UniPixel: The Truth and Only the Truth … for once.


Citron White Bkgd    Breaking News:  The 800 lb Gorilla just entered the room 

LG, the enormous Korean semiconductor giant, is out with a report they have developed a patterned metal-mesh film for capacitive touchscreens that can be printed at 3 nanometer width, which is about half the claimed width of UniBoss technology.


(See “Ultrafine Metal Mesh Film” section)

So maybe getting that $12 million deal with Kodak wasn’t such a bad idea after all!  (Run, cash the check! )


Citron White Bkgd  Time to Tell the Truth

Warren Buffet once wrote his investors:

“In poker, if you’ve been in the game 30 minutes and don’t know who the patsy is, it’s you.”

Unpixel (NASDAQ:UNXL) shareholders — you are that patsy.

It is the opinion of Citron that Unipixel has transacted away half of the future of Uniboss for the equivalent of .80 cents a share — while selling stock at $32 a share to the public.

After Citron reported on this last week as “Unipixel sold half of Uniboss” Alvarez & Marsal immediately issued a press release denying that Uniboss was sold.  The company has now reduced demand for material disclosure of this much-hyped transaction to a ridiculous semantic game of evasive language.

So if Unipixel was not “sold”, they committed half the revenues and/or half the profits in this deal to Kodak, with exclusivity terms.  Whether it is a manufacturing agreement with covenants, or a joint venture, either way, Kodak has been extended rights via covenants to participate materially in the profits of UniBoss.  These obligations of Unipixel come at a price, and that price provides a critical valuation data point for UniPixel.  The company is doing everything it can to prevent disclosure of these terms to the public…for a reason.

Whatever the actual terms are, there's a contract here and both parties have it.  How long can its terms be kept secret from the investing public?  From the Kodak side, which is in bankruptcy, all material agreements are subject to approval of the creditors committee and strict disclosure requirements.  The true nature of this agreement is material to both companies, and both companies have absolute obligations to shareholders to disclose fully. 

It is Citron’s opinion that if the transaction with Kodak doesn’t represent an asset sale of Uniboss, then it is even worse:  Unipixel is not receiving any money but is giving up half the profits.  In return, Kodak is helping to fund CAPEX expenses in tranches, the conditions of which are material, and is not committed to the full $12 million commitment at this time.

Citron’s understanding of the material terms of this deal has been confirmed in principle by comments of :

·         A director of a Alvarez & Marsal, a primary player on Kodak’s creditor committee

·         An analyst, who has already modified his model to reflect Unipixel’s sharing 50% of the profits from Uniboss with another entity

·         UniPixel CEO Reed Killion himself, who has commented on “equitably sharing profits of the venture” (eg 50% is “equitable”)

We stand by the above statements.  

Citron calls upon Unipixel to do the right thing:  to fully disclose all the terms of its agreement with Kodak regarding revenues, investment, obligations and covenants.  

Furthermore, we invite SEC scrutiny on this matter:  we stand on the side of full disclosure of the truth.  Uniboss has violated numerous SEC laws regarding material disclosure. 

It is Citron’s opinion that Unipixel shareholders are being intentionally duped.   The company has compounded its violation by selling shares while perpetuating an extended shadow game of intentionally misleading semantics – at the exact time that all shareholders need disclosure of this material information.

If in fact Unipixel believes that Citron is lying to the investing public, please sue us — we look forward to deposing company executives and those at Alavarez & Marsal to prove the truth. 

Unfortunately, we expect Unipixel to do the wrong thing:  to script yet another analyst call, to redirect the public’s focus is to the mythical “manufacturing capacity” of a yet unbuilt facility, based on an unproven product, which obviously needs a lot more technical development before it ever sees the light of day.  Otherwise, why would Kodak’s expertise be such a material a component of this deal? 

Citron has contacted Alvarez and Marsal general counsel three times for clarity on the agreement – all to no response

Most disturbing, the lack of integrity in practicing full disclosure of this deal only mirrors the same “over-promise, under-deliver” management strategy that the company has been dishing out to shareholders for years.

Cautious Investing to All