I sent some questions to Vivid a couple of weeks ago but it got diverted into a junk mail folder by a spam filter. The response finally arrived today:
--------------------------------------------
I am a VIV investor and I would like to get a better understanding of the company. I would be grateful if you could answer some questions I have about the both the NCF and lighting sides of the business.
NCF
- Could NCF units process the exhaust from a coal fired power station smoke stack or would there be too many particulates for that to work?
In this case, it would likely use the exhaust post scrubbing / cleansing, where the key requirements for NCF are the CO2 and the excess Heat. Along with H20 in the process.
- Could the NCF units extract normal atmospheric CO2 efficiently enough to take advantage of carbon credits?
If CO2 was already captured our of the atmosphere at a financially viable cost, then yes, NCF could process it. However the likely cost versus potential carbon-credits is not the most commercial opportunity to focus on in the near term.
- Is the figure of 250kg/day per unit just when processing pure CO2? What affect on efficiency does processing CO2 from various real world sources have?
Yes, 250KG of CO2 per reactor. A full scale site may well have 100’s of reactors.
Further to the CO2, the process requires H20 and ~800c of heat to disassociate into streams of CO + H2 and O2.
NCF’s technology requires a clean stream of CO2 which is cleansed via upstream CO2 capture technologies (already in existence)
- What value, monetary or otherwise, is Vivid getting from the agreements with Sinopec? For instance, an amount for each unit sold or getting back detailed manufacturing process blueprints for possible use outside of China.
I would refer you to the announcements re the LOI and Terms Sheet. Finalising an agreement (including the monetary splits etc.. is included in this final document). The is the next step the team is working on.
The agreement is between NCF and Sinopec. Vivid Technology is effectively a 33.33% shareholder of NCF as outlined in our most recent reports.
Vivid
- It appears from the figures in the quarterly that increased revenue is being eaten by increased costs. For instance, the projected costs for current quarter would not nearly be covered by a revenue like that of last quarter and looks like it would eat through cash reserves. There were no revenue projections for the current quarter. Is the higher projected manufacturing costs listed in the latest quarterly due to provisioning demand from contracts such as the new Hong Kong Kerry contract?
We are not providing guidance of revenue at this stage of our business and the 4C does not require that in its pro-forma.
Manufacturing costs are indeed variable with revenue and we do expect that whenever higher sales are expected, manufacturing costs would be higher.
- Are the manufacturing costs mainly for the Matrixx units/system or does it also include other manufacturing for the Ilum-a-Lite business?
Manufacturing is predominantly for Vivid Industrial product ranges (including Matrixx), rather than Vivid Ilumalite products.
- Is there scope for cost savings by consolidating manufacturing operations between Vivid Industrial and Ilum-a-Lite (if applicable)?
At this point no given the nature of the products, however we review this regularly and are looking into opportunities via smart manufacturing and our relationship with the CSIRO and international partners.
- The Matrixx lighting system sounds interesting. Can you provide more technical details on how it works? Such as how its all logically and physically networked together (Wifi, Ethernet over Power, are lights individually addressable or is it done in banks etc.) and how it is controlled (software involved, Centrally, Remotely?).
Good questions…. We actually have a brand new website for Vivid Industrial going live in the coming weeks which will explain a lot of that. The Matrixx system is extremely exciting and world leading across its design and level of savings and “simplicity in sophistication”. It is modular by design (effectively a system, not “lights”) and due to the design, we currently have options for our customers which cover:
- Communication via Wifi, cabling and/or various sensors (heat, motion, day-light, infra-red etc..)
- Lights are both individually addressable along with grouping/banks or other preferences depending on customer needs / requirements
- Post commissioning, is controlled autonomously with manual over-ride / intervention as chosen/required. This is via an internet portal (via 3G/networks etc…) which we can provide varying levels of access to customers site (facility manager, HQ (CFOs, Property Manager etc…) and Vivid Industrial who can service, maintain and oversee from any of our offices.
- Once “on-line” the site can be monitored and maintained from anywhere in the world that has connection to the internet.
We have attached a reasonably detailed brochure FYI, along with a case study
---------------------------------------------------------------------------------------
Maybe the last question about Matrixx won't interest everyone, but I for one find technology exciting in general and the Matrixx system does seem to be well designed product.
To summarise the points more relevant to share price, I guess we will just have to wait for the next quarterly or two to see if the increased costs are indeed covered by corresponding increased revenue from orders.
Also, it seems NCF talks with Sinopec are still progressing towards finalizing a material agreement.
Good to know Vivid are responsive to shareholders.
Thanks to Samuel Marks for taking the time to write back.
