notes from the agm

Here are a few notes from Tursday's AGM.

For starters, there were more people there than last year. About 4 times as many.

The share registry is pretty impressive. There are some big hitters on the list who haven't sold their holdings, happy to sit and wait for the developments to actually take place.

My general feeling is that the sellers over this calendar year have purely been people ramped into the shares this time last year who got impatient, selling shares on no significant news, just market falls and lack of willingness to ride it out.

So, here's the (speculative) investment case that came out of the AGM.

KTE holds 8% of Mears Technologies. KYE holds warrants that gives them an option to go to 15% of Mears. KTE effectively hold 50% of the JV for the Solar technology.

If you go to Mears Technologies website you'll find a lot of information on their business, but essentially they have two businesses:

1. PV Solar Panel technologies.
2. Microchip Technologies


Dr Mears was at the AGM. He was an impressive guy, more of an entrepreneur than a straight up tech guy. He was with the new CEO he'd just employed. The guy's CV is excellent. His last role was at Texas Instruments where he effectively oversaw all their Intellectual Property. In that role he dealt with all the big Japanese chip and tech manufacturers.

Together they had just come from Japan where they undertook a series of meetings with those manufacturers. They said both the chip and PV technologies were received very favorably there. They were enthused (as management generally are about their businesses!). If both or either technologies get across the line they will have no problem getting them to market.

Here's what was said about the ongoing operations and testing of both businesses:

1. PV SOLAR PANELS

- PV recombination problems. Within the cells the energy was not passing energy through efficiently. Think about it like cars going down a road, only it's a bumpy road, which causes a few cars to crash. Not enough cars were completing the drive. What they are doing now is placing magnets on either side of the layers to assist efficiency. Sounded confident.

- If that works then a company in Japan is lined up to manufacture them immediately. If it all lines up manufacture will begin in Q1 next year.

- If it happens it is likely to happen fast.

2. SEMI-CONDUCTOR MICROCHIP TECHNOLOGY - MEARS TECHNOLOGIES

- Essentially, this is all about improving processing technology for PC's, laptops, phones, ipads etc. I.E. they are aiming to improve processing speeds and lower heat output (>efficiency)

- They are about to bring in their 2nd generation chips.

- Mears said that their 3rd and 4th generation chips, once produced, may trigger Mears to list on the Nasdaq. He said that he believes if the stars align this will make them a 3-4bn company by mkt cap. That is a massive statement. Take it with a grain of salt, but nonetheless not a claim I'd make if I were less than confident.

- The semi-conductor market worldwide is worth $100bn p.a. (presume he means USD but it doesn't matter really at the current ex rate - it's big)


CATALYSTS FOR KTE SHARE PRICE

1. Successful PV Cell technology results leading to immediate manufacture (optimal date for go ahead: Q1 2012)
2. Successful Chip technology. This is likely to be the biggest re-rating trigger.

If Mears is correct and catalyst #2 materializes and Mears lists to become a 3bn mkt cap company, KTE would own 15% (not allowing for the 50% of the solar business). That would, in theory, translate to KTE having a market cap of (15%*3bn = $450m). It's current mkt cap is $7m.......... I'd take 10% of that!

Still speculative at this stage but massive upside potential.

DYOR