Archive for August 20th, 2012

Date Certain M&A of AQT Solar, Inc.

www.gerbsmanpartnes.com Gerbsman Partners has been retained by AQT Solar, Inc. (http://www.aqtsolar.com/ ) to solicit interest for the acquisition of all, or substantially all, of AQT’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “AQT Assets”).

The sale is being conducted with cooperation of AQT.  AQT and its employees will be available to assist the purchasers with due diligence and assist with a prompt and efficient transition.


The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to AQT’s Assets has been supplied by AQT Solar, Inc.  It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, andcompleteness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of AQT Solar, Inc.’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the AQT Solar, Inc.’s Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on or behalf of AQT Solar, Inc. and Gerbsman Partners.  Without limiting the generality of the foregoing, AQT Solar, Inc. and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the AQT Solar, Inc. Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non disclosure agreement attached hereto as Exhibit A.


AQT Solar, Inc. (“AQT” or the “Company”) was founded in 2007, to develop and exploit a high-volume; low cost production process for building solar cells based on copper-indium-gallium-selenide (CIGS) and copper-zinc-tin-sulfide (CZTS) materials. The company’s unique, patented, proprietary process has been developed on a platform architecture that allows for continuous cost and efficiency improvements.

AQT is a privately held, private investor backed company. $32.2 million was raised by the company in its first two funding rounds.

AQT presently employs approximately 34 full-time employees and its product development and pilot line is based in Sunnyvale, CA.

Cost is the fundamental metric of market competitiveness in the solar business. AQT’s unique value proposition delivers the best-in-class costs in three distinct ways:

1)    Use of production-proven high-volume equipment enables world’s lowest TFPV Capex of $0.32/W at scale.

2)   Small form-factor cells (equivalent to Silicon cells) enables a rapid R&D learning curve, which coupled with the low equipment Capex is projected to deliver the world’s lowest module cost of £$0.50/W at scale.

3)   Utilization of a Silicon compatible module structure leverages existing backend capacity, costs, and reliability metrics while simultaneously providing the electrical compatibility to allow mix-and-match of AQT CIGS modules with standard Silicon modules in field installations. Thisinsures ready access to a market that has been growing at a 32% CAGR and therefore can facilitate a rapid revenue ramp.

These three components will enable AQT and its strategic partners to deliver the world’s lowest cost solar photovoltaic module. The company’s ‘low cost by design’ approach matches best-in-class thin film competitor costs in 2014 and remains well below the 10% discount benchmark that thin film suppliers are typically expected to meet.

AQT Solar, Inc. believes its assets are attractive for a number of reasons:

The Company’s proprietary process technology leverages off-the-shelf equipment to build standard-sized solar cells. The central piece of equipment provides automated “deposition” (i.e. “sputtering”) steps in multiple chambers. This approach directly impacts the numerator and denominator of the cost per watt ($/W) equation in multiple ways; and allows for continuous process improvement.

·       Low capital equipment cost – The equipment cost of the process currently stands at $0.43 per watt of annual capacity with a near-term target to bring this to $0.32/w, nearly half of the lowest estimates of silicon costs (wafer + cell). The use of readily available off-the-shelf equipment assures low technology risk and contrasts with other thin film competitors who spend large amounts to develop custom CIGS equipment with varying levels of success.

·       In-line volume cell manufacturing – During manufacturing the cell construction occurs in an in-line process, almost entirely conducted inside the machine in high-volume (as is done today with hard disks and optical disks such as CDs and DVDs), as opposed to other, costlier multiple-step processes (co-evaporation, chemical bath ..).

·       No extra back-end module equipment costs – The process results in standard small-format cells which are drop-in replacements for silicon cells and are packaged using standard silicon module-making equipment. This essentially requires no new technology or cost to build modules and basically eliminates the typical TFPV balance-of-system penalty due to the ease of fabricating large panels.

·       Rapid process development – The Company achieved its near world-record CZTS efficiency in less than 11 months, in contrast to the many years and significant investment required by IBM, the current record holder.  The Company’s rapid success is an inherent feature of its’ novel automated multiple deposition process that allows rapid and precise experimentation with processes and materials.

Longer-term advantages that have been demonstrated today and are scheduled to enter volume production in the next two years include:

·       High-efficiency Nano-engineered structures – The automated, multiple-deposition process uniquely allows for construction of band-gap graded or quantum confined architectures that capture more of the sun’s energy. Sophisticated CIGS structures are problematic with large-area formats using roll-to-roll processes (e.g. Miasole and Solopower) or inks and paints (e.g. Nanosolar).

·       Dual-sided cells – The process can produce dual-sided (“bifacial”) solar cells adding 15-25% in efficiency gain; a 14% efficient bifacial CIGS or CZTS cell thus exceeds the performance of 16%+ silicon. This is difficult or impossible with other silicon or CIGS processes but is achieved with little impact on manufacturing cost using the Company’s process which comprises a machine already designed for dual-side devices (hard disk drives).

·       Use of CZTS materials – The use of CZTS reduces active material costs by 85% resulting in 12% cheaper modules. The Company’s 9.4% CZTS is close to the world record of 11.4 % held by IBM, whose process, despite being costly and complex (metal slurry spin deposition process), is receiving high interest (licensed to Solar Frontier and Del Solar). CZTS should match CIGS efficiency in the 2014 timeframe providing a notable cost per watt advantage.

AQT Intellectual Property Summary

AQT has extensive protected intellectual property consisting of 25 U.S. Patents applications; granted (2) and/or filed (23) in core process technology and critical up and downstream innovations. In addition there are 21 International Patent applications filed. All, the patents are wholly assigned to AQT. AQT’s Core IP is primarily in the area of technologypertaining to sputtered elemental, alloy and compound targets in conjunction with thermal processing. The result is: 1) broad flexibility in the choice of starting materials, 2) tight control of constituents and of process reactions, 3) simple construction of complex materials and/or structures, 4) ready attainment of high yields and productivity, 5) simple production implementation and control, 6) attainment of best-in-class cost basis at scale. The patentportfolio represents a broad array of strategic variables including:

·  Proprietary CIGS and CZTS target (raw material) formulations and novel methods of fabricating the same
·  Novel CIGS and CZTS solar cell device structures and designs including future high efficiency quantum confined structures
·  Simple pathways for the fabrication of CIGS and CZTS solar cell absorbers using PVD (sputter) deposited pre-cursors and methods for the inclusion of selenium at this step instead of the conventional complex selenization process
·  A variety of novel enclosures and fixtures to enhance the thermal processing of CIGS and CZTS solar cell absorbers
·  Creation of bandgap graded structures using coated donor covers and enclosures in the annealing process
·  Novel cell interconnection designs and configurations

AQT Market and Competition

Today’s solar industry is largely dependent on Silicon, for which little IP or barriers to entry exist, resulting in extreme cost competition driving many tier-2 players, and even some tier-1 players, to exit despite robust demand fundamentals. To compete on a $/W basis, remaining silicon players must endure expensive recapitalization to produce better (multi-crystalline or mono-crystalline) silicon processes. An estimated capital investment of $0.62/W or more of integrated cell manufacturing capacity is required to reach what is likely to be a long-term, floor module production cost of around $0.60/W (current module costs are $0.70 to $0.85/W). The Company believes its’ process requires close to half of the silicon capex upgrade burden to achieve a significantly lower floor module production cost. It follows that a strategic partner will invest much less capex, to produce modules that cost much less.

Cell + Module Capex Costs’ Effect on Module Costs, 2012 (GTM Research, 2012)
At scale, the Company’s process is projected to achieve both capex and manufacturing costs lower than silicon. When combined with continued reduction in balance-of-systems (inverters, mounting, racking, etc.) pricing, this solution represents the most viable pathway to Levelized Cost of Electricity (LCOE) rates of less than 10 cents/watt within the next 36 months, on par with conventional non-renewable energy sources.

CIGS processes such as roll-to-roll, inks and plating require complex and costly development of new types of manufacturing equipment, are problematic for complex and higher-efficiency nanostructures, and have balance-of-systems (BOS) cost penalties in the case of monolithically integrated modules (higher voltages therefore fewer modules per string). The Company avoids all these challenges by using off-the-shelf equipment to make low-cost discrete cells that can be packaged into high-power/low-voltage modules using existing silicon packaging equipment and capacity. A further advantage of the Company’s approach is that its’ modules can be seamlessly integrated with silicon modules in blended installations to optimally satisfy both cost and bankability requirements.

In spite of its current difficulties, the solar PV market is just getting started. The projections are for 30GW growing to 100GW+ per year to be installed through the end of the decade. The resulting TAM will be in excess of $500B. It followsthat it isn’t too late for a new entrant with a disruptive technology and that the size of the market makes the taking of an intelligent risk more than worthwhile, particularly when significant new capital expansion is undertaken in the next few years.

AQT Technology Solutions
The Company’s unique process is tailored to run on low-cost, high-volume and production proven equipment. Fitting the process to the equipment, while the mainstream approach in the semiconductor industry, has not been the norm in the Solar PV thin film industry. This has resulted in a long and high investment cost equipment development cycle being required by AQT’s thin film competitors. By skipping this step AQT has been able to make efficiency improvements (relative to months since founding) significantly faster and at a much lower investedcapital than its thin film competitors.

The AQT process results in a streamline, fast-cycle-time, dry (sputtered) process that can fabricate a completed CIGS or CZTS solar cell in just hours. A unique set of compound targets mimics the CIGS reaction, which allows for a short, lowtemperature, Selenide-Free anneal. This last is critical as the selenization process, besides being environmentally sensitive, has historically been themost difficult step to control in conventional CIGS cell production and is the bane of many of AQT’s CIGS competitors. The company’s process also incorporates band-gap grading for high efficiency and has already yielded intrinsic efficiencies of 15.6%. Finally, the same basic process has been demonstrated to be applicable to both the CIGS and CZTS material set. An interesting aspect of the technology is that the precise process pathways adopted to give the final CIGS (or CZTS) structure, aside from being protected by patents and trade secrets, cannot be reversed engineered.

The net result of AQT’s differentiated strategy is a business plan based on the following three principles:

Production Proven Equipment + Small Cell + Simple Process

Taken individually, each of these three components may not appear to be that powerful. But collectively the resulting learning rate have enabled AQT rapid progress to date and will enable the company to catch up with the Best-in-Class CIGS suppliers in 2013 in a highly capital efficient manner; literally requiring hundreds of millions of dollars less investment than equivalent competitors.

AQT’s Low Risk – High Reward Strategy
Delivers High Efficiency PV with Low Investment

 Fixed Assets

AQT has approximately $10 million of removable assets. The assets include analytical equipment modeled after NREL’s analytical lab, R&D & pilot production equipment, and facility support equipment. The analytical assets include: Hall Effect Tester; XRD and XRF Systems; Spectro-photometer; small and large IV Cell testers; Optical Microscope; LBIC Measurement System; Laser Profilometer; and various other test equipment. R&D & pilot production equipment include: Intevac 20 chamber PVD system; DEK Automated Screen Printer; Optek Laser Scriber; Belt Annealing Furnace; AJA 2 chamber, multiple target, PVD R&D system; and,various other production related equipment. Facility support equipment includes: chillers, back-up generator, compressed air systems, DI water systems and gas abatement systems.


AQT has developed a revolutionary thin film solar cell manufacturing & packaging paradigm resulting in:

·  proven, robust, low cost manufacturing equipment
·  simple & capital efficient process
·  flexible capacity increments
·  applicable to multiple material systems
·  flexible module design (size, power)
·  Silicon module materials & equipmentcompatibility
·  pathway to un-subsidized grid parity

Appendix: Key Personnel

The Company’s staff of over 40 employees includes eight senior executives having a combined 180-years of experience and 100+ patents in thin-film technologies with solid operation experience in establishing and growing major worldwide manufacturing operations, establishing and integrating international strategic partnerships and joint ventures, directing R&D and bringing technology platforms to market for companies such as Cypress, Kodak, Moser Baer, WC Heraeus, Seagate, Applied Materials, Hewlett Packard, Marvell, among others.

Dr. Michael Bartholomeusz
CEO and Co-founder
Michael brings over 15 years of executive experience to AQT Solar, and has consistently grown businesses organically and via joint ventures and acquisitions, throughout his career, including two manufacturing start-up companies in China. Michael’s expertise in global enterprise management— including operations, technology, organizational development, channel management and raw materials sourcing—have been instrumental to AQT’s growth to-date.  Michael holds a Bachelor of Science inPhysics from the University of California, Santa Cruz; a Master of Science and Ph.D. in Materials Engineering from the University of Virginia; and executive business credentials from The Darden School of Business and The St. Gallen Management Institute in Switzerland. He has 26 published and pending patents and is extensively published in refereed industry journals.

Mariana Munteanu
Vice President of Technology and Co-founder
Mariana has over 11 years of R&D and manufacturing experience in thin-film in the magnetic recording industry. Mariana came to AQT Solar from hard disk drivemanufacturer Seagate Technology. During her time with Seagate, Mariana played a pivotal role in the commercialization and release of advanced new media formats. As a recognized expert with a proven track record in the vacuum deposition of complex thin-film structures, Mariana is ideally qualified tomanage the cost effective mass manufacture of AQT Solar’s novel thin-film PV devices. Mariana holds a Master of Science in aeronautical engineering from The Politechnical Institute in Bucharest, Romania, and a Master of Science in mechanical engineering from San Jose State University.  She has also completed three years of graduate studies towards her Ph.D. in mechanical engineering at Stanford University.

Dr. Brian Bartholomeusz
Vice President of Corporate Development and Co-founder
Brian possesses over 21 years of international experience in the high-tech industry where he has focused on R&D, corporate strategy and business development in companies ranging from start-ups to large companies. Brian most recently served as executive vice president of strategic initiatives at Moser Baer, a multinational photo voltaic (PV) and optical disc manufacturing company, where he was responsible for technology acquisition, joint ventures and diversification initiatives, most notably in the PV space. As part of the core team that launched Moser Baer Photo Voltaic Ltd. from the ground up, Brian has broad domain expertise and a global network of contacts in the PV technology, manufacturing and business segments. Brian holds a Bachelor of Arts in chemical engineering from Cambridge and a Ph.D. in materials engineering from Stanford University.
Kaichui “Skip” Wong
Vice President of Operations
Skip has spent 20 years of his career in the semiconductor industry, focusing on process technology development and operations. Skip most recently served as executive vice president of operations and sales for Leadis Technology Inc., where hesuccessfully built a global operations organization and improved the cost structure. Skip holds Bachelor and Masters of Science degrees in electricalengineering from Case Western Reserve University, and an Executive MBA Degree from Harvard Business School.

Rajeev Krishnan
Vice President of Business Development
Rajeev has over 20 years of business development, sales and marketing experience. At AQT, Rajeev is responsible for developing and implementing the world wide go-to-market strategy for the company’s CIGS cell technology and products. Prior to joining AQT, Rajeev worked as senior vice president of strategy and business development at Moser Baer Photo Voltaic Ltd. for four years. Whileworking at Moser Baer, Rajeev was responsible for developing international markets, while developing a competitive strategy focused on competitor weaknesses and segmented markets. Rajeev holds a Master’s Degree in environmental engineering from Oregon State University and a Masters of Chemical Engineering and Bachelor of Chemical Engineering from Madras University in India.

Gene Altomari
Vice President of Finance
Gene has over 30 years of financial, controller and operations experience with high-tech companies including Applied Materials, Material Research Corp, and WC Heraeus GmbH. As the CFO and general manager of one of WC Heraeus’ largest global manufacturing sites, he was responsible for ramping manufacturing and operations to meet market demand, while at the same time updating and implementing ERP systems from 4th Shift and SAP, and securing ISO certification. Gene has a Bachelor of Science in business and finance from Manhattan College and an Executive MBA from The St. Gallen Management Institute in Switzerland.

Dr. Yuanda “Randy” Cheng
VP and GM China
Randy is responsible for developing and managing strategic partnerships in the Greater China region. He has over 20years of experience in thin film materials, devices, and business development.  Prior to joining AQT Randy distinguished himself in senior management and executive positions at world class companies such as Seagate, IBM, Akashic and WC Heraeus.  Most recently Randy was Vice President for WC Heraeus’ Thin Film Material Division, China.  Randy holds a Ph.D. in Physics from Arizona State University as well as an EMBA from China Europe International Business School.  He is a six Sigma black belt with a very successful track record of implementing six-sigma methodologies in manufacturing to drive yield improvement and cost reduction. He holds 10 US patents in thin film materials and devices.

Appendix: Summary of AQT Solar, Inc.’s Carry Forward Losses
Currently AQT has a loss carry forward of approximately $19 million Federal and $10 million California. This amount is expected to increase by an additional $11 – 12 million in 2012. This implies a total potential loss carry-back and/or forward to an acquiring company of approximately $30 million Federal and $20 million California. The benefit to an acquiring company is limited to 3.26% per year (current limit, subject to change) of the purchase price. Note that these losses will not carry forward in the case of an asset sale.

The Bidding Process for Interested Buyers

The Bidding Process for interested  and qualified parties will be required to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”).  Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the AQT Solar, Inc.’s Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the AQT Solar, Inc.’s Assets.  A sealed bid must be submitted so that it is actually received by Gerbsman Partners no later than Thursday, Sept 20th 2012 at 3 p.m.Pacific Daylight Time (the “Bid Deadline”) at AQT Solar, Inc.’s office, located at 1145 Sonora Court, Sunnyvale, CA – 94086. . Please also send an email to  steve@gerbsmanpartners.com with your bid.

Bids should identify those assets being tendered for in a specific and identifiable way.  The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of AQT Solar, Inc.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to AQT Solar, Inc.). The deposit should be wired to AQT’s attorneys Murray & Murray, a Professional Corporation. The winning bidder will be notified within 3 business days of the Bid Deadline.  The deposit will be held in trust by Company’s counsel.  Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful bidder.  AQT Solar, Inc. reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

AQT Solar, Inc. will require the successful bidder to close within a 7 day period. Any or all of the assets of AQT Solar, Inc. will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.  All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the AQT Solar, Inc. Assets shall be the sole responsibility of the successful bidder and shall be paid to AQT Solar, Inc.’s at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

Steven R. Gerbsman
415 456-0628

Kenneth Hardesty
408 591-7528

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