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Location: Bavaria, Germany

I am a retired US Government analyst, currently residing in Germany. I am also a shareholder in the company called Integral Technologies (OTCBB: ITKG), and have a desire to enlighten and share its great and still emerging story. I am well read, focused and appreciate challenging interactions which spark creativity and develop enlightenment. That is why I created the ElectriPlast Blog, and the reason I am here.

September 29, 2006

ElectriPlast: When One Buck is Worth Millions of Dollars

On the surface,

a buck is a buck!

By Stephen

Special to the ElectriPlast

[EB Editor’s Note: There was a collective sigh of relief from Integral Technologies shareholders when the long-anticipated Heatron deal was announced a few months ago. Finally, we had news to validate our ElectriPlast technology. However, a quick review of the press release, turned “deal” to “dour” when the only mention of revenue was a $1 fee! The same thing happened when the Jasper Rubber deal was announced. One paltry US dollar! As the iconic singer, Peggy Lee, might croon, “Is That All There Is?” What kind of deals are these? How are they supposed to accrete to the bottom line? A supply chain specialist and expert on the manufacturing process gives us his take on the $1 “deals.”]

[EB Publisher's Addendum: There are two issues not mentioned in this outstanding article, both rest at the heart of the positive nature and key features to the $1 Licensing fee. If you don't mind, I would like to share my take on one of these features--you on your own will probably pick up on the other with no assistance from me.

Here it is, clear, short and in plain words: In entering into a licensing agreement with both Heatron and Jasper Rubber Company (JARCO), Integral wins access to not only these companies' client lists, but their sales forces, but I am getting ahead of myself. Being manufacturers (add with that a potential compounder to boot), this means that they are literally hubs of activity. Companies/clients with uniques interests are drawn to the hub to satisify their material and product needs. With the hub now offering ElectriPlast enhanced wares--Integral's IP gets instant recognition; ElectriPlast enhanced product readily gets into the clients hands--the supply chain is thus drastically reduced with ElectriPlast migrating to the market place through the hubs' hundreds of clients. Mull that over and let me know whether this was a bad deal or not. PK sends...]

Is a $1 contract really only worth one dollar?

In the wake of the recent announcements from Integral Technologies about the agreements with Heatron and Jasper Rubber, it is useful to shed a little light on these “deals” to help dispel the misinterpretation Integral shareholders have experienced.

In these two cases, a $1 contract simply indicates that Integral and their business partners have agreed to terms to produce ElectriPlast. But the one dollar terms of the agreement isn’t indicative of the future economic value of the relationships. The actual value of any contract with Integral is measured by a customer's consumption of ElectriPlast units (EU) as multiplied by Integral's price per unit. One EU could be defined as one pound, or one truck load, one basket full, or even one percent of the net value of a business partner’s single finished “widget.”

Since, at this point, there are no reported units of ElectriPlast being consumed by our new business partners (Heatron and Jasper Rubber), no actual contract value can be assessed or even projected. Furthermore, Integral shareholders will never see the details of contracts between Integral, Heatron and Jasper Rubber referencing a cost basis, since these specifics are proprietary and unique from business partner to business partner. Divulging this information to the public would put at risk Integral's prerogative to negotiate the best sales price with future business partners.

The inking of nominal $1 deals is not uncommon in the global raw materials/supply sector, so a $1 contract should encourage, not discourage shareholders. In fact, when two companies, Heatron and Jasper Rubber (whose combined market cap probably exceeds $250 million), announce that they retooling to produce ElectriPlast units, it is a source of great optimism.

And another optimist outlook is the "household" name company reportedly on the verge of being announced, hopefully, in the short term. This entity is rumored to be a Fortune 100 company, and a reality of the manufacturing world is that heavyweights are ponderous by nature and they always move more slowly than smaller companies.

Integral has 111 patents approved or pending, across every manufacturing sector. Their latest press release affirms they believe each patent represents at least one licensing agreement. And they continue to invent. What does the value of 111 licensing agreements look like? Tom Aisenbrey, the inventor of ElectriPlast, has stated that he is not even close to the end of inventing ElectriPlast products. In fact, in a recent meeting, he indicated three hundred patents or more are closer to his target.

So, does anybody really believe that these license agreements are worth only a buck?

What does the revenue stream of 300 ElectriPlast product lines being built by as many companies look like?

Clearly, a whole lot more than $300, to be sure


Anonymous Injection molding training online said...

Absoutely brilliant. Thanks for bringing these all together into one post. There’s quite a few that I hadn’t encountered before.

July 02, 2013 6:42 AM  

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