UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 28, 2012
ABAKAN INC.
(Exact name of registrant as specified in its charter)
Nevada
000-52784
98-0507522
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133
(Address of principal executive offices) (Zip code)
Registrants telephone number, including area code: (786) 206-5368
n/a
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
□
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
□
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
□
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
□
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM 8.01
OTHER EVENTS
On June 21, 2012 Mr. Edward Schneider published an article titled Abakan: An Overvalued Short
Candidate on Seeking Alpha, a website dedicated to offering market analysis and opinions. Mr. Schneider
followed up this article with another dated June 26, 2012 titled Abakan: An Overvalued Short Candidate
(Part II).
Since Mr. Schneiders articles state that Abakan Inc.s (the Company) share price is overvalued based
on his own erroneous assumptions, misunderstanding of development stage companies, misplaced
comparisons and incorrect factual conclusions, management has determined that it is in the best interests
of its shareholders that the Company set the record straight.
Attached hereto as Exhibit 99 is a copy of that response to be provided to the Companys shareholders in
connection with the aforesaid articles written by Mr. Schneider.
_____________________________________________________________________________________
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS
_____________________________________________________________________________________
(d)
Exhibits
The exhibits required to be attached by Item 601 of Regulation S-K are filed herewith.
Exhibit No.
Page No.
Description
99
Attached
Managements Response to Shareholders in Connection with the Edward
Schneider Article of June 21, 2012
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
Abakan Inc.
Date
By: /s/ Robert H. Miller
June 28, 2012
Name: Robert H. Miller
Title: Chief Executive Officer
2
Managements Response to Shareholders in Connection with the Edward
Schneider Article of June 21, 2012
Mr. Schneiders article is printed in its entirety in red text below, with our (30) comments
inserted after each of his incorrect or misleading statements.
Abakan (ABKI.PK) is a publicly-quoted, development-stage company with the usual going
concern warnings in its SEC filings.
1) The reference to the usual going concern warnings is in fact an incorrect inference to what is
actually a going concern assumption that is commonly used by auditors of development stage
companies which encourages the readers of financial statements to assume, along with the auditors,
that the company will continue on long enough to carry out its objectives and commitments. The
inference of going concern assumptions further place the reader on notice that the development stage
company will most likely need to realize additional funding outside of existing operations. The
practice of including a going concern is certainly a good idea and should be understood within the
context of investing in development stage companies rather than as a harbinger of certain
misfortune.
Companies like Abakan should really be private. Public-investor quarterly time horizons do not
match the several years it will take for Abakan to develop into a substantial revenue-generating
company.
2) The statement that Public investor quarterly time horizons do not match the several years it will
take for Abakan to develop into a substantial revenue generating company is written for the
investor who buys shares in companies that report earnings each quarter, not for the investor who
buys shares in development stage companies. The inference being that since Abakan does not report
quarterly earning that it should not be public flies in the face of the thousands of development stage
public companies that populate capital markets.
In my opinion, Abakan is unlikely to ever generate substantial revenues or profits
3) Mr. Schneider has the right to voice his opinion as to whether Abakan will ever generate substantial
revenues or profits. However, to attribute any value to this statement one should first look to
similarly publically traded comparisons or case studies for reference. Mr. Schneider makes no
attempt to substantiate his opinion.
Page 1 of 12
Thus, management has to revert to news hype and promotional marketing focused on less
sophisticated retail investors to create stock price support, as there are no real revenues or
earnings to boost the shares.
4) Abakan issues, on average, one news release a month to appraise those interested in the companys
progress and current developments. The releases are vetted for promotional hype and scrutinized for
factual content. The assumption that retail investors are less sophisticated than their institutional
peers is unsubstantiated and of no bearing in the composition of Abakans news releases. The value
proposition that is Abakan today is measured by the market in the context of being a development
stage company. The suggestion that Abakans share price should entirely depend on revenue or
earnings for support does not characterize a development stage company.
On a fundamental basis, ABKI is grossly overvalued with EV/commercial revenues of 3810x
($181M/$47.5K), and EV/company-defined revenues (of which the majority are non-recurring
income and grants) of 81x. Based on SEC filings, LTM negative EBITDA was -$2.8M, with a
net loss of -$1.7M
5) Any determination as to valuation must be considered within the context of Abakan being a
technology company in the development stage for which net losses are the norm rather than the
exception. Commercial success can only follow investment. Whether the current market valuation is
incorrect is yet to be determined.
The company is also carrying $4M in net debt that it cannot currently support
6) Abakan has $2.7 million of convertible debt outstanding with a 5% interest rate, that is due to be
repaid in full or converted into common shares in April and July of 2013. Since the notes are
convertible (as disclosed) at $1.00 per share Abakan expects that convertible debt holders will
convert the notes and interest. Abakan has no other debt that requires monthly or quarterly interest or
principal payments.
Abakan is a holding company that is seeking investments in advanced metal coatings
companies. Thus far, it has acquired a 51% interest in a metal-cladding company MesoCoat,
and a 41% stake in the parent materials company - Powdermet. But a closer look at both of
these subsidiaries shows that most of the key intellectual property and knowhow was licensed
from third parties such as Mattson Technologies and UT-Battelle, as opposed to being
internally developed for sustainable long-term value.
7) MesoCoat certainly values its relationships with Mattson Technologies and UT-Battelle whose
respective technologies are integral to its product development. However, any assertion that these
third party contributions comprise the majority of MesoCoats valuable intellectual property
portfolio and that MesoCoat has failed to develop its own technology for sustainable long-term value
are incorrect. MesoCoat currently has:
Page 2 of 12
a. 7 issued patents
b. 2 licensed patents
c. 4 pending patents assigned to the company
i. not including divisional and country filings which would add over 50 patents pending
d. Mutually exclusive supplier relationship with Rapid Thermal Processing equipment from
Mattson Inc., in non-semiconductor market segment
e. Exclusive License to use the lamp technology from UT-Battelle.
MesoCoat has also filed and is prosecuting multiple patents worldwide on refinements, equipment,
and combinations of materials science and CermaClad fusion cladding technology, and
applications of the technology. The advantages that come with being the first mover in this field
include the opportunity to form large corporate alliances/partnerships and securing key early
adopters and value chain partners. MesoCoats short-term leap forward based on its own
achievements is a recipe for sustainable long-term value.
Abakan's web site (see here) and promotional materials make several broad claims such as
tests on CermaClad CRA products have confirmed six times better corrosion protection. But
this and other claims lack any frame of reference and/or basis of comparison.
8) Abakan is prepared to direct those interested in technical details to trade industry articles, including
articles in advanced materials and processes, metal finishing and National Association of Corrosion
Engineers (NACE) all of which support those assertions made on its website. References to
MesoCoats accomplishments may also be found in connection to peer and industry awards such as
multiple R&D100 awards (Oscars of Innovation), independent published research by Lux research,
Frost and Sullivan, Forbes, NorTec, NIST, US Army, etc. along with other highly competitive
awards from major federal research agencies such as the EPA, the National Science Foundation, and
the Department of Energy.
Furthermore, Abakan does not provide any product specifications for either metal cladding or
metallic composite materials.
9) MesoCoat does in fact provide a sufficient basis for metal cladding specifications in reference to
published data on CermaClad which states that the product meets or exceeds the requirements of
API (American Petroleum Institute) standard 5LD for clad pipe. Test specifications are to ASTM
standards and were carried out by independent, certified labs such as Det Norske Veritas (DNV)
and University of Dayton Research Institute (UDRI) (runs the air force mechanical test
laboratories). Specific property data is cited in multiple articles and releases, such as data that was
presented and approved for release at the American Society of Mechanical Engineers (ASME)
International offshore pipeline meeting last October. MesoCoats market entry strategy for
introduction of CermaClad technology has been to qualify its products to existing industry
standards, to be followed by developing and setting new industry standards.
Page 3 of 12
On the other hand, Nanosteel, a private, venture-backed peer, succinctly states its product
specs (see here).
10) Mr. Schneiders reference to Nanosteel cites internal quality standards and guidelines, rather than
industry-accepted standards and certifications of quality such as API 5LD or DNV F101, which are
the specifications CermaClads Corrosion Resistant Alloys have already met.
In addition, Abakan's web-site home-page states a dubious $150B metal protection and life
extension market opportunity.
11) Abakans subsidiaries, MesoCoat and Powdermet intend to capture some portion of the $150B metal
production and life extension market opportunity. The estimated market size for the products to be
offered by Abakan is supported by third party estimates as provided below.
MesoCoat
The global paints & coatings market shrank by 5.8% in 2009 to reach a value of $91.7 billion. In 2014,
the global paints & coatings market is forecast to have a value of $105.8 billion, an increase of 15.4%
since 2009.
**Source: Research and Markets: Paints & Coatings: Global Industry Guide
The global IMFT market is estimated to reach about $21.1 billion in 2005 and is expected to rise at an
average annual growth rate (AAGR) of 7.4%, to more than $30 billion in 2010
**Source: BCC Inc., GB-325 ─ Inorganic Metal Finishing Technologies, December 2007
The Global Thermal Spray Industry was estimated to be around $7.6 Billion in 2006
**Source: International Thermal Spray Association (ITSA) Presentation, Marc Froning, Past
Chairman, ITSA
Metal Coating, Engraving, Plating, Polishing & Treating in the US was a $12.6 billion industry in 2008
**Source: IBIS World Industry Report; Metal Coating, Engraving, Plating, Polishing & Treating in the
US: 33281; May 29, 2009
BASED ON ALL THE ABOVE REPORTS, ESTIMATED FUTURE PROJECTIONS, AND BEST
ASSUMPTIONS; THE ESTIMATED MARKET SIZE FOR METAL COATINGS AND METAL
CLADDING IN 2011 WAS $32 BILLION GLOBALLY.
Page 4 of 12
Powdermet
Markets for advanced composites to reach $25.8 billion in 2020
**Source: Carbon Fiber and Beyond: The $26 Billion World of Advanced Composites; September 2011
Aluminum manufacturing in the US is a $37 billion industry in 2012
**Source: IBIS World, Aluminum Manufacturing in the US: Market Research Report; March 2012
Iron & Steel manufacturing in the US is a $117 billion industry in 2012
**Source: IBIS World, Iron & Steel Manufacturing in the US: Market Research Report; April 2012
Tank and Armored Vehicle Manufacturing industry will increase to $5.7 billion by end of 2010
**Source: IBIS World Industry Report 33699b, Tank and Armored Vehicle Manufacturing in the US
September 2012
Metal Pipe & Tube Manufacturing in the US was $8.1 billion industry in 2010
**Source: IBIS World Industry Report 33121, Metal Pipe & Tube manufacturing; December 2010
BASED ON ALL THE ABOVE REPORTS, ESTIMATED FUTURE PROJECTIONS, AND BEST
ASSUMPTIONS; THE ESTIMATED MARKET SIZE FOR METAL MATRIX COMPOSITES AND
OTHER COMPOSITES THAT WOULD REPLACE STEEL, ALUMINUM, AND MAGNESIUM IN
MULTIPLE APPLICATIONS IS EXPECTED TO BE $100+ BILLION GLOBALLY.
Questionable claims are not only limited to product, but also to management's capabilities.
CEO and Director, Robert Miller, states in his bio that he was the founder and director of
Nanovation Technologies Inc., a developer of fiber-optic products which realized a market
capitalization of over $500 million. Robert Miller was in fact an early investor, not an
operator/founder, of Nanovation;
12) Miller was the founder of Nanovation. Nanovation was formed as a subsidiary of Stamford
International and Miller was the founder, President and largest shareholder of Stamford. Miller
decided to form Nanovation, there were no other cofounders nor even potential cofounders.
Page 5 of 12
And according to several sources such as (see here) - Robert Miller, and his Stamford
International investment vehicle, contributed to the destruction of the $500M in Nanovation
value that he claims to have created.
13) Nanovation had a $50 million relatively short term loan outstanding when the technology bubble
burst in 2000, in the ensuing 18 months when the NASDAQ dropped from over 5,000 to 1,500 no
one could finance a technology deal let alone pay back a $50 million loan so Nanovation was
liquidated.
(I will not even touch Crystallex, a Venezuelan gold mine where Mr. Miller was a Director and
Chairman).
14) Miller built Crystallex, negotiated and bought the $10 million property in 1993, built a $4 million
successful production facility and when Hugo Chavez took over Venezuela in late 1990s Miller sold
his controlling position to a U.S. buyer.
Robert Miller's stock promoter background,
15) Miller was a partner and significant producer at a mid-sized Canadian brokerage house in the 1980s
from there he went on to be on the executive management or an independent director of many
companies. Miller has never assumed the position of promoter in any public company, nor has
anyone ever suggested this in the 24 years that Miller has been acting as an executive officer. It is
reasonable to suggest though that in his position as CEO of at least 6 public companies that the CEO
is often described as the Salesman of the company in that with a development stage company the
CEO usually assumes several roles.
Abakan's offshore BVI subsidiary,
16) Abakan projects that 80% of its sales will be made offshore. As stated in Abakans SEC filings
Abakan currently has one wholly owned subsidiary in the Cayman Islands and intends to have
another subsidiary within a few months in Brazil. Other offshore subsidiaries will certainly follow
over the next 3 years. Since the vast majority of our anticipated sales will be offshore so will be our
operations.
and a small Abakan loan payable to a company controlled by Robert Miller's wife raises some
more red flags
17) Any suggestion that Millers wife lending $2,500 to Abakan should be a cause for concern is
misplaced.
Page 6 of 12
Management states that Abakan has two competitive technology advantages that support its
performance claims. First, the use of nanotechnology - noting that small amounts of nano-
additives and related structural controls, lead to exponential performance improvements. But
many companies use nanotechnology today including the many competitors of Abakan;
whether it's Instagran's nanocrystalline "Nanovate" metals (see here) or Nanosteel's patented
nano-alloys used for thermal spraying (see here), both assert the same microstructural
advantages claimed by Abakan
18) Mr. Schneiders article cites several other emerging companies that also base their performance on
nanotechnology. Rather than being a concern (these are venture-backed start-ups at the same or
similar stage as Abakan), this reaffirms that the technology is indeed valid. For a disruptive
technology in multibillion-dollar markets, one would expect numerous competitors in an emerging
field taking advantage of such a revolutionary and disruptive capability as nanotechnology (and it
would be concerning if there were not emerging competitors). Note that worldwide investment in
nanotechnology has been over $40B, and the leading experts all agree that it represents a major
technology shift for the coming decades. Those companies who figure out how to extract practical
value from nanotechnology and are able to capitalize on this technology early will come to dominate
the field. Integrans and Nanosteels technical approaches are different - Integran uses plating
technology, a process that is environmentally unfriendly, slow, and limited in scalability. They have
direct competitors Modumetal and Xtallic while Nanosteel uses weld overlay technology, and
specially designed alloys with heat treatments to develop properties- Abakans CermaClad process
offers 40X the productivity, and does not rely on tightly controlled heat treatments or rare earth
alloying additions to develop properties- our IP basis uses low cost domestic materials to refine the
microstructures and achieve the required performance/structures. he most effective/scalable, and
efficient process will normally win the market, and Abakans processes are much more scalable and
productive than either Integrans or Nanosteels approaches. Abakan/MesoCoat have strong
momentum and industry-leading products and technologies, as recognized in multiple, independent,
peer-reviewed and well-respected competitive awards and recognitions. Note that independent
research firm Lux Research recently moved MesoCoat/Abakan to the "Dominant Quadrant" in the
protective coatings industry, a rating much higher than several of our competitors and established
companies. Lux researchers positioned specialists in novel coating materials, manufacturing
methods, and deposition processes on the Lux Innovation Grid based on their Technical Value and
Business Execution companies that are strong on both axes reach the Dominant quadrant.
Page 7 of 12
The second advantage claimed by management relates to two technology licenses with third
parties. First and foremost, Abakan has an exclusive agreement to purchase plasma arc lamps
from Mattson Technologies. These arc lamps provide a more efficient and stronger metallic
curing process. First of all, the high-power plasma arc lamp was invented by Voric Industries
(not Mattson) -
19) Vortek (not Voric) invented the lamp system for which we are licensed to use, however Mattson
bought 100% of Vortek in 2004. Therefore, our exclusive agreement with Mattson is a positive
development. Abakan recognizes that the Vortek Lamp system could be replicated through reverse
engineering that might benefit competitors despite patent protection it also recognizes that such
replication would require years of development and millions of dollars of investment. The same
predicament can be experienced by almost any patented technology in the commercial markets
today.
Also, this agreement can be voided if Abakan does not meet fairly steep minimum purchase
requirements including a $2M fee.
20) Indeed, any agreement might be voided if the terms and conditions are not met. However, how one
reaches the conclusion that a given fee is excessive within the context of a given business model or
whether minimum purchase requirements are excessive cannot be determined without an
understanding of the value proposition connected to Abakans technology. Mr. Schneider has not
demonstrated that he has any understanding of what Abakan has behind it and what it has in front of
it. He appears to know nothing of how/why Abakans agreements were valued, timed, etc. Certainly,
he is in no position to determine the terms and conditions of those agreements that were formed to
propel Abakan forward.
Abakan also pays IP licensing and royalty fees to UT-Battelle labs for two patents
21) Royalty fees and IP licensing to National Laboratories are almost always very low. Costs associated
with such fees seldom determine the commercial success of any given licensee. Abakan is in like
position and is only slightly impacted by fees associated with the licensing of proprietary
technology.
Page 8 of 12
The most relevant development for Abakan was its ability to leverage the customized plasma
arc lamp benefits into a Cooperation Agreement with Petrobras. This is still early days, as the
Abakan's MesoCoat subsidiary must carry out qualification tests for development of cladding
materials on internal and external surfaces of pipes for an 18-month period that started in
2011. We still have no definitive feedback from management. So, the Petrobras
announcement is very preliminary.
22) MesoCoats agreement with Petrobras requires that Petrobras pay MesoCoat on a schedule that
corresponds to MesoCoat hitting multiple milestones. Petrobras has made the first three payments
with only the final payment left to be made. Abakan will be certain to announce MesoCoats
fulfillment of the agreement when the final milestone is reached.
The other potential customer announcements are even less consequential.
23) Apart from the Petrobras announcement we have made the announcement about Powdermet
partnering with Oshkosh Corp and Eck Industries, and MesoCoat securing a supply contract for
PComP coating materials. Apart from these two announcements, Abakan has been very cautious
about releasing information about its customers. MesoCoat currently has a customer prospect list of
more than 50 companies serving the Oil and Gas, Mining, Aerospace and Defense, Heavy Industries,
and other industries the great majority of whom approached MesoCoat. Most of these are large
multi-billion dollar corporations that have tested our products, or are currently testing our products,
or have committed to test our products in the near future.
Why downplay Petrobras and other news releases? One issue is that the company has to
raise enormous amounts of dilutive capital in order to set up manufacturing, and deliver
claimed product capabilities under high-volume manufacturing (HVM).
24) One of the most promising and fortunate things about Abakan and its subsidiaries is that the costs
for building plants versus the revenues that these plants can potentially generate is very attractive,
therefore the dilution is likely to be minimal as some amount of debt financing is also a practical
alternative to equity.
But with only 37 employees, almost all lacking in manufacturing experience, it will be very
challenging for Abakan to transition to HVM.
25) Abakan recognizes that to jump from being just an R&D company to being both a technology
company and a manufacturing company is a serious challenge. Fortunately, Abakan has onboard two
production managers: Mario Medanic and Curtis Glasgow, who each have 20+ years experience as
managers in positions that are similar to the jobs they have today. Abakan will build on these
managers in place and is confident of making a successful transition. Abakans website displays the
bios and job histories of Mr. Medanic and Mr. Glasgow.
Page 9 of 12
Secondly, competition will easily blow Abakan out of the water. In its main metal cladding
sector, market leader JSW Steel is part of $15B conglomerate focused on steel, energy and
materials. JSW is vertically integrated with such a tremendous cost advantage that it will be
nearly impossible for MesoCoat to compete.
26) The comparison of JSW Steel with MesoCoat as a competitor would seem like a compliment to a
development stage company. However, the comparison is not valid. JSW Steel was founded in 1907,
and is seasoned producer that relies on traditional technologies rather than a development stage
company relying on emerging technology. JSWs does not have any products that can compete with
Abakans. Any assumption as to cost of goods advantages should not be accepted based on
integrated pricing. Rather, any assumptions as to cost of goods must also consider the processes
involved in creating the products. Integrated cost of materials advantages do not always trump
superior processes. Abakan brings a new reality to the industry and should not be compared to the
old.
Abakan's other subsidiary, Powdermet, competes against a plethora of metal composite
material companies, with no barriers to entry, selling small amounts of these composite
materials for limited revenues. Thus, Abakan is trying to enter a very competitive, low margin
business.
27) Powdermet does indeed compete against a plethora of metal composite materials companies.
However, the expectation is that Powdermet will utilize its proprietary technology to create an
immediate barrier to entry by offering better products with good margins at competitive prices
Page 10 of 12
Let's give Abakan the benefit of the doubt and assume the super-optimistic, albeit highly
unlikely, scenario that Abakan trumps its multi-billion dollar nemesis and other peers, passes
the Petrobras trials as well as an Alberta pipeline project, and somehow raises tens of millions
of dollars and acquires the HVM expertise to actually deliver the product. Let's assume that
Abakan obtains 20% of this $2B oil & gas industry metal cladding opportunity, equating to
$400M in revenues. Realistically, it will take Abakan five to ten years to reach this level (NB:
the agreement with Mattson expires in 2017, but we will ignore that for now, and let's assume
five years to reach $400M instead of ten). Using the closest peer, market-leader JSW,
provides us a net margin of 4%, and a P/E of 12x. We would also assume 30% equity dilution
to raise capital and a 15% annual discount rate. Thus, the net present value of Abakan under
this one-out-of-a-hundred scenario is $73M, 41% of ABKI's current fully-diluted market cap of
$177M. And this is the longshot rosy scenario. The most likely scenario is that ABKI will end up
close to zero.
28) Any comparison of Abakan to Japan Steel Works JSW is fatally flawed. JSW is a $15B
conglomerate, therefore a mature steel company and Abakan is a multi-award winning
nanotechnology company that has just started to commercialize some of its product lines. The
comparison does not exist. Nonetheless, Mr. Schneider assumes that Abakans net margin will be
4% and that its PE will be 12, just like JSWs. Abakan expects to have much better product(s) that
will sell into multi-billion dollar markets that cost it less money to produce, so much lower that
Abakan expect to sell MesoCoats CRA product at a significantly lower price than its competitors
inferior products.
ABKI is currently trading at $2.30. The company recently raised money at $1.25 per share at
the end of March 2012, before hiring promoters (see February 29, 2012 10-Q, Note 15) to
pump the stock up to as high as $2.75.
29) Abakan raised money at $1.60 per share in May.
Technically, ABKI looks vulnerable with the pump scheme wearing off, and the lock-up expiring
soon on the cheap $1.25 shares.
30) Mr. Schneider implies that a public company hiring, what he calls promoters, is somehow an
inappropriate act. Most public companies hire IR people, so has Abakan. The people Abakan has
hired are not, as he has implied, there to hurt investors by pumping the stock up, and even a novice
can see that Abakan does not trade like a stock involved in a Pump and Dump scheme. We note
that Mr. Schneider called the shares issued by Abakan at $1.25 as cheap shares, hardly a dump.
Here are some facts:
A. High end expensive cladding is in such high demand that the worlds biggest low end coating
company told Abakan that many multi-billion+ dollar oil and gas developments are going to be held up
because of the cladding portion.
Page 11 of 12
B. The engineers for multiple oil super majors call the cladding that they are using crap, they are using
it to the tune of billions of dollars but they hate it. That is their words.
C. People who have been in the pipe and pipe coating business for more than 20 years have said that our
lab results are so impressive that that may be the reason that our competition are sitting on their hands
instead of building capacity to meet the large projected growth in the cladding market.
Shorting does have redeeming qualities. It is often said that it helps keep a companys share price
honest. A company is forced to get its story out precisely and factually or suffer the consequences.
Indeed, one would expect numerous competitors in an emerging field taking advantage of such
revolutionary and disruptive capability as nanotechnology. Integran and Nanosteel are, among several
others, using different technology platforms/approaches to exploit nano-science. Note that worldwide
investment in nanotechnology has been over $40B, and the leading experts all agree that it represents a
major technology shift of the coming decades. Those companies who figure out how to extract practical
value from nanotechnology and are able to capitalize on this technology early will come to dominate the
field. Abakan/MesoCoat has a strong momentum and new industry-leading products and technologies,
as recognized in multiple, independent, peer-reviewed and well-respected competitive awards and
accolades all of which are presented on our website.
Page 12 of 12