Dotz Nano (ASX: DTZ) has clinched an exclusive three-year distribution and sales agreement to sell US$15 million of its graphene quantum dots to joint venture vehicle China Israel (hengqin) Science Technology Innovation Center.
The company’s 100%-owned subsidiary Dotz Nano (Israel) secured the contract which will generate at least US$2.5 million this year.
Pending product specification approvals, China Israel (hengqin) Science Technology Innovation Centre, also known as CisticPoly, will distribute the graphene quantum dots into China.
Subject to approvals, in the first 12 months, CisticPoly will purchase at least US$2.5 million in graphene quantum dots, with the second milestone comprising purchases amounting to US$7.5 million within 24 months and US$15 million by 36 months.
“China is an extremely attractive market, with many applications for our graphene quantum dots such as anti-counterfeiting, brand protection, counterfeit product liability protections, chemical distribution and more,” Dotz Nano chief executive officer Dr Moti Gross said.
“CisticPoly is a natural partner in this commercialisation process due to its expertise and connections in China and Israel, and its ability to initialise and commercialise our graphene quantum dots with various major companies in China,” Dr Gross said.
He added CisticPoly and Dotz Nano had already made contact with several prospective companies in China including Sinofaith, Sinochem and Sinopec which could be a part of the commercialisation process.
“I cannot categorically state whether these negotiations will develop into sales agreements, but, in my opinion, we are implementing every effort in order to succeed,” Mr Gross added.
Additional contract terms include 10 million option issue at A$0.50 each after achieving the first milestone. The parties will investigate establishing a joint venture graphene quantum dot manufacturing facility in China after 24 months, and the contract will automatically be renewed for 12 months and can be terminated by giving 90-days writing notice.
“As stated in previous announcements, Dotz Nano’s commercialisation process is accelerating with countless negotiations on implementing and purchasing our graphene quantum dots – this distribution agreement is just one of them,” Dr Gross said.
In early November, the company reported its first major graphene quantum dots sales order worth A$135,000.
The dots are microscopic particles that fluoresce when exposed to UV light. Using primarily coal, Dotz Nano develops the graphene quantum dots for numerous industries including medical imaging, sensing, energy and data storage, solar cells, consumer electronics, optical brighteners and ant-counterfeiting.
By mid-morning trade, Dotz Nano’s shares had soared more than 20% to sit at A$0.22.