1. What We Make

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• 1. What We Make 
• 2. Market Opportunity 
• 3. Competitive Advantages
• 4. Threats Risks   
• 5. Investment Proposition

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APPLICATIONS
Market Opportunity

• Authentication anti-counterfeiting tags (CDs,
  packaging, fabric, documents, currency...)
• Electronics LEDs, displays, photovoltaics, etc
• Life Sciences diagnostics, biological sensors,
  drug delivery, etc

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MARKET DEVELOPMENTNanoco projected activity
by segment
Market Opportunity
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MARKET DEVELOPMENTNanoco projected revenue
by source
Market Opportunity
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SALES ACTIVITY IN EIGHT WEEKSSTART POINT
Market Opportunity

• July No product. No Web site. No staff
• Aug Oct Intensive production testing
• Free Evaluation Sample program
• Automated enquiry Website
• 1 press release NanoSig Global 2000

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SALES ACTIVITY IN EIGHT WEEKS
Market Opportunity

• RD/LicenseDiscussions
• Oak Ridge
• Innovision
• Cal Tech
• UK Ministry of Defense
• Samsung
• Matsushita
• Biocode
• BMW
• VW
• Securency
• (More)

• Evaluation Samples
• NASA
• Oak Ridge National Lab.
• Nanosys/QDot
• New Light
• Cal Tech
• Southwest Research
• Peking University
• QinetiQ (UK MoD spin-out)
• British BioCell
• Dept. Biophysics, Hungary
• (More)

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AUTHENTICATION
Market Opportunity Sales Discussions in 8 Weeks

• CDs, cigarettes, currency, clothing, packaged
  goods, fine art......
• Billions of lost tax rev. taxable profits
• Many billions of items
• 0.025 to 0.3 cents per tag for NanoDots
• 25,000 - 300,000 per million packages
• Plus license fees on turn-key solutions

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ELECTRONICS
Market Opportunity Sales Discussions in 8 Weeks

• Photovoltaic portable devices
• Photochromic materials
• Plastic solar cells/roofing tiles
• Plastic light emitting diodes
• Flat screen displays

Smaller quantities but higher margins than
authentication
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LIFE SCIENCE
Market Opportunity Sales Discussions in 8 Weeks

• Measuring cells immune receptors
• Tagging monoclonal antibodies
• Colocalization measurements
• Simultaneous molecular tracking
• Very small quantities higher
  margins

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NANOCO PROJECTED REVENUEBased Only On
Discussions To Date
Market Opportunity
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COST MARGINS
Market Opportunity

• Very significant margins in RD product
• Very significant economies of scale
• Excellent production yields
• QC cost flat up to 100 gm batches
• High volume QC process underway
• Good fee license prospects

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COMPETITIVE SCENARIO
Market Opportunity

• Applications builders making dots 
• Nobody focusing solely on our space
• No infringing scalable methodology/IP

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COMPETITIVE ADVANTAGES

• 1. INTELLECTUAL PROPERTY
•  
• Patents granted in U.S. and E.U.
• (s. 09/043,258 96927134,5)
• Only extant method of making production volumes
  of dots.
• Various additional/divisional patents in process

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COMPETITIVE ADVANTAGES

• 2. FIRST MOVER ADVANTAGE
• Nanoco is the most successful entrepreneur in
  the formidable task of developing and
  commercializing Quantum Dots.
• NanoAnalytics, Los Angeles, CA, Oct 2002

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Many labs in China show much interest in QDs'
application in biology and other areas. But there
was no commercial products supplied before
Nanoco. I  think China market is large and the
commercial opportunity is attractive.Yinlin
ShaDept. of BiophysicsPeking UniversityNov.
1st 02
COMPETITIVE ADVANTAGES FIRST MOVER
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COMPETITIVE ADVANTAGES

• 3. MANAGEMENT TEAM
• Science/research PLUS business/marketing
• 300 papers on nano-particle synthesis
• Significant start-up business experience
• Sales presence established in U.S. and E.U.

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FOUNDER PROF. PAUL OBRIEN
COMPETITIVE ADVANTAGES TEAM

• Head of Chem. Materials Science, Manchester
  Univ.
• Most published scientist in nanoparticle
  synthesis
• Inventor of patented single pot production
  method for NanoDots
• Avalailable 20 100

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CEO IAIN WOOLWARD
COMPETITIVE ADVANTAGES TEAM

• Multiple tech. launches
• 25 yrs in Silicon Valley
• Extensive marketing (ex. Saatchi, etc.)
• Bootstrapped own 65MM business
• Good global experience
• On 4 person mgmt. team on 800MM rev IPO 18
  mth. start-up

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EXCELLENT SCIENTIFIC TALENT POOL
COMPETITIVE ADVANTAGES TEAM

• Univ. of Manchester 27,000 students
• University is Nanoco shareholder
• Highly talented post-doc nano-group
• Highly international/Asian
• Relatively affordable
• Highly available full time/part time

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COMPETITIVE ADVANTAGE

• 4. SUSTAINABILITY
• World-class nano facilities from existing
  shareholder (Univ. of Manchester)
• Very low burn rate
• Revenues ( profit?) lt 6 months...or
• .... we can wait it out.

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COMPETITIVE ADVANTAGES

• 5. SCALABILITY
• Only proven scalable methodology
• No significant financial barriers to scale

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THREATS RISKS

• Profitable apps may materialize slowly
• Alternative scalable method may lead to
• Race for market share price war
• Corp. giant might assault our IP

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INVESTMENT PROPOSITION

• Q1/Q2 2003 Seed of 500,000
• (Possible Q4 2003 Series A/Final)
• Seed Convertible Preferred
• 3 year loan _at_ 18 compound a.r.r.
• Possibly semi or wholly secured
• Extensive warrants for upside
• Controlling interest upon default

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ADVANTAGES TO INVESTOR
INVESTMENT PROPOSITION

• Low risk debt instrument
• Fair annual return locked in
• Liquidity locked in
• Lots of upside with warrants
• No argument over valuation
• Control in case of default

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USE OF SEED FUNDS
INVESTMENT PROPOSITION

• Grow global sales
• Optimize economies of scale
• 2nd generation nano-particles
• Extend IP on production methods

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SUMMARY
INVESTMENT PROPOSITION

• Affordable
• Diversified bet across multiple apps.
• Low risk investment vehicle
• Revenue/profit ready
• Powerful IP position
• World-class/world-wide team

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CONTACT DETAILSIain Woolward,
CEOIainwoolward_at_nanoco.biz408 718 4457