Advanced Metallocene Catalyst Market Overview

Obviously, you know, the team already got all the questions. I don't know if we need an essay to do full introductions for everybody, but obviously, you know, Rich and the team can introduce themselves to some of the new faces here. So, Jeff, why don't you, what about this one? Actually, we already know very well, so I just introduced A&M.

Yeah, uh, A&M, why don't you start, uh, introduce yourself and we're going to start the sessions. Good afternoon, gentlemen. Um, we are Alvarez and Marcel, uh, from the advisory team of WANIC. And today I'll be, um,

leading the breakout session, if that's okay. And I'm aware that our questions went through and it was quite a lot. So what we did was we narrowed down the questionnaires into... Leo, why don't you introduce yourself one by one? Actually, it's better who you are to the management team.

Right. I'm an associate at Alvarez and Marcel, Korea, the Seoul office. And I'm here besides my team with Lee Il leading the project. Okay. So Chris and Jim Jason, actually A&M, now they're working on the commercial due diligence. This is our first step. So they will ask some more like in the market and the competitions and so on. It might be similar to what we asked previously, but actually from the point of their standpoint, they may be asked some questions.

It takes, I think they ask you three hours, but we actually set up to two hours. So I think it takes me a long time. Yeah, Jay, that sounds great. We need to follow up with another session after this one. We can do that. But we prepared some materials because based on the...

questions and how they were asked, especially around the catalyst segment, we feel there's some misunderstandings about definitions of segments within the catalyst arena, as well as how the value chain works. So we've got like three or four charts to go through to kind of explain that. And then I think that'll help round us and maybe they'll make the questions go a little quicker.

Okay, that's great. So I'm Rich Fraziati, CEO of World Scientific. Here with me is Jason Lewis, who's a CFO, Jim Gioletto, who's a Chief Commercial Officer. And Jim's going to walk us through those charts. Sound good? Okay. Okay. All right. Okay.

Thank you, gentlemen. And I'll just to get started, I'm going to share my screen. We can see your PowerPoint now, Jim. Great. Great.

I'm just going to try to put it into presentation mode so it's a little easier to see. Okay. I think we wanted to start with some description of the sub-segments within our advanced catalyst segment.

And one of the first questions was around the differences between metallizine and advanced metallizy. So we thought, first and foremost, the pictures would be helpful. And I'll talk through some of the differences along the dimensions that were requested of us.

So, you know, start with metallocenes. These are single site catalysts, usually group four transition metal structures. And the key point is they're usually either bridged or unbridged CP or indenoligens.

So you can see the CP ligand here on the metal, for example. This is a bridge structure. So this is really the type of structure that's in our metallisene subsegment. And I think it's really the chemistry and the structure that decides whether it's in the metallisene or advanced metallisene.

In the questions, this was referred to as commodity metallocines, and it is true that this is an older technology. However, there's a fair amount of innovation that continues in this space. The innovation is usually around novel ligand design.

So while it is an older technology, it's generally far from commodity in that there's still a lot of innovation and new materials happening. Two things to add. One, to that point, we're still getting disclosures a few a year from customers around new metallicyme structures. And then secondly.

even some of the very old metallisines still have very good margins, ones that have been around for 25 or 30 years. I'll just take this step by step, so I'm going to talk about the catalyst structure as we go. So the advanced metallisene are newer generations, and you'll see that there is actually not a –

CP or an indemnal ligand attached to the metal center here. These are often referred to as post-metallicene structures by chemists, for example, but they're broadly grouped together in metallicene chemistry from an industry standpoint.

So they tend to be more complex in their ligand structures. You can kind of see that in the example structure here, often requiring six or more synthetic steps to make these materials. So generation polyolefin performance, that conventional metallic, for example,

They can do to create polymer resin so that the plastic can be engineered, for example, to provide perhaps with less resin material. So accomplishing some of these down requirements that our customers have.

key differences. When you look at the applications, there's actually a fair amount. So, metallizines, they do find some applications and some special ethylene applications, and they have polypropylene and even elastomers and plastomers. So, you see similar applications, usually more different applications for polyethylene, polypropylene, some newer grades of linear low-density polyam

So a fair amount of overlap there. The customer base, there are some differences here. The metallisines being an older technology has a broader customer base. We have more mature catalyst sales that go to global polyolefin makers around the world.

In some cases, the metallicy that was commercialized sometimes over 20 years ago was under patent, but has subsequently come off of patent and we're finding other customers that are adopting those metabolices. For example, over the last

one to two years, we've been growing our business in China with some of these older metallisene catalysts. However, as mentioned above, there's still innovation in this space, and we are still getting requests for customer-specific metallisene catalysts that have been recently developed, often under patent and

customers are coming to us with newer metallis and catalysts. The advanced metallisines tend to all still be under patent. It's much newer technology space, and it's typically tied to customers' proprietary resin development programs, where Boulder Scientific is one of the – as probably the premier technology,

partner for these global polyethylene manufacturers or polyolefin manufacturers, they come to us to help them scale up their new advanced metallizines. So on the pricing side, I'll start with the advanced metallizines. They tend to be higher average selling prices and gross margin, reflecting the proprietary chemistry synthesis complexity and sole source positioning.

Newer products are often commercialized at very high initial prices. And then as we're able to scale the product up and reduce our costs, we can pass along lower costs to our customers. They are able to pay a higher price because they get better performance. But there is a limit, of course, to the pricing.

The metallisines are more mature. Some of the more mature ones are subject to more competitive pressure. There's a periodic negotiation on the pricing. We do find opportunities to be a second source in some cases and one of the ways we're gaining share is by winning second source positions on these more mature metallisines.

There are newer metallocines I mentioned. Customers are bringing new specific catalysts to us, and those new metallocene products tend to look similar in pricing to the advanced metallocines. Specialty versus commodity characteristics. The metallocines, as I've discussed, are more mature. There's often multiple sources. They are still highly specialized, high-margin products, so

I suppose a commodity, it depends how you define commodity, but in some senses, they're far from a commodity. Whereas the advanced metallocines tend to be customer proprietary, sole source, and there's a high switching costs. Lastly, in terms of manufacturing processes, the metallocines tend to be well-established synthetic roots, optimized over decades of commercial production. Having said that, I think Boulder Scientific does benefit

from some of the accumulated knowledge. The basic synthetic route is in the public domain, but how you do that at scale, how you do it profitably and reliably and safely is where some of Boulder Scientific's intellectual property around developing robust processes come in.

Jim, I just want to clarify, a lot of the comments you're making about metallizines are related to the metallizines that have been in the commercial domain for many, many years. Those comments don't necessarily apply to new metallizine disclosures, which act more like the advancement. That's correct.

So just finishing up the advanced metallisines, as I've mentioned a couple of times, they're novel multi-step routes that are usually based on customer-provided molecular targets. They, in some cases, may have a lab procedure of how to produce these, but we rarely use that lab procedure because it's simply not something that is amenable to scaling up to metric ton quantities.

So that's where our novel IP tends to come in is what are the specific processes and steps necessary to do this at scale. So I think there was in the questions, there was an assumption around advanced metallizines being on a support system.

and metallisines being unsupported. But the real difference between metallisines and advanced metallisines is the chemical structure and the differences. So I'll stop there and see if there are any questions. - So thank you for the explanation. So from what I've just heard,

but there are no differences in the segmentation by use cases. So it's different by chemically, but not by end product manufacturing. Is that correct? I think that's fair, although I would say that

the majority of POEs and POPs, polylephen elastomers and polylephen plastomers and specialties use advanced metallisins. Some are made from metallisins, but the innovation is all happening with advanced metallisins. Okay.

Thank you for your explanation. My name is Il. I'm leading CDD project. Thank you for sharing your time, gentlemen. I have one question. Is there a specific reason why advanced metallocene is a single source of supply? Is it because of contractual agreements or corporate capabilities or something else?

Are they single sourced? These are new disclosures by our customers. Our customers design these molecules and they come to us to scale them up with them. In many cases, they may be on patent with a specific customer, the customer owns the molecule or they're a trade secret for that customer.

Yeah, I think, honestly, the statement should be the majority of them are sole source. Yes. What we've seen in the marketplace is generally, and we've discussed this with Wannick in the past,

Our customers are coming to Boulder Scientific first, and we're getting new customers all the time turning to us because we have the reputation of being the best partner to scale up. Even with these advanced metallizines, we are seeing in some cases where it grows to being a five-year-old.

or $10 million business for just one catalyst that they do seek to bring in a second source. They are sometimes successful at that, but it is not easy for our competitors to scale up. But we do see some cases where there is a second source for these advanced metallizines. So they are not all sole source.

but many of them are. And remember, our portfolio of catalysts is very broad. So there are many catalysts that never get to that volume level where it either warrants the customer to bring a second supplier in, nor could they get a second supplier interested because they're not.

there's not enough volume to do the development work to justify being a second source. Thank you. Hi, this is Hyun Joon from A&M. And can I ask you about one more question? Sure. Yeah, thank you. Well, you know, in your material, just a key application, LLTPE,

especially refer to MLTPE or does it include the broader LLTPE market as well? So I think this really should say M before the LLTPE. Yeah, right, right. Yeah, that's a typo.

Okay. We have, there was one of the questions, I'll say more than 95% of our business goes into metallisene grades of resins. We are a metallisene manufacturer.

One of the questions was around the segment. We're discussing two segments here, advanced metallocene and metallocene. We also have a co-catalyst and other and supported catalyst. I think we'll discuss that. But what I wanted to mention was...

There was a question around how many of the co-catalysts are borates and what are the others? The answer to that question is 70% of co-catalysts and others are borate or boron-related co-catalysts. The other 30% of that subsegment are other...

Organometallics, it's a small part of our business, but we believe that may be used in Ziegler-Nada formulations. So there is a very small portion of our business that may support non-metallicene catalysts, but again, 90-95% of our business is going to metallicene resins.

Thank you. And can you give more detail about some specialty HDPE? The reason I ask is that our understanding is HDPE has historically been produced using Siglo-Nata catalysts.

So that means overlap with single-nature catalyst and metalosin catalyst in HDPE. There are, we labeled it as some specialty HDPE. So there are some innovators and licensors of technology, of

of metallisene technology that have some, have technology for bimodal HDPE for pipe applications, for example. And they are competing with Ziegler Nodd technology.

One of the benefits of their technology using metallocene are lower capital costs associated with that. So you are correct, a majority of the HDPE is served by Ziegler NADA, but there are some people innovating in metallocene catalysts and metallocene grades to serve some HDPE applications.

Thank you. Yep. Let me stop sharing for a moment and we'll pull up some other visuals. I am going to take a... So one of the next questions on the list, and I'm just going to the...

In fact, I can share it here.

We thought we prepared some slides around the value chain. This question number two. If I've answered the first question sufficiently, appreciate confirmation of quantum business model across the value chain, particularly recipe development, production of catalyst components,

finished catalysts and where we participate. Yeah. I think we should do that. They said they've kind of scanned their list. So let's present that and then we'll turn it over to them and ask their questions. Okay. Okay. So let me pull up the next slide then on that.

Are you able to see my screen? Yeah, we can see it, Jim. Why don't I start trying to talk to you, and you can chime in. So what we tried to do, based on how you worded the questions, we felt that maybe there was a little misconception about how the industry actually works.

So there's three dominant technologies around that. The three technologies where you see metalicine and advanced metalicine play in polymorphine manufacturing or solution, slurry, and gas phase. So in every one of those, whatever the metalicine catalyst is,

the catalyst supplier owns the process technology to make the catalysts. Whether it's us or Grace or Norion or whatever, we own the process technology. The molecule IP, the actual design of the catalysts, like the physical structure, the chemical structure of the molecule,

is owned by the polyolefin manufacturer. So then we wanted to show, okay, where do we participate from the perspective of that supply chain? So we participate, and then further, let's delineate the difference between solutions to learning gas fields.

So, um, the tallisines are used in solution phase with a co-catalus, right? And those co-catalus are mostly boron-based. Once you've produced a metallisene catalyst and put it into solution, so typically they're sold in 5% active in a solution of solvent.

It is a finished catalyst. It's not activated, but it's a finished catalyst. There's no further refinement of that to make it a finished catalyst. We sell the metalisene or advanced metalisene plus a co-catalyst separately.

And then the polyolefin manufacturer introduces the catalyst and the co-catalyst into the reaction process in a ratio that is their proprietary know-how and how to drive the resin properties that they want. But it's not like there's somebody else that is transforming the reaction process.

the catalyst in solution plus the boron co-catalyst into a finished catalyst. Does that make sense? - So the NA is not applicable. - So it's not applicable to put it in final form. Now let's go to gas phase, right? So in the gas phase, the ownership of the molecule IP and the catalyst process IP is the same.

But then the catalyst is, so if we were participating in the genetic catalyst that's used in the gas phase, it is activated with a co-catalyst that could be NAO or NAC.

aluminum alkyl. We do not supply that. The catalyst needs to be put on a silica support if it's used in gas waves. We do that. We do that in conjunction with a couple of customers. Then once the polyvalorion manufacturer uses the catalyst, they will activate with

Many polyn olefin manufacturers put their metallisin on support by themselves. For example, customer number two does all of their own supportation for the bulk of their gas phase catalysts. I would add they have turned to us for some of their newer catalysts.

which we develop the metallicy and then we put it on a support for them as well. So it varies by product and by customer who does the supportation. - So now let's go to slurry or slurry loop, right? Everything's the same.

But a slurry loop system is kind of part gas phase, part solution phase, right? So there are metalicine catalysts that are used in the slurry loop process, right, as solution. They never get put on support. There are other metalicine catalysts that are used in a slurry loop process that are put on services.

And then if you look at, I think we talked about this in the previous charts, solution runs the gamut from linear low density, metallizing linear low density, to polyolefin elastomers and polyolefin plasphemers and specialties. Slurry loop is mostly HDPE, some LDP-4.

linear low density PE and then gas phase is LLDPE and some HCPE. You do not make specialties with either of those other technologies. I go further to say if a delineation around solution is a lot of the innovation that's happening in the polyethylene industry

The polylefimplastomers, elastomers, polypropinistry is happening in solution. Because that's where you see the most advanced catalyst structures to drive resin prop. Any questions? Anything to add, Jim? Maybe we've got an extra.

So we picked the three biggest players in the industry and we tried to show what are the attributes and competitive positioning of each of the players, right, as it pertains to supply intelligence and intelligence. So none of the big, you know, we...

We feel that we compete the most with Norian and WR-gress. None of the three of us do metallicy molecule development. That means we don't design catalyst architecture to drive resin properties. Some of our PhDs probably could do some of that work, but that's not the business model.

That expertise lies with the polydolophane manufacturers. From a metallocene process development and manufacturing standpoint, we rate ourselves as the leader in the industry because we practice the most complex chemistry.

and build the most complex molecules. We'd say Norion is second behind us, followed by Briggs. The reason why Grace is third, Grace focuses on high-volume metallicymine used in gas fields technologies. Aluminum alkyls, which is a...

Sorry, boron co-catalyst, which is an activator predominantly used with mechalicines. We're the industry leader there, followed by Grace. Norion really doesn't make boron co-catalyst. Aluminum alkyls, right? This is the commodity supply of MAO and other aluminum alkyls used as activators.

Grace and BSC do not play there. Norion is a leader. Another leader there would be the piece of album oil that's still part of album oil that didn't get sold when they sold the refining cattle business. It's predominantly plant and passively kill. Longstance is another player that makes new LMAO kills in LMAO.

Silica, right? So silica is what you put the catalyst on support. Silica is the support whose grace is a clear leader in silica. They have a lot of business activities around silica outside of catalysis as well as being catalysis. BSC and ORAM do not play in silica.

When we support a catalyst, we are buying the silica from somebody else in the industry, or a customer is buying the silica and sending it to us and we're providing a toll service with the valance in our catalyst. So from a supporting catalyst standpoint, Grace is the leader in making supporting catalysts, followed by Norion.

And then followed by us, Norion does not compete in the supported catalysts. They don't have that capability. So one thing that Grace does that nobody else does as far as Norion and VSC is they provide supported catalysts designed technical support.

So if a customer has a catalyst that they want supporting, they will help that customer come up with the package to put the catalyst on this. It's part of their business model. This emanates from Grace purchasing the Nunapol polypropylene catalyst technology many, many years ago. And they've gravitated and built that capability into that.

the polyethylene capabilities. I might add here just a differentiation, Rich, is that the metallisene molecule development, which is often the key to the performance of the catalyst, is not an area that graces

They're not. This is generally the polyolefin manufacturer themselves, the R&D departments of the Exxon Mobiles and DAOs of the world. What they will collaborate on is how do you put it on a support? Right. And it depends by the supply. So beginning about customer two, right?

Customer 2 does their own majority of what they do, they support their own panelists. So they don't need that capability for race. So it may be smaller, less advanced companies. So what's not on this page are some of the licensing companies. There's a licensing company called Funnovation.

that licenses catalysts and polyolefin technology. They don't make the catalysts, they buy the catalysts from somebody else and they license those catalyst technologies around the world. A lot of that tends to be gas phase, but some of it is solution phase. - So Rich, I have a question to Sister H.

Yeah. Yeah. Actually, you explain what differences quantum and grace in the area, the actually capability perspective, also business perspective. Previously you mentioned you are more focused on advanced metal ocean because your business model actually designed for that. Here I have a question. If you move some.

the business area like integration or commodity metabolism. Why you didn't enter the market because they're already bigger, even the lower cost rate. And what do you need more from now to enter that market? - Yeah, so I mean, look, our business model emanated from our longstanding relationship with customer one.

Customer one is a predominantly solution polyethylene manufacturer. They are the industry leader in terms of resin property and driving specialties in the marketplace. So we got into supporting Catalyst with another customer, one of the licensing companies.

technology companies asked us to, they co-invested with us to develop the capability to put Calisense. We have the capacity, we have a lot of excess capacity, and one of the things we're trying to do is develop more business around that supportive Calisense business. So what we lack that Grace has, right, is,

is we don't have the internal resources that design supported catalyst systems. Right? What is the, you know, we practice that supported catalyst technology with IP that we get from other parties. So for us to get much bigger there, we're going to have to invest in some

R&D people and some equipment to help us to be able, we don't have a small unit to do supported catalyst trials. We'd have to invest in that. We'd have to allocate a couple of R&D people to doing supported catalyst development work. Chris, I don't know if you'd have anything to add there and what capability it would take to build a much bigger business around supported catalysts.

Yes, certainly the knowledge in supporting catalysts. That's something we'd probably want to hire externally for to build that capability. But it's not only the knowledge of putting the catalyst on the support, it's the characterization of the catalyst and then ultimately in situ reactor testing to show that the catalyst we're making does perform.

as expected. If I could add, I think we've pursued an alternate model, which is our, part of our business model has always been very close collaborations between our R&D departments with the leading polyolefin producers in the world.

So those companies that already have a technology for putting a supporting catalysts, you know, our strategy has been partner with them, make the metallocene for them and then partner with them to, you know, essentially license us.

to practice their technology for them to put it on a support. So we're not percluded in participating in that broader metallicyne-supported catalyst market

For example, we're selling a lot of those metallicyms to customer two, but they're supporting it themselves because they have more than enough capacity to support the cadres themselves. OK. Thank you. Just furthermore, so we're going to talk a little bit-- there's a lot of questions about China.

So we're actually working with a number of petrochemical and polyolefin manufacturers in China to help them commercialize metalluricin grades of polyolefins. We're also working with a supportive catalyst and licensing firm in China to supply them with metalluricin catalyst-based support.

So we're supplying the metallics. We're supplying the metallics. And they're doing this. And they're doing this support. And they're working with the customers in terms of developing that supported catalyst architecture to work in the customer's reactor. Now, it's interesting. That customer doesn't want to work with – they want to work with a less-going metallistine supplier because they're concerned about IPs.

I know this is a bit tough question to answer, but could you give us a rough estimate of how much investment is required to do such things you mentioned? Yeah, I look at the capital investments.

large, right? I mean, to develop a, you know, reactor testing and small scale supported catalyst manufacturing capability, or just you could run trials, small level trials, you know, it's less than a million dollars. Chris, what do you think the resource is?

requirements would be small team of some sort. Yeah, I was going to say, if you're serious about this, it's probably a team of three to four people, I'm guessing, between not just the synthesis in the lab, but also characterization and testing. So somewhere between three and five people, I would say, to be really competitive.

Thank you. And then I think we have one more chart here. This chart? Yeah, so this one just and it just shows the positioning with, you know, each of the suppliers and, you know, where they. Where they, what what polylephane manufacturing technology they serve the best. So no, no doubt, you know, not not unexpected. We're we're the leader in in.

in solution, right? Followed by Norion and then Grace. Grace is the leader in gas, right? And then followed by us and then Norion and then in slurry, you know, we feel we're slightly above Grace and Norion. Thorometallicine in slurry. All right.

Right. Just because you're showing this landscape, what's the core competitiveness over the two other companies, Grace and Norion, within this category? What differentiates BSE from Grace and Norion?

Yeah, I'll answer and then I think Jim and Chris will probably answer. It's clearly the chemistry capability that we bring to bear and the complexity of the molecules that we can make and have made for many, many years and the willingness to take on a lot of this really complex chemistry and scale it up.

I would agree with that. And I would contrast that with Nurion has more recently started a small, it's a very small part of their overall business. Aluminum and Alkyls are their major part of their business, but they have a small unit that's focused on custom metallicy.

I think GRACE has largely been focused less on novel metallicy development, chemistry development, and more on leveraging their experience in supporting catalysts. And so hence, you know, they have a good reputation in the gas area. That's an area where we think we've taken some share from GRACE and an opportunity for share growth. But that's GRACE is really leveraging their expertise. there.

Just a follow-up question on that is, is there any possibility that this landscape can change where, you know, BSE takes over the strengths of Grace and Lurion or vice versa? I don't think we ever take over Grace.

In terms of the capability that they have, I think we can make some inroads, no doubt. With respect to Norion, I don't know if we're not going to become an aluminum alkyo manufacturer, right? And that's a commodity space. And that's where Norion is more prevalent than the rest of us.

I think we're generally, what's changing is we're generally gaining share. As one of the questions or embedded in some of the questions was that the consequences of more investment in China.

And much of the investment in polyolefin manufacturing, polypropylene, polyethylene is more commodity grades of the resin. And it's driving the industry, particularly Western manufacturers, to find more differentiated grades of plastics. And they're generally turning to metallizines.

And in general, that's pushing more people towards bolder scientific. A good example is customer number two for us, who has had a long history of strength in gas phase. And they are increasingly coming to us looking for

or they're developing some solution-based processes and working with us on the Metallicine catalysts that go into those solution-based processes. And we're simultaneously developing a deeper relationship with them. We've signed a 10-year master agreement with customer number two

And we've, in addition to serving them on some new metallocene products and even some of the advanced catalysts, the advanced metallocenes, we're also picking up share as a second source for some of the more commodity grades that have been served by greats.

So if anything, I think Boulder Scientific is gaining some share and perhaps taking it mostly from Grace at this point. What are the underlying assets or capabilities behind our superiors over competitors? Is it due to

accumulated database or specific individuals? Because when you see the market, BSC is a relatively small compared to other competitors. So it's quite amazing. - Yeah, I think it's our comment and Rich can build on it. One is we've been manufacturing metallocenes and advanced organometallics for over 50 years.

The other is we're small. We're willing to take on new projects with perhaps a greater degree of uncertainty and serve molecules that may be

you know, one metton, 500 kilos a year, you know, a million dollars a year of sales. Some of our larger competitors are not willing to do that. It has to be, you know, a certain size for them. And we've heard they even ask our customers for investment to fund the R&D. Grace asks to fund the R&D and then Norium won't get involved unless it's

a size of the volume. If you think about it, these Norion and Grace are multi-billion dollar companies. This is a very small segment of their overall business. Where are they going to allocate their R&D resources? They allocate their R&D resources where there's large volume opportunities.

And for us, some half a million dollar business or a million dollar business that you can count on for many, many years is good business for us. We just get a lot of those, you know, forgive my baseball, I'll keep in a lot of singles, a couple of doubles and a few home runs. - I think there's two things. One we're describing, we're willing to work on the new development. I think the other thing is we're able because we have that experience

um accumulated over decades we often have we have a library of processes available we have we often are able to reuse intermediates reuse some ligands that can be used for a new new design so we can often move quickly um more faster than our our our competition can so i think it's a combination of being willing and able to serve

the development of new metallizines more than our existing customers. So I think we're a small and nimble player, and the underlying assets are our accumulated experience, the focus of our RD program, of our business model, and the focus of our development teams.

I don't know, Chris, if you have any other comments along those lines. No, I think that sums it up. Yeah. Thank you. All right. What is the revenue proportion for BSE over the solution gas and slurry market category?

We don't have it broken out, but we could maybe provide some estimates now and then we could probably get more accurate. I think we would say directionally 60 plus percent is solution. Probably 20, 25 percent is gas and the balance is slurring.

10, 10, 15. 10, 15. So that means the slurry market is very small compared to gas in the solution. Yeah. We don't think there's that many. The slurry market itself for like chrome on silica is quite large. But for metallizines in slurry, we don't think it's that large.

Hello, this is Kenny from A&M. I have a few questions for the clarification. I might have missed this, but I think it's better to ask for the clarification. So the first is the in process like the gas and slurry, how is silica sourced in BSC? Because

It is mentioned that this doesn't support silica, but you deliver the metallosine by the supported forms. Yeah. We purchased silica or the customers who are supporting for buy silica and then send it to us and we told it.

So GRACE is the GRACE manufacturer. So that's the differentiation. Okay, thank you. Thank you for the clarification. And the second question is, as I aware as the salary is also a form of support catalyst.

How do you think that the basis has a stronger competitive advantage in slurry phase? Because it is also the form of supported catalysts and I want to differentiate between the solution and the slurry phase.

Yeah. So we believe, based on our interactions with our customers, that some slurry technology uses supported catalysts, but some slurry technology also has

um metallisene not on a support just the metallisene in a in a in a solvent fed into the slurry reactor so it really depends on the design of the slurry process um it's not all supported so that's why um

in part why we feel we have a strength there because it does play to our strength in the solution technology, where it doesn't all have to be on a support. Is there a rough breakdown of the proportion between supported and unsupported catalysts in this latter phase?

I don't think that's public knowledge, frankly. And frankly, we may be a little bit biased in our analysis there because the applications that we know in slurry that we're selling into that use metallicy, it's all solution-based.

But that's that gets into you know some of the proprietary information of the of the manufacturers that are using slurry, slurring loop polyethylene manufactured poly. Yeah, probably all of them. Okay, I see. Thank you. So I think that concludes the charts that we put together so.

If you want to kind of run through your question list, I would imagine we've answered some of them, but we can move through the questions as you see fit. Right. Yeah. Thank you for the presentation. I think that did cover a lot of the questions about the market. Just one thing is...

From a market positioning perspective, what's the key difference between mild and boron-based co-catalysts? I guess it's a technical issue. You need a boron-based catalyst in solution to activate the catalyst. But in a supported catalyst, where you're...

you need mal because mal is mal or in the malcule it's just how the technology works chris would you have anything to add there no i would say it's more driven by the customer we're supplying in the process they develop i mean they're both they can both serve as activators i think it's more dependent on the process

you're running with the catalyst. But I mean, they're structurally very different. They may do a similar function, but they're ones, you know, a boron based kind of organic. The other one is really an aluminum based activator. - Yeah.

Thank you. So, all right, the next section that I want to ask is about competitiveness. Obviously, a lot of it was covered in the presentation, where there are three main players in the market and two competitors. What's the relative market share that Quantum's looking at between the three players?

So in North America, we think 80% to 90% of the market is shared between us and Grace. And Grace probably has a little bit of an edge on us. If you look at the Rollenberger report, I think the market, Rollenberger estimated the North American market to be

you know, 220 some odd million dollars. So, you know, maybe we have 35, 40 percent, Greece is 40 to 45 percent. And then everybody else, which is down on the way in Oregon, shares the balance. And from our understanding,

well updated understanding that includes all commodity and advanced catalysts together yeah um i wouldn't i don't think that includes like mal and aluminum alkyls because we're using a lot of different applications but from our perspective it would include the metallizane the supported metallizane

the bar on pro catalyst that's that's how we would define the market okay um what's the uh what what criteria can are is usually used in the industry to define competitiveness and segment the market landscape

If that makes sense. Yeah, I think it's, well, we did it based on the capabilities of the companies. And a lot of it's historical relationship. But, you know, where we win is when a customer and why customers come to us is they have a very challenging chemistry problem.

that they're trying to scale up. And I think Jim mentioned this before, where we've been successful in gaining market share is using those development programs to open up share to the older grades that

We've done this at customer number two. They are trying to commercialize new polyolefin, elastomer, and plasthomer grades of product with new metalicine and new advanced metalicine calis.

We are working them exclusively from a development partner standpoint. But what we've been able to gain from that is share of the existing metallurian business that they have, which we believe is predominantly with WR Grace. And Grace, sorry, I think this is a different question.

focuses on mal-co-catalus and quantum focuses on the boron co-catalus. Is that correct? We actually, I would flip it around and say we focus on solution. Our historical business base has been advanced in vitalisines and vitalisines that are used in solution-based applications and a solution-based application which requires a boron co-catalyst.

and Grace has historically focused on supported catalysts for gas phase technology and the co-catalysts that's required there is a MAO or an aluminum molecule. I think it's fair to say the MAO, aluminum molecules and MAO are much

much larger volume, much more commodity related. The boron co-catalysts are smaller. So I think the, you know, the ability to, the innovation is really around the metallocene or the advanced metallocene.

and to some degree the technology around putting it on a support. There's, you know, the fact that Nurion is a major manufacturer of aluminum alkyls, their advantage in that spot has nothing to do with innovation. It's all around capacity and scale. And remember, the aluminum alkyls,

they're going into a lot of different applications other than metalis and catalysis. Then does Grace have any is there any possibility they expand their business model into Quantum's business area and

How much of a threat could that be? I'd say it's very low because they haven't done it to date. Because remember what we said, they try to charge for the R&D up front. And the complexity of the molecules that they produce is significantly less than the advanced analyses that we're making.

We've both been at this game, you know, 30, 40, 50 years, right? So they haven't really expanded into that space. So in the future, it's still highly unlikely to happen. I would say so. Yeah. Okay. All right. And from a short term perspective within five years and a long term perspective defined as probably five to 10 years,

What initiatives is Quantum pursuing to increase revenue in the Gantless business? And what results have been achieved to date? I didn't mention a few things. One is we hired additional commercial team members. So we've expanded our reach. We have a user agent in China.

and we hired some internal US-based personnel that really allowed us to accelerate our engagement in China. Rich mentioned working with a catalyst technology provider who's qualified one of our metallocenes and has sampled three others.

So we're seeing some growth there. We're also working directly with polyolefin manufacturers in China. So that's one growth area. There are also some of the smaller, Boulder Scientific, where we came from, was focused on a very small set of the industry leaders.

We now have more commercial resources to focus on some of the, I'd say, medium-sized, not the absolute largest, but nevertheless medium-sized, where we can grow our share with those customers. So that's one area. The other area we've invested in is back in 2019, we invested in sales.

supported catalysts, the ability to put these metallocytes on supports. And we've grown. We're collaborating with multiple customers at this point. As Rich mentioned, that was an investment made with one key customer. We now are supporting multiple customers and new trials in that area. So that's helping us grow into the gas phase area.

Last thing I'd say is the market, as we've kind of talked about the market dynamic, where as increased investment, particularly in China, the commodity grades has driven the rest of the world towards trying to differentiate their residents and moving towards metallizines. We're getting, our pipeline is quite full of new products and more and more customers coming to us. So we've invested in additional,

personnel in our R&D area to help grow these metallocines and advanced metallocines. And there's a few areas. And then incremental pilot plant capacity, et cetera. I mean, I think two things I would add further to that is, you know, the example that we gave about customer two, where we've leveraged their interest in advanced catalysts with advanced metallocines

and new metallisene development programs to get share of some of the older technologies that they're buying, that we believe they're buying from Grace. So we're picking up market share in that. So another area, and this is one that, you know, in combination with WANIT could help accelerate, is, you know, we've engaged with LG. LG.

in Korea on a couple of development programs. But I'm sure if we were owned by a Korean company, that could move quicker. It's just another example. Right. And then what would you say is the biggest market driver in this MCAT industry?

for this MK industry? Well, the thing we have in mind is the end application industry, like the need or the demand increasing for high value plastics with... I'll give you a couple. So the first one is linear low density bio. And the majority of it,

of linear low density, italicine, linear low density, probably nothing is going into food packaging. Right? So food packaging is growing, right? As economies develop and people's incomes rise and their eating habits change, you need more food packaging, right? Furthermore, one of the innovation drivers

for the metallic linear low density polyethylene is what's called down gauging. How does the resin manufacturer get the same properties in the film that they use or the clamshells that they use using less resin? That drives cost improvement for them and their customers, but also it's good from an ESG standpoint.

So those are some of the drivers in linear low density. Secondly is polyolefin elastomers and polyolefin plasphemers are growing in a lot of specialty applications. The properties of POPs and POEs compared to traditional EPVM, which were traditional elastomers,

are driving growth in a number of, it's replacement in old technologies and use in new areas. So POEs and POPs are used in fuel cells, batteries, a lot in automotive, in shoe manufacturing, a lot, a lot of growth there. And there's a lot of growth for POEs and POPs in China.

from an end use advance. And then that's where a lot of the innovation in in in metallisin technology is taking place. And then, you know, finally, I would say as the industry continues to innovate, right, the growth for metallisin-based resins is coming at the expense of Z-Winata-based resins and chroma and silica-based resins.

So it's a continual drive to innovate from a new product standpoint to serve the market, but also from a producer standpoint to differentiate themselves so that they can move up on the margin scale as the older base.

you know, basically low density PDE, high density PDE, greats, commoditize. Yeah. All right. Thank you. And of course, anything there? I think that covers it. Okay. So moving on to risks, risks,

regarding China and perhaps a little bit on Middle East. You mentioned that Quantum is doing some business with Chinese companies. Is this because they don't have localized metal-acene technology? - Yeah, the technology is not developed in China. We have one small producer,

that supplies a little bit of product into the market. But their price point is kind of similar to where we are. This is difficult chemistry. We had one of the polyolefin manufacturers

in China that we're working with, we've sampled them on a product. They went to the other supplier in China and said, yeah, we can get this product from BSC. Can you make it for us at this target price? And they said, if you can make it at that target price, we'll buy it from you.

So what people don't understand is the complexity of this chemistry and the risk involved with manufacturing this technology. These materials are air sensitive, moisture sensitive, pyrophoric. So if you don't know what you're doing, you can really waste a lot of money. So I would say that's something about the competitive dynamic there.

If you think about Western polyolefin manufacturers, these investments that they make in an ethylene cracker and then a downstream polyethylene plant or polypropylene plant or polyolefin elastomal plant are multi-billion dollar investments.

they are not going to buy a catalyst from a Chinese manufacturer and put it into a multi-billion dollar investment. And any downtime costs them millions and millions of dollars. It's all about uptime. How likely would it be in the long term? Because right now, I guess the Chinese companies don't have low-class technology and it takes a lot of time to gain trust from

the manufacturers and, you know, to prove themselves in the market. How long would that take for the Chinese business? Well, decades probably. So experience before they get to where we are. But I think, could the Chinese eventually figure out metallis and catalysis technology?

for use in China, yeah, I think they will eventually figure it out. It's going to take a long time. But I don't think that promulgates around the world. I think the bigger competitive risk is for the polyolefin manufacturers in terms of all the capacities that has come on stream in China. We talk to the big or big customers in North America all the time. They feel that if the future

in the future polyethylene will be made in only three parts of the world North America, the Middle East and China everything else is going to have to shut down because it's not going to be competitive and China is less about competitive China produces but if you think about it

A lot of the affluent crackers in China are based on NAFTA. NAFTA is at a significant cost for its disadvantage of natural gas. The lowest cost of natural gas in the world is North America and the Middle East. A lot of your production to make polyolthins in Europe is going to have to shut down. You're already starting to see that reckoning. Southeast Asia is going to have a lot of problems in terms of manufacturing polyolthins. Japan is going to have problems in terms of manufacturing polyolthins.

So, yeah. Yeah, I think that goes the same with Korea because we also manufacture it through cracking NAFTA. Right, exactly. So, I mean, the NAFTA to natural gas spread is large, especially with polluted covering around $100 a gallon.

I think one of the other things, addressing one of your questions around how does quanta mitigate these risks? In some sense, I know WANAC is very familiar, or WANAC Materials is very familiar with the semiconductor market. There's some parallels to the semiconductor industry.

The way the action Boulder Scientific is taking and the action I think our customers, the Western manufacturers are taking, is to continue to innovate, to develop new grades of resin and new metallizine and advanced metallizine catalysts to produce those.

And we are innovating in ways to manufacture those at a cost and quality necessary. So, you know, will China catch up first, probably in some of the older metallurgy technology? And the way we come at that is just continuing to innovate like you do in the semiconductor industry.

with these advanced mechanisms. Right, thank you. In your explanation, you mentioned that these catalysts are used in billions, you know, billion USD sized projects or manufacturing processes. And our team's hypothesis was that because of the size of the business and the proportion the catalyst costs within that business,

that business or the manufacturing process, the pressure to lower the price, although China produces, you know, they're oversupplying all this plastic, it's relatively less than, you know, the other, the pressure on other cost drivers. I would say that is an accurate assessment.

Look, at the end of the day, you're always going to be, the way I try to couch it is your customer is always going to make sure you're not speeding. You can't get greedy in terms of what you're charging from a price standpoint. That's why.

if these molecules get to be $5, $10, $15 million of revenue, they're going to expect that the product is going to come down on the cost curve, which happens, right? Because when you go from making it at 50 kilograms a year to 100 kilograms a year to 500 kilograms a year to 1,000, then you're

you're actually producing higher volumes, but cost profile comes down. And so how do we do that? We listen to our customers, and we've learned how to know when it's serious and when it's not. And then we reallocate a significant amount of R&D to

to process development to improve cost structure. But I think your hypothesis is absolutely right. One evidence to that is Rich is with our customer number one and customer number three, Rich is whether it's at dinner with the CEO of this customer or play golf with them.

These are companies 100 times the size of Boulder Scientific. We are a very small portion of their spend. But for customer number one, they count us amongst their top 10 most important suppliers because of the criticality of these materials to their process. So are they concerned about the price? Yes. But I think they're more concerned about the quality and the reliability of supply and the ability to scale these molecules up. And then are we there to support them?

on what's critical to them for them to be successful. They need to differentiate in the market. They need to bring forward new grades of resins so that they can continue to be innovative and successful. And they depend on us to help support them in that development activity. So that's... And if you think about a competitive risk from...

China, they would never, ever give that IP to a scale-up partner in China. Why would they? Because it'd be gone in a second. Right. Okay, that's actually pretty straightforward. And yeah, you mentioned that Quantum has business with Chinese companies. What about companies in the Middle East?

We do have some business in the Middle East. I mean, predominantly today, the business we have in the Middle East is with joint venture partners of the polyolthane manufacturers in North America.

So either they're licensing their technology to a JV and then we're supplying the catalyst. It's on the to-do list, right? But getting penetration with the technology departments at companies like Sovic, right? So your Ampco, et cetera.

I think it's an opportunity that we have in the school. But their technology development around the Taliesin is lagging the Western manufacturers. For example, Borouge and Borealis do have some

metallisene work we are working with them but a majority of their production is still zinglornada based oh when it comes to you know kind of the capacity that installed capacity oh okay right so moving on to the next question it's

We, the team, is viewing as these metalicine catalysts, especially what we initially viewed as advanced metalicine catalysts, as a high-end, a very niche market where technological advances are key to keep the industry going and being a key player in the industry.

Is there anything, which I highly doubt at this point, is there anything that's called a next generation catalyst that can replace the MCATs? - Yeah, I think, Chris, you can maybe take the first stab at this and then we can add to it if necessary.

Yeah, I think a lot of the innovation, so in short, we don't see anything displacing them. In fact, we're working with companies right now. The innovation that we're finding is around modifying the organic ligands around the metals. Single-site catalysts are very difficult to displace. And I think what you're wondering, is anything going to displace a single-site catalyst?

We see innovation with not just one catalyst, but two catalyst systems. In fact, a number of the companies we're working with bring those innovations to us to help with scale up. So I don't see anything on the horizon that would displace it. But, you know, the companies that we work with are really the ones tracking those innovations. But from what we can tell, you know, single side catalysts are just continuing to grow rapidly.

in terms of use in industrial applications. And evolve from a production extent. So most of the- So we talked about- Oh, go ahead. I was just going to build- Most of the new catalysts that have come to market have been a novel ligand structure. We are seeing some people doing experimentation outside of the traditional Group 4 transition metals. So a vast majority of what you see in production now is zirconium, hafnium, and titanium-based.

But people are experimenting with some other metals, but we haven't really seen that take off. But those are still single-sided. To Chris's point, they're still single-sided catalysts. Right. All right. Are there any...

possibilities that where new competitors from the Middle East could emerge in the North American market and take over a little bit of Grace's or Quantum's portion of the market. You don't see any technology coming out of the police.

And most of the power open production where the Middle East players are playing, it's through a joint venture in North America. So there's a number of like Gulf Coast Ventures is one number of JVs where production is happening in the US, but it's for the US part. All right. I think that covers a lot of the questions for Kofi.

the MCATs. And just before we move on to the different business areas of Quantum, I just want to ask two questions for the aerospace and defense business. The first one is, how did Quantum, how was Quantum able to penetrate the aerospace and defense business?

when I did a project regarding defense, it was really difficult to enter the American market because it's very conservative. It's very closed down. They love to localize the production chain or the value chain within North America. And the defense industry or aerospace industry, obviously, high quality is probably one of the most important factors becoming a supplier. What was the key driver for quantum being able to penetrate the industry?

I think I'll answer the way we answer anything. The key for us to enter in different markets is, does our chemistry have a right to play? We are where we win is because we practice chemistry that's in people. So if you think about the rocket fuel additive, there's a couple of products. The main one is called tri-final business, which is organometallic, which Boulder Scientific has been making for 50 years.

maybe not 50, 30 years. - Over 20. - Yeah, 30 years. So we're qualified and sole source to a number of the prime defense contractors in the US and there's new opportunities for commercial applications for that product where we're working with those customers to qualify

a lower priced option for them in the commercial markets. So the reason why we got in is because we could make this organometallic that was needed. So on the xylene polymer, it's kind of similar, but more gap story.

The customer came to the chief technology at Boulder Scientific probably 10 years ago, and they were looking for a manufacturer that could handle large volumes of chlorosylates and could practice sodium dispersion tension.

both of which we did. So this project got started in around 2016. We, the older scientific, made a bunch of qualification material, which the customer qualified.

And then a contract was signed in 2019, but then COVID hit. And the main application here that's driving a lot of the new volume is in the launch of a new wide-body jet.

Right. Back up to the plate because, you know, during COVID and for a number of years after, you know, transatlantic and transpacific commercial aviation was there at all. Right. So is it then correct to understand that Boulder Scientific didn't replace an existing manufacturer

there for that project or that participating? - Let me explain the supply chain. And we did this previously in previous sessions with WANIC, but it's a little complicated. So the customer who's an engine manufacturer is historically, they have a joint venture in Japan and they get the fiber that they need

that they've needed up until now from that joint venture in Japan. Up until now, the adoption of these SIC composite, silicon carbide composite parts has been predominantly in a narrow body program and some military applications. So with the advent of the commercialization of this engine for a wide body application,

the usage increases by six times on an energy basis. So they built a fiber plant and tape plant in the southeast of the United States, and they signed a 15-year contract with Boulder Scientific as the exclusive supplier of the silane polymer to that facility.

There is only one other manufacturer of the silane polymer in the world, that is Nippon soda. Nippon soda supplies the Japanese joint venture that makes five hundred. So for every kilogram of requirements that they have, they have a lot of money.

that this customer has in the United States for that facility. They have to buy it from Bulwur Scientific toward the country. Conversely, we are not an exclusive supplier to them. We are not restricted in where we can sell the silent polymer. And the reason for that is because a lot of the art here is around the manufacturing of the fiber and how you treat the fiber and take that fiber and make

composite parts from it. We have already started to sample other aerospace companies. We have one that we're in, you know, pretty far along with that uses the silane polymer that we bought, that we manufactured, and they are buying it from the E-PonServa today. They'd like to buy it from a U.S. manufacturer. The volumes are small today, but they're going to grow their application.

Interestingly enough, it's a nuclear application facility. That same customer has another silicone-based polymer that they're buying from a small startup company in North America. They would like us to entertain

us making that for them. So there's a lot of places we can take this technology. First, I would say the customer here is 10 to 15 years ahead of all the other global engine manufacturers. They're going to take this technology wherever they can. That's the first thing.

The second is I think there's opportunities for us to take it to sample other aerospace companies and other potential applications. None of that volume, other than what the customer's given us in their forecast that's contained within the contract, that's the demand forecast for the U.S. facility, that's all that we've included in the projections.

Okay. One last question before I hand over to my colleague is after this, this question will probably be looked more in detail by the LDD team, but after the realization of this deal and once BAC is acquired by a current company, would there be any possible issues

in maintaining those existing contracts or supply status particularly within the defense sector customers? - We do not believe so. - No, that's the same for aerospace as well. - Yeah. One of the contract, the 15 year contract Rich was referring to has a provision

But the only change of control provision only comes into effect if Boulder Scientific is acquired by a competitor of our customer. Since WANIC is not a competitor, that clause wouldn't apply.

And I think the critical issue for us as a supplier of defense is that we're a North American manufacturer. We're concerned about the supply chain. Back to, if I could, just your question about getting into the defense space and aerospace and defense. Rich commented absolutely correctly. We follow our chemistry. Where can we add value?

But the other way we add value, and if you look at the markets we serve, we have a good quality system. And with everything that related to what WANAC knows well, WANAC Materials knows well, we serve the semiconductor market. That same...

The quality programs, the quality systems we have in place that allow us to serve semiconductor also allow us to serve aerospace and defense and to serve pharma. So that I would say Boulder Scientific's quality is something that allows us to enter these markets that demand high quality.

Makes sense, yeah. Alright, I think that's all from my end. I'm gonna hand it over to Jun-seo. He's gonna cover the semiconductor part. Hello everyone, my name is Jason, and I'm taking charge of the semiconductor business. So I'm gonna focus on the business history and the mid-to-long-term expansion plans of the border scientific.

But before we go into the main questions, I have two kind of a quick question about the key accounts, the key customers and the products that you make about the deposition process precursor. So first, please confirm if Merck, Air Liquids, and Tegris and so on remain as your key accounts also in 2025. And I want to know about the other key accounts and the revenue breakdown in percentage for each.

Yeah, so our business model is to serve the tier, currently, is to serve tier one customers. So Ayrla Key, Integris, Merck, ADECA, all the materials we provide to you, those are our largest customers. They...

probably are on the order of 80% of our revenue over the horizon. We have development programs with some smaller customers in other geographies. The companies I just mentioned are large global companies, but we have some

business or I'd say development programs, we've generally been conservative in our in our models and in our financial models and have included very little revenue from those from those smaller customers. Okay, I understand. So would it be a

Can I understand like 20% each for the Aeroquid and the Adeca, Merck and the Integris like any person? Yeah, I think in the model, the sales cube that we provided, we didn't list the specific customer, but we have the top four or five customers in the semiconductor materials business. So you can see that revenue intensity amongst those top customers. Yeah.

So you can actually see a breakdown in that in that sale data. And it's really molecule program derived. Okay. Oh, and also, as you mentioned, you did you're right now doing the development program with the smaller companies. And can I have some examples or the names of the companies?

Because actually we do not have the information about the actual names of the companies right now. I think at this stage we are in the process, we really weren't disclosing customer names to specific programs. But there's a Taiwanese company that we're working with.

on a development basis. Okay, I understand. The califurian companies, etc. Okay. And the next question is, there was an opinion that BSC is right now making the precursor with only the half-neum, but as I know, the BSC is making the precursor with lots of organometallics like half-neum, zirconium, and cobalt, and lifting you

And I guess this is true, right? Or is BSC only making the precursor with the Huffling right now? No, I'm going to share my screen with some of the something we shoot. I don't know if we actually discussed it in earlier calls, but it was part of the package we provided.

You know, we, I mentioned when we were discussing the catalyst business, the focus on group four, titanium, zirconium, and afnium, which are a vast majority of what we supply to the advanced catalyst market. We supply those as well.

But some other areas, other early transition metals are also where our focus is. So in addition to hafnium, zirconium, and titanium materials, we also supply niobium, tantalum, and molybdenum organometallites.

So we have some, we've done some development work with Yttrium, for example, and some other areas, but a vast majority of what we're supplying, you could group in this, what you see inside the red box here. One thing I want to correct, you said we do not do anything today with the problem. Okay.

That could be an area of future for us, but it would require some investment that we've chosen not to do. Jim, this is Jay Yeh. While we're asking about the type of precursor, because in 2026, revenue of precursor, we expected $4 million. But previously, you mentioned half of them. So we think only one precursor can make $4 million. So we're wondering what is the material current ongoing business, not the development.

Yeah, we have ongoing business. We have several titanium materials that have been ongoing business for many years. There is a panel of material that's been recently was commercialized at the end of 2025 and is scaling up.

at a major DRAM manufacturer. So, 2026 revenue is comprised of multiple precursors. Okay. Thank you. Okay. And I'm going to move on to the business history part. And what were the primary drivers behind securing $5 million in revenue within just two years of entering the semiconductor precursor market? Like maybe like in the point of view of people, personnel strategy, CAPEX technology and others, please elaborate the explanation by maybe the plan and action and the results. Okay.

Yeah. So I'll speak to it. There's probably a slide I could use as well, but I'll speak to it first. Boulder Scientific has been serving the semiconductor market for over 15 years, but in a very limited way.

One of the first materials we got into, those that are familiar with the market will recognize this acronym, T-MAP, titanium dimethylamino titanium. And we've been supplying that over 50 years. The way we got into that was it was actually an intermediate material.

on the way to making a polyolefin catalyst. And a major tier one approached us around making that and we could serve them because we were already making the material as an intermediate. The key difference is Boulder Scientific really didn't focus on investing purposefully in the material

the electronics market until after Quad C's investment. So Quad C invested in Boulder Scientific. Quad C is our private equity majority owner. Quad C invested in Boulder Scientific in 2019. And by 2021, 2022, we kicked off some development programs. So the growth that you're seeing now as far as

many people at WANIC will know, it takes years actually to develop new materials and target a next generation node where your material can be qualified at the fabs. So the revenue we're seeing in'24 and'25 and'26 is the result of R&D work we did back in'22 and'23.

So, you know, it's taken us time to develop the roadmap that we have. Okay, I understand. So, it was possible to make a quick win revenue just in the two years because there was a technological

background related to the semiconductor business, I guess. Were there no, like, CAPEX or technological R&Ds within two years? No? Oh, no, we had to do a lot of development work. And Chris can elaborate further on this if I don't hit anything. I'd say the synthesis of, we've been manufacturing organometallics

for over 50 years. So when you look at the complexity of the precursors from a synthetic standpoint compared to some of the structures I showed at the beginning of the call, these are actually much simpler structures. The challenge in semiconductors is to make it at high purity.

and make it consistent. So most of our development in R&D was around not just purification via distillation, but also your synthetic processes need to be consistent by purity. We had- You were carrying raw materials. How do you buy suppliers and binding suppliers?

So a lot of work over multiple years in R&D to develop that high purity capability plus capital investment in distillation capability to manufacture at high purity. So trace metals down at below 50%.

you know, in some cases below 10 ppb trace metal impurities. So there was considerable development work. Chris, anything I missed on that? Nope. Covers it well. Yeah. And additionally, you know,

Can you provide a summary of milestone investment also in the 2022 and 23? Maybe I think it was a strategic recruitment of you, the gym in 2022. And what were the key achievements after you came into the Border Scientific? Because I can see after you come into the BSC, the revenue was getting very high. - Yeah.

Thank you for telling that story in front of me. We would say it's on its way to Dan David. So, well, thank you. But it's actually a much broader strategic initiative for Boulder Scientific. I did join. One of the things I brought was some industry connections. Prior to joining Boulder Scientific, I spent 10 years at Integris and then 20 years prior to that with Air Products and their electronics division, which is now part of Merck. So I certainly brought some experience and some personnel.

There was a lot more that we did. We currently, our current director of business development for the semiconductor business also came from Integris. Our director of process engineering worked with me at Aero Products, the Merck facility. So he has experience in high purity distillation. Our director of project engineering worked at Matheson Trigas, a gas manufacturer.

And am I missing anything? - BDs. - Yeah, I got it. - Yeah, the BDs. - Yeah. - Yeah, yeah. - And then I would say, so those are, we brought in some external experience, but what I think probably the key thing was, was the development work done by Chris's organization.

We actually made the strategic decision to invest in electronics. We divided our R&D teams essentially in half. Half was focused on catalysts. The other half was focused mostly on electronics, some degree pharma, but a vast majority on electronics development. And when we did that, we increased the amount of R&D.

Yeah. And that was in 2022, I think, was when we really made that strategic decision to invest in R&D. Yeah, around then. Yeah. So I think it was really an overall strategic initiative by Boulder Scientific. And it's because we recognize this is an opportunity for the company to,

We have the core organometallic capability. And it's a, you know, the semiconductor precursor, which is a fast-growing market that we have the right to participate in. I think while I'm at it, one of the advantages we do bring to this market is we already have the synthetic capability and the scape.

The catalysts tend to be larger scale. So there are many smaller companies, I'll say, that invest in bench scale precursor manufacturing. But when it becomes commercialized, we have the economies of scale to drive the cost down that the semiconductor manufacturers need.

So that's one of our advantages we bring. Okay, I understand. So to summarize, I think the experts from the other companies, like maybe like engineering engineer or like project managers. And then you just mentioned that in 2022, there was a strategic agreement

R&D starting from the 2022. So I guess like after the R&D, maybe in 2023 or 2024, there was some product related to the precursor. Maybe you sell it to the tier ones. Can I have some examples of the new products maybe sold in 2023, 2024?

So I think, again, at this stage, we're not going to name specific molecules, but I'll say there was a tantalum molecule that was sampled in early'23.

qualified by a major DRAM manufacturer. They were using this tantalum for the deposition of tantalum oxide that went into the capacitor stack as a leakage barrier in the DRAM capacitor. There were some delays in 20, this was supposed to ramp in 25. There were some delays with their technology node and we're seeing the ramp and we saw the ramp starting in late 25 and early 26. So that was one material that was a

a result of that relatively extended R&D development that kicked off in 2022. We've seen another material, a titanium base, going into the same application. It's a titanium oxide film in a DRAM stack. That's an older technology where we actually displaced an incumbent, where our tier one customer preferred to work with us. One of the things we're seeing is

Many of the organometallics that go into these precursors can be sourced from China or Russia. And major semiconductor fabs, whether it be DRAM fabs or logic fabs, are very nervous about a supply chain out of Russia or China.

So this has helped us gain some of these POR wins is the fact that we're coming, we're manufacturing these products in a geopolitically stable environment here in the United States. Okay. Is it related to the downturn of the revenue in 2025? Because I remember that in 2003 and 2004, the revenue was about like $4 to $5 million. But I remember there was a downturn in 2025 about like...

There were two things that happened there at 25. One was in 24, some of the new materials I mentioned, the titanium, the two examples I gave you for DRAM faster, the titanium and tantalum, we were providing low volume. It was being used at pilot quantities by our customer and in the fab, pretty high price.

As I mentioned, there was a delay in scaling up the moving to HVM by our customer's customer, by the D-Ray manufacturer, and that led to volumes dropping. The R&D was complete. There were still some sales, but it was at a lower price point, and it wasn't until 2026 that we've seen the volume take off.

There was a second thing, a second dynamic in our market. I mentioned a tight T-map. I mentioned we've been selling for over 15 years. There were some questions that came across around our tier one customers seeking to

In-source, if they have the capability, their ability to make the molecule themselves. One of our longtime customers, their customer, they've been sole source with us for over 15 years. Their customer, especially after COVID, insisted they needed a second source. So their second source was an internal manufacturing.

So what we saw in 2025 was they were qualifying and using their internal manufacturing, but that business has returned. We actually, our 2026 revenues are back up. We've already sold two campaigns worth to that long-time customer, and we expect to continue to be splitting the business. They need two suppliers.

They couldn't, their customer, our customer's customer, the fab, wouldn't allow a single source on TDMAT any further. So we saw that dip in 2025. So those are the couple things that happened in 2025. Okay, I understand. As we are running out of time, I think this would be the last question. I want to know the two things. I want to know about mid to long term expansion plan.

And I want to know about maybe the ultimate end state, maybe positioning or like the strategic snapshot of the profile BSC. What maybe the goal at the end? Yeah. So in the medium term, really outlined in our business model and the financial models we put forward were to continue

as a standalone tier two supplier supplying to the tier ones. We think we have been successful in that model, and we're actually growing now. We have very close collaborations with these global tier one suppliers like ADECA,

Merck, Ehrlich Heat. We think that can be a successful model. In the long term, I think it really depends on the long term is Boulder Scientific is likely to be acquired by now if it's acquired by a

a another private equity firm, we may stay as a standalone. We may continue as on our current business model. However, if we're acquired by a strategic investor, particularly one that has a large electronics business like WANUC, I think there's a critical decision to be made.

And that is, do we try to continue as a tier two supplier? Or if a company like WANUC, if WANUC acquires Boulder Scientific, WANUC is supplying fabs directly. And this is an opportunity for should Boulder Scientific combined with WANUC

be a larger tier one supplier? Should we, and we're already manufacturing material that we, for a number of our materials are pure enough. We think our end customers are just repackaging. In some cases, some of our products, they do a further purification step. In other cases, they're repackaging.

into ampules that can go directly or containers that can go directly to the fab. So Boulder Scientific, in many cases, probably has a short step of investment of packaging and cleaning of these containers. The key thing we're missing, and Wannick knows this well, is service to the fabs. You need local service teams, local quality teams,

That's something that as part of a combined company with a company like WANIC that already has some of those local service and quality and sales teams, we could actually make the strategic decision to become a tier one. But that would be a key decision point, I think, here again.

in the near future for what the long term looks like. Right. And from an investment standpoint, we have the space to invest in packaging and purification. Right. And obviously you would work and cylinder cleaning and inspection. Oh, do you mean like the canister?

Yeah, canisters. Canisters. Oh, okay. Container, we mean canisters. Yeah, so Border Scientific right now does not have capability to make canisters, but you're kind of planning to? We're not. So a couple of things. One is we actually...

in most cases, our customer, our tier one customers are supplying us clean canisters to fill and they're usually larger and they're trans filling from those. They're either taking out of those and filling smaller canisters or they're charging their distillation systems with that. So we certainly have the capability to fill those. We do have the capability to clean. I think the

The additional investment that would be required is these, for example, 19-liter canisters that go, many, many of those are shipped into fabs. So cleaning the volume of those, doing the helium leak check inspections on those, we don't have the capability to handle that kind of volume.

That's something that you can easily invest in. And what Rich was saying is we have the space to invest in. We have not done that because our business model is to continue as a tier two supplier. But if we wanted to become a tier one, we could make that investment. The bigger gap for us is that local sales and service that a company like WANNIC has

might be able to bring to a combined WANAC-Boulder Scientific company. I understand. I thought I was the last man to ask questions, but I think my colleague has some more questions. I think we have more time to answer questions. Yeah, maybe about 15 minutes. We don't have that much questions. Yeah.

Yeah, 15 minutes is fine. Thank you for your taking time for us. Well, we have two more super simple question. And the first is semiconductor business one. Well, you know, I may be misunderstanding something, but my understanding is that the fab such as Samsung or SK Hynix

ultimately qualifies and sources from the Tier 1, such as integris air liquid suppliers, not directly from BSC. That's right. Yeah. If that's the case, I'm not sure I fully understand why a FAP dual sourcing policy would prevent a Tier 1 supplier from internalizing production

and reducing its reliance on companies like BSC. What am I missing? - So that's a good question. I think it depends on the tier one. Not all tier ones have synthesis capability. Most of them have purification capability, whether it be sublimation or distillation.

For example, Air Liquide does not have much internal synthesis capability, nor frankly does Integris. They rely on Tier 2s to partner with them for the synthesis. The example I shared about TDMAT and our customer internalized that,

They do have internal capacity. I think why then would they work with a tier two is your question. The reason is, one, the reason of the case of TDMAT I discussed was they need a second source. Two, the ALD and CBD market is growing at

depending who you ask, 15 to 20% a year. So it's grown very quickly. There are a lot of opportunities. And frankly, the tier ones can't pursue all of that with their own resources. So they may choose to use their own R&D and their own scale up and manufacturing for some portion of the opportunities. But to try to gain maximum market share, they're also working with partner tier two companies like Boulder Scientific on some other materials.

The last thing I'd cite is just a specialty, right? It may be Tier 1 is particularly good at doing metal alive chemistry, but they lack the ability to crack CP and make CP ligands. There could be some capability that Boulder Scientific has that they don't have that causes them to choose to work with a Tier 2.

So those are the reasons why I think a Tier 2 is are still used by. I think another analogy is it doesn't apply to all of the two ones, but, you know, at least one tier one, the synthesis capacity that they have serves electronics as well as life sciences.

So that capacity may be, they're constantly looking at what's the best utilization of that capacity from a company strategic standpoint and an investment standpoint. So they may have the capacity, but decide to allocate it to a different business. I see, I see.

And well, in that point of view, well, at the end of the day, well, I mean, I assume in the future, as wafer volumes and fab capacity continue to expand, and do you see customer, I mean, tier one becoming more likely to internalize production such as organometallic precursor that we made?

I think this is the key risk in our semiconductor business, so I'd like to get your insight of this point. Yeah, I think there are some benefits to internalizing. The question is how you internalize. The benefits are...

So if you control more of the manufacturing, semiconductor fabs are very concerned about traceability and quality back through the supply chain. So that's why we have very close relationships with our tier one customers. We share a lot of information because their customers, the fabs, demand that.

If it's all part of one company, it's much easier because you're not communicating between different companies. Also another driver for internalizing the capability is, you know, there's no margin to be shared. So what we've seen in the industry is tier ones, and actually the way they internalize on this is acquiring

tier two companies. Integris, I mentioned, has very limited synthesis capability. They did acquire a company in Canada called Digital Specialty Chemicals back in 2019. So, you know, they saw the benefits of internalizing. I think

We, you know, Boulder Scientific may be part, you know, of the strategies of a tier one, maybe at some point to acquire Boulder Scientific, because then you can integrate that supply chain and effectively internalize it. So I think that's a trend we've seen in the markets.

And whether Boulder Scientific continues our long term, the ability for us to continue our long term as a tier two requires us to continue to execute on very close relationships with our end customers. We may be purchased by a tier one.

as the ultimate way of getting close. I see. Thank you. I have another question. Sorry to keep you guys... From a key person risk perspective, is how much of this technology that you guys have regarding the...

scale up and core synthesis process, how much of this is systemized and, you know, how much of this is kept in databases across the organization? So in other words, is this heavily focused on key people, like R&D people, such as, I don't know, Christopher here,

or is this systemized and can this system be used to develop or advance the current technology, you know, regardless of who the R&E personnel is? And how is it being protected as well? Sorry. Sorry.

Yeah, it's highly systemized. Chris, do you want to elaborate? We can-- Yeah, so we have very detailed batch records that outline the exact manufacturing process that we use. We have these in-- certainly in the production environment, but all the way through, we're doing detailed documentation, transfers, handovers, working with our partners in our technology pipeline.

So I would say we have important people leading programs, but if those people ended up leaving the company, we have historical documentation that preserves all of that knowledge and know-how. We have a rigorous stage gate system that outlines how we transfer technology from lead identification all the way through to production. So I would say another thing we've done over the last few years is we've really developed a lot of documentation and processes around this where we can bring people into programs, provide documentation and training, and then they can execute that work.

very effectively. So it's not at all dependent on the specific people we have. It's really in the knowledge and the processes we have as a company. I would say just to add to that, the evidence is we've been doing this for decades. So we've certainly had people retire, but we've had new people come in, trained, learn,

So I think we have a very robust system in terms of preserving and to the question of protecting our technology. From an IT standpoint, the core technologies, the core processes, you cannot cut and paste, for example, out of that. There's limited access of who can access that. And then even if you can't access that, you can't cut and paste out of that.

So we have some IT tools that help ensure the security of our intellectual property. Can you tell us how you manage, how you handle hazardous materials like boron? Because we heard that boron is extremely dangerous to,

element and we heard a lot of explosion incidents around the world. And since WANIG also possesses similar capabilities, so we assume that there is going to be a great synergy between the two from this perspective.

Chris, do you want to take that or do you want me to? Yeah, I mean, a lot of this is the 50 years of know-how and knowledge we have around handling hazardous pyrophoric materials. I mean, we have, again, rigorous protocols around environment, health, and safety, how we screen new materials, how we assess them. We do very detailed process safety evaluations in the R&D department. We do reaction calorimetry. We go through great lengths to understand not only raw material hazards,

but hazards along the way in the synthesis, and then ultimately as we're scaling up. So, you know, that's something that we've evolved over time, but, you know, we have a great safety department, great environmental department where, you know, we have that knowledge throughout the raw material to product synthesis chain.

As an example, we're regularly handling pyrophoric materials. We've talked about aluminum alkyles being used in polyolefin manufacturers. So as part of putting one of our customers, we're handling trimethylaluminum as the aluminum alkyl or supported catalysts that we manufacture.

We've been doing that for years. So, you know, Chris described very rigorous processes and the engineering around those processes that enables us to handle highly pyrophoric materials like trimethyl aluminum, as an example. Thank you. And you mentioned single-sides catalysts before.

Can we assume that we can develop any single site catalyst, regardless of element? I'll take a stab at that, Chris, and then you go. What, you know, our mission, our mission here is to make challenging chemistry a reality.

um certainly if it's an early transition metal we have many decades of experience oh rich had mentioned we're looking at some other single site catalysts that are based on scandium um we can do that uh there are some exotic rare there's an exotic rare earth

catalysts that I've been doing some development work with. So basically the answer is yes, we can work with any metal. Every metal has its own challenge, I would say. And the honest answer is, you know, we have 50 years of experience with hafnium, titanium, and zirconium.

You know, those other areas, maybe, you know, they can be a little more challenging. But could we develop it on almost any metal? Probably. But it's a very tough question to answer because, you know, different catalysts and different designs have different degrees of difficulty.

Thank you. I don't know, Chris, what would you say? I think that's well summarized. Your team deals with that every day. Yeah. Did that make us a pretty good track record of success? I'd say catalysts are not going to be a good thing.

Probably, I was just thinking about it, more often than not, the reason a catalyst program doesn't go forward is not because we can't make the structure. It's either because it doesn't perform as expected as a catalyst.

I mean, that's probably the major reason or the economics of it. It doesn't produce enough polymer per unit of catalysts. So it's really that application that I think often where the catalyst fails, a new catalyst fails rather than the chemistry itself.

Yeah, I was just going to build on Jim's comment. I was going to say the same exact thing. I think it's less of our ability to make it and more around the customer's ability to commercialize it. We have declined other opportunities. You were asking about safety. There might be metals that we know have high degrees of toxicity where we're concerned about handling, especially at scale. So I would say of the ones we take on,

the likelihood of success is pretty high from a synthesis standpoint, but we do rigorous screenings upfront in the evaluation phase to determine, do we bring this internally? Do we not? We also have a really good network of companies where we can scale things up where they can, you know, if there's a step we don't, I'll give you an example. Let's say it's energetic chemistry and we're concerned about an explosion or something around handling azides. There are companies that do that really well. So we can work with them to essentially handle that step.

And then once they make that and convert it to something safer that we can handle, we can then bring it internally. So, again, that's the years of experience, the network we have not only on metals, but also on synthesis. Thank you. I think that's, I don't know if there's anything else that the team from WANIC wants to add in or from A&M.

Any more questions? Well, if you guys, you know, as you continue to do your work, obviously, if you have following questions, you know, reach out. We'd be more than happy to answer them via email or get on another call if necessary. Right. Okay. Rich and Jim, Chris and Jason, and also Jeff and Tyler, I really appreciate your time sharing. Now it's six o'clock and eight o'clock in New York City. I really appreciate your time sharing. Of course, I appreciate the participating A&M.

yeah well thank you jake thank you our pleasure thank you gentlemen yeah thank you for sharing time thank you bye thank you all thank you everyone

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