Invitation to Communicate & Network

Dear Nanotechnology.com Member,

This is my third letter on “small” and advanced technology investing.

I ask that you respond to the following three quick questions by e-mail to my address below:

1. IMPORTANT: Did you receive both Letter #1 and Letter #2?

2. Do you want to continue to receive more information and intelligence on this subject from me?

3. Would you like to be kept in the loop for details related to public and private companies in which either I or my associates have invested or may invest?

So, having made the case that a mess has been made of “small” (nano, MEMS, micro-fluidics, microelectronics, etc.) and advanced technology (laser, opto-electric, advanced materials, etc.) investing over the last 9 years, we reversed and pointed out about a dozen SIGNIFICANT (multi-hundreds of percent profits) success stories that were exceptions and strongly indicate the future promise of the space.

Companies, industries and game changes advances in catalysts, solar energy, batteries, clean-tech, alternative energy, advanced materials, pollution clean-up, filtration, green-tech, displays, next-generation computers, medical diagnostics, drug discovery and so many other dynamic industries are going to be grown from these technologies.

Again, as I pointed out in Nanotech Fortunes, a “bottoming-out” of the initial enthusiasm for these stocks and private companies is now likely to occur between mid-2008 and the end of 2009 and we look to benefit from that.

The valuations are most likely to favor scientifically astute, sophisticated investors who understand the relevant timeframes.

Like real estate in much of the country today, I believe it will become a buyers market for professional investors like ourselves and those we advise.

The winning formula going forward is not likely to be the angel investor, to venture capitalist (VC) to investment bank formula of the internet craze or the failed, advanced tech investing model of the last 10 years (particularly 2001 – 2005) based, it seems to our team, on wishful thinking.

We are confident the most significant, safest, and quickest returns will be made by those entering and utilizing the alternative public VC markets that were previously reserved largely for non-technology companies’ venture capital. While the U.S. OTC market and AIM market in London have potential at the low (a few million dollars) and high end ($40 million+) if financing is already acquired, another venue offers benefits that cannot be found elsewhere, and it is also in a well-regulated, Western domicile.

Having direct access to a Scientific Advisory Board made up of 5 National Academy-level scientists covering chemistry, physics, materials science, electrical engineering, biology and biomedical engineering and a cadre of “junior” scientists” (top Ph.D. candidates at the best universities in the U.S.), combined with our in-house investment skills in private equity, public market trading, investment banking, venture capital, investor relations and financial PR give our team what we believe to be a significant competitive advantage.

This is a team with more than 135 years of relevant, professional experience.

If you are interested in working with us, or finding out more, we encourage your inquiry.

Please remember to reply right now with the short answers to the 3 questions near the top of this letter.

Thanks for your time and attention.

Best regards,

Darrell Brookstein

Managing Director
The Nanotech Company, LLC
And www.Nanotechnology.com
3525 Del Mar Heights Rd. #345
San Diego, CA 92130
858 794 0848

darrell@nanotechnology.com

My Optimistic Letter!

Between long discussions over the years with my SAB (Scientific Advisory Board), the top Ph.D candidates I work with closely and the daily news on “small technologies” at our site, www.Nanotechnology.com, I am a strong supporter of the clear evidence that scientific and technological advancement is growing faster and more impressively than at anytime in the past.

Moreover, these advancements will drive dynamic, high-profit, new products across dozens of industries for decades.

My somewhat more controversial thesis is that like gold mining companies in 2000 or tech in 1994, now is the perfect time to begin due diligence on public and especially private companies creating new paradigms and potentially game-changing niche markets involved in diverse, explosive growth industries like, alternative energy, advanced materials, medical diagnostics, so-called “green” and “clean-tech”, drug discovery and delivery and semiconductor manufacture, that are driven by nanotech and other cutting-edge technologies.

Unfortunately you’ve probably heard this before. From 1997 to 2005, a few first and second-tier VCs and the same number and quality investment banks promoted these ideas aggressively.

- They were too early for public market recognition.

- They terribly misjudged the lab to product time-cycle.

- They invested “sophisticated”, but scientifically uninformed, private and public money in what were essentially “science projects”.

Despite that, today, most investors are unaware, but as you’ll see below, there were/are MANY successes. (and we don’t mean stain resistant slacks)

As I pointed out in Nanotech Fortunes, the early stage interest was likely to bottom between mid-2006 and the end of 2009. This “bottoming” now looks likely to occur between mid-2008 and the end of 2009.

By mid-2006 we put together a scientific, technical and competitive landscape commentary on all the key “small technology” (micro and nanotech) driven companies outside the Fortune 500. It gave us leg up on hedge fund managers and others and our internal updates continue to provide us advantages. To review the early 2006 work click here: http://www.nanotechnology.com/dossiers/

Today, our team is gearing for an explosion of investment interest in the 2010 -2013 period.

Perhaps, with our help, you should be, too.

Nearly every day Fortune 1000 companies make announcements in nanotech like today’s by Hitachi - http://www.technologyreview.com/Wire/19579/?nlid=604

In February 2006 our team had put together The Nanotechnology.com Small Technology Index and our scientific, technological and competitive-landscape reviews (short, free sign-up to site required) of the key, publicly-traded companies. Two of the three Index companies taken over since its founding in February 2006, Freescale (FSL) and Applied Films (AFCO), were huge investment successes, taken over at incredible premiums (Freescale being the largest tech takeover in private equity history at $17 billion).

Last week we looked at the bad news, but there is plenty of good (links go to our exclusive 2006 sci/tech/competitive commentary):

1. Private nanotech battery company, A123, continues to impress and grow (in news reports at least) closer to possible electric car and other applications, even while the nanotech solar companies over-promise and under-perform.
2. Advanced Battery (GBT) rose from $0.41 in 1/06 to a recent $5.70!
3. ISIS Pharma (ISIS) rose from $2.85 in 2/06 to a recent $16.80!
4. Ilumina (ILMN) which we tagged the poster-child of “small tech” success went from $4.25 in 8/04 to a recent $61!
5. FormFactor (FORM) zipped from $16 in 8/04 to a recent $44.
6. Alnylam Pharm (ALNY) moved from $5 in 11/04 to $35.50 recently!
7. Advanced Magnetics (AMAG) leapt from $6 in 2/05 to $68.50 a few days ago!
8. Elan Corp (ELN) has grown from $3 in 3/05 to more than $22 recently.

There are more: Check out 3 year charts and our commentaries for PANL, MTSC, CPHD and ANSS! Relative to their relevant bogies and the QQQQ, they have all dramatically out-performed.

October 1st Notes from "The Small Tech Prospector" That Look Pretty Darn Good on October 8th

. . . . .

"Two consecutive closes over 155.55 (we’re not far now at 152.58) in the SPY would turn me bullish again for a quick 6-9% further rally.

Gold, oil and currencies are late for short (3-10 day), sharp down-moves. Look for them to start any day now. Their long-term up-trends are still intact, however. Among those, oil will be the first to falter for the intermediate-term, and only then heading to the support above $65." . . .

"On September 19^th Cambridge Display Technology (OLED) was taken over by Sumitomo Chemical Company at approximately $12/share. As of that date 65 shares of OLED were removed from The Nanotechnology.com Small Technology Index^TM and replaced with 49 shares of Universal Display (PANL).

This is the 3^rd of our original 30 Index stocks to be acquired in 18 months indicating the strength and significance of our original choices: (http://www.nanotechnology.com/stocks/?a=index)

More bad news continues to pummel nanotechnology investing and finance as both typical investors and professional ones alike recoil from even the use of the term “nanotech”:

Some examples of this deepening weakness from over just the last couple of months:

1. One of six early candidates that we were watching closely went public via a reverse takeover of a shell on the Bulletin Board, contrary to my specific, emphatic advice: the stock is completely illiquid, trading “by appointment” roughly 60,000 shares TOTAL at about a $3.50 average price in almost 4 months!!

2. Public company, Biophan, has watched its $500 million market cap in 2002, based on nanotechnology that may enable MRIs to be done on folks with pacemakers, dwindle to an $11 million sale of that technology.

3. Another nanotech company has delayed a Toronto Venture listing so many times that pre-public shareholder confidence is at risk of being lost.

4. A technological favorite of ours wants to try the traditional venture capital route one more time. They will be unsuccessful, as their total dollars sought is far under the VC radar.

5. Private company (once) extraordinaire, NanoOpto (about $70 million in VC money invested), and all its assets were acquired by a public company, API Nanotronics, for a ridiculous $4 million.

6. The CEO of another company claims he has raised $1.5 million from an investment bank after more than 2 years of effort, but won t name the firm for me until October when he has funds in hand (this is the 3^rd delay date he has given me). Given the market and the early stage nature of his project, I seriously doubt this will come to fruition, at all, with ANY investment bank.

7. Finally, Cambridge Display (Symbol-OLED), arguably the leader in polymer light emitting diodes, was acquired by Sumitomo Chemical for $280 million. That seems great, until you realize that that is exactly the valuation they raised their IPO from the public only 2 years ago!

8. Nanogen (NGEN) announced they have contracted with Credit Suisse to help them sell their money-losing NanoChip instrument system.

9. Leading nano-investor, speaker, promoter and VC. Steve Jurvetson, doesn’t even appear at nanotech conferences anymore (none in 18 months that I know of), and I defy you to find any reference to the words nanotech or nanotechnology anywhere on the home pages of VC and research analysts, Lux Capital or Lux Research (oh, wait, there is a banner ad for a conference on the Research homepage that has the word). Cleantech, Greentech, Alternative Energy, emerging technologies and even “de novo investments” (huh?) are now the catch words used by these folks who jumped on the NANO-bandwagon and now are jumping off that terminology fast as the money gets tight.

Hey, I don’t blame them. I’ve been using the phrase “small & advanced technologies” myself for the better part of 3 years!

But I was saying the bad times were coming back then – while many of these folks were incorrectly trumpeting the new millennia."