Samsung appeared to have reasonable grounds to question Nanoco's patents on validity, on sufficient -- or patent's validity on sufficiency, and there's an unresolved argument between experts regarding the appropriate level of positive, please, can you provide investors with more comfort on these points? Okay, the really, really high-level answer is, and I think, we made this clear at the start of this whole process is we are only going to comment on material risks and issues. If I give you an example, if every time I talked about production coming out of Runcorn, I had to talk about the fact that there's a risk of the facility being hit by a plane or going on fire or burning into the ground. It will be a very, very long-winded process. So on the specifics of these 2, yes, theoretically, they are open issues. But does the company feel any need whatsoever to make any comments on them? No, we don't. So like the factory point, yes, is a fire risk a real risk? Yes, it is. Of course, it is. But do we feel any need to comment on it every time we talk about production, absolutely not. Clearly, you know that we've got some of the best lawyers in the world working on this. And we do follow their advice. Do we think that these are material risks that we need to comment on? No. And the last point I'd ask you all to consider is, in the same way Nanoco, we only have 12 hours in this upcoming case, so does Samsung. And if they want to look at theoretical highly technical arguments to persuade a jury of lay people of a point well, that's their choice if they want to do that. Next question, can you provide guidance on the time line of the German funded lawsuit? I think I may have already covered this, that expect an infringement decision in March '24. And if we win, we can impose an injunction if we deposit a bond for lost profits. Alternatively, we could wait until October '24, which is roughly when you get the decision on validity of the patents. So then you've got validity and infringement. So again, you could still go for an injunction, obviously, a much lower risk there or you can wait for the appeals processes. And if you win the appeals processes, assuming there are some, then actually, you can go and impose the injunction. And obviously, you don't need a bond because it's been fully resulted in your favor. So that's the time line of the German litigation. And you can see that it does intervene with the U.S. litigation. And clearly, if we bring actions in any other territories or any of the other territories we're evaluating, one of the factors to consider will be whether or not that positively intervenes some of those other processes to bring extra pressure to bear in the process. Question four, looks like it's got about 5 to 6 embedded questions in it. And question one, I saw the note that Samsung litigation will proceed with a focus on Samsung's use of IP for green dots only. Can you say whether we think they're are infringed on red? So red and green have got different processes. Yes, we do think we have an infringement read on the red dot. But as I've explained previously, we had to narrow our case. And again, having to explain 2 different processes, 2 different infringements, a bunch of different evidence, expert testimony, et cetera. We were always going to drop down to focusing the case more narrowly. And it's also worth bearing in mind, they are 4x more green dots than a red dot in a TV, and it's much, much harder to make a green dot than it is to make a red dot. So if you're talking about the relative value of green or red, you would much rather have an infringing green dot than an infringing red dot just because there's 4x as many and just because one is a lot harder to make, meaning actually the person who is adopting the technology has taken even more shortcuts if they've actually copied the really hard method rather than copying the most simple one. And as we said before, the time that we've got to actually present our case just means that we can't cover everything. So that's why we've narrowed the case. Next question, how does winning all of the patent challenges affect the strength of your position in sensing? So the very, very simple answer is that on material set A, so the products that we're hoping to go into commercial production in calendar year '23, these patents have no connection whatsoever. Yes, the sensing material set A is not a CFQD. It is completely different. So the idea if there's any connection between those 2 materials and the IP sitting behind them, get that out of your head. There is no connection. However, material set B and C. And when it comes to D&E are actually very closely related to CFQD. Now commercially, they're further away from us. All of those products are in the development stage. But the simple answer is the patent wins in the U.S., they're on CFQD, they're relevant for display, they're relevant for lighting, et cetera, but they're not relevant for the immediate sensing opportunity. But they are relevant for future sensing opportunities in material sets B and C. So hopefully, that answers that part of that question. If your sensor customers were to bring in a second supplier in the case of high demand, would that second supplier need to license the IP from you? So the truth is if they were using any Nanoco IP no higher trade secrets, then yes, they would have to have a license. However, as we've explained in the past, on material set A, we do not have as much IP there as we do on B and C. And this is a more broadly known and understood process. So it's theoretically possible that someone could find a way to make the identical product but in a different way that wasn't infringing our IP. Whether or not that's easy or likely, I don't know. But certainly, our agreement with our customer specifically says if a second supplier is being brought in, then that second supplier if they're going to use any of our IP, they have to take out a license. It's also worth noting that our contracts with our big customers specify our minimum share of any future volume, which, therefore, limits the participation of second sources. But of course, these supply chains are important enough that there has to be a second source. And so inevitably, there will be a second source, although, of course, it's always possible for the customer themselves to be the second source and have an in-house fallback second source. Next question, should we definitely expect a trial now? How is the window for a negotiated settlement closed? I think you can see in the court papers that have been submitted, they're publicly available, that actually there was an open window before this case even started. We were talking to Samsung for a number of years before Valentine's Day back in 2020 when we actually first filed this suit. The truth is the window is always open, and I mean always open. The question is whether or not there are any messages passing through it, that's another question. But the truth is the window never closes. Again, to give you a real life example, one of our advisers had a case that settled while the jury had retired and we're considering their verdict. So there were settlement discussions going on during the first 4.5 days of the trial and while the jury was out a settlement was reached, so there is no cut off. There is no point in time at which a settlement becomes impossible. It's all just down to whether or not the parties can actually get close enough together to actually make it likely that there will be a settlement. But one thing to remember is people know, I think they're familiar with only 1 in 20 cases gets the trial. Well, the ones that do go to trial and then there's a successful verdict or a verdict one way or the other, only a tiny proportion of those actually end up with a legally enforced judgment. The rest settle in some way, shape or form at some point after that. So statistically, it wouldn't surprise me if more than 99% of all cases settle, whether it's before trial, during trial or after trial. And it's only a tiny, tiny percentage where you end up with all the appeals exhausted and the U.S. Supreme Court is basically telling someone payout. Next question. I've seen some positive comments recently around on the promise of compound semiconductors for infrared sensing. Are we able to comment? Well, effectively, that is what we are working on a CMOS sensor with quantum dots attached to it. That's putting quantum dot on to a compound semiconductor. CMOS sensor is complementary metal oxide semiconductor. And there might be more technical aspect of this question that my law degree isn't fathoming. If there is -- whoever submitted this one, feel free to write to the company and we can explain in more detail, but basically this is what we're about. And a CMOS sensor with quantum dots, again, if you look in the pack we presented today and yesterday, there are significant advantages over [ nickel ] and silicon also the main advantage against in-gas sensors is the fact that they're between 100 and 1,000x cheaper for a CMOS sensor of quantum dots than to go the in gas solution. So fundamentally, that is what we're about applying quantum dots to compound semiconductors for sensing applications. Next question, what has Nanoco learned most from its ongoing litigation with Samsung? Sort of question that inspires either [indiscernible]. So I'll avoid all of that. I think the thing to be clear about is every single piece of confidential information from Samsung's perspective, Nanoco has never seen. Our lawyers are like to see it. But if I ask our lawyer, so how does Samsung make their quantum dots, they just look at me and say, look, I can't tell you that because it's confidential. So if someone was thinking that we were learning their secrets through this process. And the same applies in reverse. Anything that we marked as secret or confidential, Samsung wouldn't have learned. It's a moot point whether or not Samsung did all their learning during the 7 years that we worked together. But the whole point is in saying that we haven't learned much, if anything, about Samsung in this process during the ongoing litigation. I think one thing that we can tell you is that our confidence that Samsung are infringing has grown. And that's why we carried on with this process, not just because of success at PTAB and other litigation points. But yes, we are confident through the process and our advisers are confident through the process that we have got a strong case. We've also grown in confidence that anyone making CFQD is likely to be infringing our patents. And when I say anyone would mean anyone making cadmium-free quantum dots because we don't think there is an easy way or a way to actually make them at the mass scale that doesn't infringe some of our core seating patents, et cetera. I guess the other thing we've learned is that about the U.S. litigation process, but we'd hopefully -- well, you never know, we may have to go down this route again with another company, but we'll see. So we've learned a lot, but certainly nothing that would be confidential or commercial from a Samsung perspective. Question six, if Samsung wins its law suit -- sorry, if Nanoco wins its lawsuit against Samsung, did Nanoco expect Samsung and its current display customers to then source from Nanoco? Simple answer is no. The typical solution in the United States, whether negotiated or imposed produces a license and a license payment. That license is a license to make or have made. So it is almost inevitable, but if when this case against something in the U.S. ends that Samsung will be able to legitimately and legally carry on using their current supplier Hansel as a source of quantum dots. And as I said before, in the U.S., this is not an injunction territory. So we get financial compensation. It's possible that you could try to negotiate being a supplier, but equally, Samsung could turn around and say, we've got a well-established supply chain, and we're happy with the quality standards, et cetera, et cetera. We don't want to interrupt that. So therefore, we want to stay with the current suppliers. So the simple answer is no, we don't expect Samsung or its current display customers to have to source from Nanoco. Next question was what sales volume is anticipated? Well, the same answer. If we're not going to be supplying the Nanoco with quantum -- or sorry, Samsung with quantum dots, then there wouldn't be a sales volume. What leverage -- next question, what leverage will Nanoco have to force current customers if there's still in IP to make future purchases from Nanoco? Well, again, it's the same point. Samsung have a license to make or have made, then they will be able to carry on selling to the other customers that they've announced that they're selling their QD panels to. The reason that we don't lose right because of that is those QD panels will be subject to royalty payments, the same. So if Samsung are selling TV directly, we'll have a royalty. They're selling it to another big OEM, we get a royalty. So we are being compensated for all sales of the infringing units. And then the question was what options are available for accommodating this increased production? I would say, on the back of the Samsung decision, there won't be. But as I mentioned earlier, when we're running through the presentation, we have production capacity in our Runcorn facility for between 2 million and 3 million TVs, which is more than 100% of the non-Samsung CFQD TV market today. So it's more than adequate for us to get a toehold, whether it's with the #2, #3 and #4 company in the quantum dot TV markets because their shares are only a couple of percentage points. Question seven, please can you give us your anticipated time lines on the German litigation? I think we've already talked about that. Will there be a patent review in Germany before the court case? Absolutely not. I think we said the German first decision will be next -- did I say November '23. We're expecting the court case and whether it's the end of Q4 this year or Q1 next year. Next question, are we currently proceeding with litigation in U.K. and China? And do you have the time scales for these please? We mentioned in the past. And we named those 2 markets as markets we're evaluating. And clearly, if we were litigating in those territories, that would be material news, and we would announce it. We haven't announced it, so you can take it that we are not litigating in those right now. That does not mean that we are not evaluating it or that we're not taking steps to consider it or to start it. It just means we have not started. And question is, is the delayed court case likely to have an impact on the anticipated placing of commercial orders for Samsung quantum dots for the fourth quarter 2022? Absolutely not. As I mentioned, there's no technology or material connection between the court case and material set A or Generation 1 sensing material, that's from our perspective. Our customer might have a different view. Customer might be waiting to see what happens, but we don't believe that's the case because they're wholly unconnected. Question nine, or any or all of the 5 patents for the PTAB decision used in the sensor technology? I've already said, not material set A, but yes, in sets B and C. Question 10, are there any separate patents to the sensor technology? And if so, to what extent are they critical to the sensor application i.e., other ways people get around Nanoco and get to the same results without licenses, et cetera? Again, this is similar to what I said before. For material set A, that material has been around for decades. Yes, we've perfected it. Yes, we've got some trade secrets. Yes, we've got some [ no high ], but we don't have much, if you like, filed patents on material set A, but we did in the other material sets. So simply on material set A, other people could try to make that. But we know it's very difficult. It's very challenging. We learned a lot working with the U.S. customer and now on the same product with the European customer. So we think we've got technological lead based on [ no high ] preparedness, the existence of a production facility, et cetera. And next question, Nanoco gone to court on 3 to 5 patent groups. How does this leave the remaining 2, for example, could these be taken to court separately? The ones that we dropped almost all of them were dropped without prejudice, meaning we can bring them back anytime we want. The only exception to that is in this case, and I do mean in this case because Samsung actually had red dots excluded with prejudice and their motion and we didn't oppose that. We couldn't come back on red against Samsung. But on everything else, it was dismissed or dropped without prejudice, so we could bring it back from the red. Additional litigation action has been taken in Germany, is this likely to be decided before the case in America? Well, I think when you see the time lines, you'll see we're likely to have a verdict in the U.S. before we get an infringement decision in Germany. However, we're not likely to have to an I come to a final appeal process in America before Germany. So some parts of Germany are ahead, some parts are behind. But in general, more of the German decisions are earlier with the exception of the actual initial verdict because it's end of this year, early next year. Question 13, what determines whether court action is taken in other countries? At one time, for example, Japan was muted. I mean the -- so the markets that we look at, a, Samsung need to be selling a lot of TVs there; and b, we need to have IP coverage there. I think we've explained in the past. And we think we cover roughly by volume 80% or 90% of Samsung's global TV sales with our patents. I've already talked about you'll take legal action if you think it's going to be fast, if you think it's going to be cheap, if you think it's a patent owner friendly territory, et cetera. So there's a whole bunch of different tactical and strategic factors that decide whether court action is going to be taken. I would like to think we do not have to see Samsung in every territory around the world. I would like to think whether it's 2, 3 or 4 key territories that, that's enough pressure in the mixer. Next question, question 14. Mobile phones can be listened into by third parties. People can be located via their use. There's potential for substantial awards to the Nanoco so the stakes are high. What steps are being taken to ensure the jury is not being noveled? So besides our normal -- our own normal level of security around our own networks, et cetera. I mean I think there's question, if Samsung actually -- I mean, this question almost isn't worth answering, the idea that someone is going to try and novel a jury is a whole different level of criminality. That is just -- it's beyond unconscionable. And so I would put that in the -- yes, it's theoretically possible, but the idea that it's going to happen totally naive, but anyone engaging in that, the repercussions for them would be enormous. So I don't really see that as a real risk. But obviously, we are careful with our information, with our communication, with our networks. We do get our offices swept for bugs, et cetera, on an infrequent basis to make sure that our networks aren't uncompromised, so our tactics and our approach are not being compromised. Next question from the statement you released with the results. You're saying that the U.S. court case is not likely to go ahead until H1 2023? No, not saying that at all. There are 2 more dates for Christmas. There are 6 I mentioned after Christmas. We don't know. What I can say is when we are told and firmly told that we are going first, we have to announce that to the market immediately. Again, it's something we've noticed in some communications. The bad old days of companies being able to hold on to information for a couple of days to coincide it with the results announcement or I want to do it tomorrow morning at 7 o'clock, those are long gone. The market abuse regulations, you will have seen, we will announce contracts 2 in the afternoon or 4 in the afternoon and people will ask, why didn't you do it at 7. Simple answer is market abuse regulations say you have to do it as soon as humanly possible, which means sometimes you've got 30 minutes or an 1 hour to announce these things. If the markets are closed, you can probably wait until the next day. But yes, as soon as we know that we are going to court, and we're firm and we're #1, then we will tell the markets. And clearly, if the judge got sick on the day of the trial, it would all be off again. That's another -- those risks like the one earlier about sufficiency, et cetera. I won't necessarily comment on those. But no, so we're not saying it's going to be H1 '23. We're just saying it could be H1 '23, and I guess I'm saying Q1 '23, if it's not Q4. Next question, are you aware -- this one was submitted directly to the company, actually. So this has come from our website. Are you aware of any other CFQD manufacturers that are potentially infringing Nanoco's patented IP? I think I mentioned earlier, we do not think it is possible to make CFQDs in any volumes unless you're infringing our IP. Now there aren't many companies around the world that make CFQD in any sizable volumes. You've obviously got our sales. You've got Hansel, who we know is supplying Samsung, and there is 1 maybe 2 others, but that's it. Next question. Are you aware of anyone that is able to legitimately manufacture CFQD that doesn't infringe? I think that's -- yes, that is the answer to the previous question. No is a simple answer. And we don't think you can manufacture CFQD at scale without infringing our technology and rolling through. That was all the pre-submitted ones. Jake, you'll have to show me if we're supposed to cut off, and I'm going to try and answer as many of these as we can. Should there be a settlement with Samsung, will the shareholders be informed via an RNS about the total amount of the settlement or about the amount Nanoco receives after deducting the percentage of the fund they raised. I assume that Nanoco has to inform the shareholders of the amount or if there is scenario where shareholders do not have to be informed. This one just goes back to the simple and very clear rules about market abuse and the release of inside information. There is new world whatsoever in which we could settle this case and not tell shareholders what it means. Now, that does not mean that if the agreement was a 55-inch TV has got a 0.75% royalty and a 65-inch TV has got a 1.1% royalty. You would never see that level of detail. but it is absolutely the case that we would, as a company, have to evaluate what we thought that settlement meant, including if there was a payment over 5 years, we would have to discount, we have to pick a discount rate. But the market would have to be told, this is what we think this means because that's the legal obligation in any RNS. We have to tell you all the important information all the material information, all the inside information but not all the commercially sensitive information. So there is no -- again, I've seen the same question asked, would we then just find out in the next set of results. No, you have to -- you would find out -- we might take 24 hours to talk to advisers, particularly if it was over the weekend, but we've got no choice but to inform the market and what it means. You might not get all the detail that you want, but you would get enough to be able to make an informed decision. If Nanoco wins a legal action against Samsung or a settlement is agreed, will the financial details -- it's the same question. So no, you will not have to wait and see it in the accounts, and you'll be told, it's an X million-dollar long sum, and it's -- what we estimate is going to be Y million a year for Z number of years. It's going to be that level of information. If there are any material risks to it. So, for example, if it was Y million a year dependent on the number of sales, then we would estimate without putting it into commercially sensitive numbers what we think that amounts to. But, perfect, as I said, any announcement has to include enough information so the reader of that information can actually figure out what it means. Next question, you're more or less assuming that we should see visibility of a commercial order in H1 FY '23 by January 31 and probably start production in H2 CY '23. I'm assuming you have a good idea of what the product is and what the size of the order is. You don't have to give an exact figure, but can you give us an idea of what kind of revenue we're talking about less than GBP 0.5 million, GBP 0.5 million a year, et cetera? So the simple answer is we know what our product is. We do not know what the customer's product is. The reason for that is we know that our customer is exploring and they've said it themselves, and they're active in a whole host of end markets. All of whom currently use CMOS sensors today, and it really is going to be about those end customers. And again, you can imagine when we were dealing with the U.S. customer, they actually keep some of that information relatively tight to their chest. They do not want the tail wagging the dog, i.e., the idea that Nanoco are going to announce that some global OEM is about to launch a product because we're a public company and have to make statements that aren't going to happen. And the way that happens is that we don't know what the actual product is going to be. And that's why we've said it could be a headset, so it could be a million units a year. It could be something in automotive. You're into tens of millions a year. It could be in consumer goods. If it gets into a mobile phone handset, then you're into the hundreds of millions of units a year. But our assumption, and again, you'll see it in the accounts and in the preliminary announcement is that it's a low volume case. And by low volume case, I mean a few million pounds worth a year of production for that first order. If it ends up being bigger, great, we'll inform people that it's a bigger order. But as I said before, actually getting into production means you will then grow in that ecosystem, you'll get into more products, you'll get into more applications. And so it will be a key event whether or not it's a small volume order or a big volume order. And as I said, we've got the capacity to respond to large volume orders, but equally, you can also service small volume orders. It's also worth noting that the smaller the volume, the higher the price, obviously, given that you're recovering a fixed cost base over a smaller number of units. And we -- as I think I said earlier, even a low volume initial use case with just 1 application in a short period of time will get us to a breakeven point. As I mentioned, breakeven revenue for us. And, I think, Liam reiterated breakeven revenues around GBP 5 million. So whether that's a combination of the low volume production plus some continued R&D income, that's what you're talking about as a conservative low-volume initial use case assumption. Next question, please, can you clarify if the German injunction requires an IPR in Germany or the validity of Nanoco's IP can be proved by the US PTAB outcome? Every territory is completely different. Unfortunately, I cannot draw any conclusions from winning in America. The German patent is actually written in German. No one's going to be surprised by that. I don't mean to be glib. But the German words, the language, the statements, et cetera, they have to be tested in Germany. So you might feel confident if you win in one territory, but it doesn't actually have a direct legal implication. The German court doesn't have to pay attention to what's in the U.S. In Germany, you filed an infringement claim a bit like America, Samsung, if they want, can invoke the equivalent of an IPR. And that's why I was saying we could end up with an infringement decision before validity in Germany, which will be the reverse of what we got in America. Next question. In the past, we have heard very often that this time, there will actually be commercial orders. And unfortunately, investors have been disappointed in this regard. What makes you more confident this time that the Nanoco will get its first commercial order in FY '23 on a scale of 1 to 10 or 10 is 100% sure? And to freely admit, I think, we referred to it as we've been to the [ Ultra ] before. So back in 2015, we were at the [ Ultra ] I thought we were at the Ultra with Samsung, and we got jilted. So I know there is an in-house joke that actually we have commercialized our technology. Unfortunately, it's branded Samsung, and that's where we've got the lawsuit. We then have the U.S. customer. And again, we've made it clear, they changed the design of their end-use device, which is why we were jilted the [ Ultra ] that time. Nothing to do with us, nothing to do with the product or its capability. It was just the end user changing the design of their device. This time around, am I confident? So I'm the basis for those confidence. So it's definitely more than 5. Yes, there is no way I've put it up at 10 because having been jilted twice before, and I was only here for one of those things can always change. You do not know what is going to happen. But if you take the fact that our customer just signed up for a 3-year contract, they've already scheduled in the design of material set B, which is part of the product life cycle, i.e., a, will go into production, and, b, will one day replace that. So they're taking a very long-term view of this. They are a huge significant player in the market. I've already mentioned all those other commercial customers that we're dealing with on a sensing perspective. So yes, some -- you ask me to put numbers on this. So whether it's a 6, whether it's a 7, whether it's an 8. I don't think I'd go to 9 or 10 because I'm a conservative sort of person. But I'd say on balance of probabilities for me, it feels like, yes, it's going to happen. But of course, there are all those risks out there, so it doesn't have to happen. But we're working very hard diversifying away from one customer, one product. That's why we've got 7 or 8 distinct customers, 12 distinct products and reengaging on display. So we've got a lot more arrows or a lot more bullets, whatever you want to call it to shoot at the target. So that's why I'm being more confident or hopeful that something will hit. But obviously, no guarantees until you're actually in production. Next question, will you be working with companies that are developing compound semiconductors, i.e., IQE plc? So again, there might be a technical aspect to this question is a bit about compound semiconductors. IQE I believe make VCSEL lasers. VCSEL lasers tend to be paired up with sensors because laser emits and the sensor absorbs, et cetera. Again, we work directly with the sensor companies. So depending on our European customer, in fact, yes, 3 or 4 of the companies that we're working with, I would describe as compound semiconductor companies. So the European customer is a compound semiconductor company. We're also working with -- our Asian customer is not a compound semiconductor company. They're a material science or a chemical company. But we know their customer is the largest semiconductor company in the world. So hopefully that answers that question, but no direct read across to IQE. If Nanoco thinks other players are infringing their IP, why not notify them immediately, why wait until the court case completes? I'm going to strand at metaphor here, and I'm somewhat wary of this because in the past, whether metaphors get misconstrued or whatever. But you do want to fight too many wars and too many fronts all at the same time, a, stretch your team; b, you stretch your advisers and; c, it costs a lot of money. Actually notifying people, again, you can do that. We may well have done it in some cases, will be drawn on that at the moment. But of course, if you put the dragon or the tiger and the tiger decides to stand up and bite back, then you've got on your fight on your hands, whether you want to win or not. So declaring war on all fronts at the same time it would be A strategy. Some companies do that. Clearly, Nanoco with our resources, we much have a focused approach to get the win. And frankly, as we've explained before, Samsung is 90% of the QD TV market. So the others financially particularly in the U.S., but the money might not even be worth it and get an injunction to stop someone selling 50,000 TVs. I don't know South Africa wouldn't be worth even trying to do. So that's our strategy, get the win on the single biggest target there is by far. And then once you've got that because, frankly, if you go to other people and you say, hey, my IP is valid. You need to stop infringing, they'll say, well, prove it because you haven't actually had a court case yet, and your IPRs are up for appeal. So why should we pay any attention to you. So we will get to them in time. The ideal outcome is you win Samsung and actually everybody else end up volunteers to surrender before you even have to fire a shot which is a plausible outcome as well. Next question, does Dow still have a working CFQD factory in Korea, and they still have a facility? And our understanding is it's been mothballed for some time. So I don't know how quickly if it could be turned on multiple factories do have a way of deteriorating equally sometimes get cannibalized for parts. But our understanding is, and certainly, our agreement with Dow is still in place, that, yes, they still have a facility. But whether or not they're spitting out to any CFQD assuming on the sample size, I couldn't comment on that -- excuse me. Focus on the organic business seems to be to get to breakeven. What's the size of the revenue opportunity a few years out? I think the reason we target breakeven is -- and there's almost 3 steps here. So step one is getting to commercial production, which if you didn't have any R&D or anything else, and it was a low use case might not on its own, get you to breakeven, so job #1. Our job #2, after you're in commercial production, get to breakeven. The reason that we highlight that is that's not our goal. That's not where we want to end up. But given the funding challenges the business has had over the last number of years and the fact that we still are loss-making, we still run out of money. That's a big, again, qualitative milestone or threshold to achieve. After that, then you can start focusing on more aggressively pushing out the volume. And again, I think we've explained that working a single shift in our Runcorn sensing facility can deliver anywhere between GBP 15 million and GBP 20 million a year of revenue with roughly 25% material cost, gross margins around 40%, 50% and healthy EBITDA numbers. If you can get to that sort of GBP 15 million, GBP 20 million revenue number on a single shift. If you ran Runcorn sensing 24/7, you're closer to GBP 100 million of income. And then on the display side, it's smaller, it's about 1/4 of that size at full volume loaded. So if it is running 24/7, you might be able to generate GBP 20 million, GBP 25 million of revenue. So clearly, there is a lot of upside after you get to that GBP 5 million breakeven number. We haven't set any targets after that, what would be a useful 3- or 5-year target. I think once we get into commercial production and certainly, once we're getting closer to that breakeven revenue figure, that's when we'd be revising targets because it would be easier to plan forward, plan further out and set, what we would see, as a sensible goal for a 3-year revenue figure after we've got to break even. But clearly, we'll be satisfied just with getting to breakeven the job then would be to push on and go further into the ecosystem, more devices, more customers. Simon L, I think, we've already addressed this. Will there be legal arguments of validity in the [ Texan ] trial or this has all been addressed at the PTAB? So yes, theoretically, it is possible that there could be arguments of validity at the [ Texan ] trial. But I think as -- I don't think I could have been cleaner. We only comment on risks that we think are material or that folks need to know about, and we haven't chosen to comment on those validity risks. So draw your own conclusions from that whether or not you think you should pay attention to it or consider it if we're not feeling the need to talk about it at length. Next question, will there be an RNS from Nanoco when there is visibility of production only when there's an official commercial order? I think that is going to be the latter and official commercial order without necessarily just hiding behind the rules. Inside information has to be sufficiently precise. I should tell you on its ancient history, but we actually had a contract signed by us with the U.S. customer 3 years ago for another product. If we did not start as visibility of production order, people would have got awfully excited. But the truth is 6 weeks later, the U.S. customer decided though I don't want to push forward, so I'm not going to sign it. So it's always a judgment when is something sufficiently firm because I don't think anyone would thank me for saying, yes, I'm really confident. I sound like other CEOs in other companies saying, oh, yes, this time tomorrow, we're all going to be millionaires or next month, there will be production, next month will be production. That's why we're using conservative or careful language around visibility of production. But when we get an actual commercial order, even if it's a relatively small one, because of the substantive importance or qualitative importance of us actually being in commercial production, I think it's reasonable to assume that there would be an RNS. We wouldn't be able to do any commercial production and not tell people. I'm [ Andrew L], has there been any further progress on the COVID test? And simple answer is not really. Again, we are focusing our efforts and resources, so we got through to a fully functioning prototype. We actually tested it against other pathogens. But again, if that one is going to move forward, a, if we have more financial resources then we might consider it; b, it's definitely going to require partners to go forward in that area because you're starting to move away from our core competencies around electronics uses and applications for our CFQDs. Then the next question is might be the last one, and I apologize for we're running with people. Simplistic, I know, but if you don't know how Samsung manufacture their dots, how can you know they are infringing your IP? Okay. You have to differentiate between us and our lawyers, between Nanoco and our lawyers, between Nanoco, our lawyers and our expert witnesses. The information inside each of their heads is different. So we can use all the available public information. And I'll give you an example. Samsung in their external presentations refer to something as a magic cluster, okay? And that's one of their key parts of making a cadmium-free quantum dot. We and our patents refer to something called a molecular cluster compound. Now everyone can say, the use of the word cluster, what exactly does that mean? So you can actually interrogate some of the publicly available information because no one actually publicly announces their full actual production processes, but you can get enough clues, you can get enough hints, you can get enough evidence on what they're saying publicly that actually you could legitimately infer that a magic cluster actually just is a molecular cluster compound but by different name. No doubt, that will be one of the debates that will happen in front the jury. But so I think that's answering your question. Clearly, you can't be absolutely sure. But by now, if Samsung had a recipe that meant that it was clear they were not infringing our IP, that would have been submitted. And actually, if we looked at it and said, well, it's obviously they're not. They're making CFQDs using marshmallows and sugar. Then you drop your case pretty quickly because you know you're going to lose. So the fact that none of that has come out through discovery, and we're still -- and your confidence in the merits of our case and our advisers confidence in the merits of our case that we'll go in front of the jury and ultimately, the jury will make the final decision on whether they have or they haven't. So I understand the rationale behind the question. And hopefully, those answers or comments I've made -- explained rather than to make it more complex or murky. And so with that, I think, is the end.

Brian, yes, absolutely. Thank you very much indeed for addressing all of those questions that came in from investors this morning. And of course, if any more questions do come through, we'll make these available to you immediately after the presentation has ended for you to review and then add any additional responses where it's appropriate to do so. Brian, perhaps before redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great.

Okay, [indiscernible] . So I think just to close, financial year '22, it was a big year for us. We knew we were going to have the PTAB outcome. Everything could abandoned on the litigation there, which would have serious implications for the value of our IP, the value of our display business, for the company itself. So that was a big deal getting through those IPRs and getting the outcome that we got. It was a big deal, the retail conference. It was also a big deal on the organic business, getting that full year contract extension from a customer. And again, if people are looking for signs of confidence, that's their confidence. So one, if they're confident we can be confident. So FY '22 was definitely a big year of lockup delivered. And FY '23, we've got even more to look forward to. The jury trial, when it happens by the end of this year, early next year. That is not the last hurdle. We've still got appeals, there's still stuff to happen. As I mentioned, this could drag on for a while, but that's going to be a big, big deal. And obviously, the further on you are and the more successes you gather as you go along, your position -- negotiating position, if you want to call it that, just gets stronger as you go. The fact that we are expecting certainly our products to be production-ready, we're still expecting to be in commercial production even if it's low-volume initial use case before the end of this financial year. So FY '23, if you like -- FY '22 was a big year. FY '23 is going to be a bigger year again. And our whole team is working hard to deliver in both of those, not just for the team itself, our internal stakeholders, but also for all of our shareholders. Thank you very much for your time today and all those questions that have been submitted.

Brian, that's great, and Liam, as well. Thank you once again for taking the time to update investors today. Could I please ask investors not to close this session, this shall now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. It's going to take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Nanoco Group plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.