Clearing Up HydroGraph Confusions

Matt Kreps, VP, HydroGraphs Investor Relations provides valuable information.

This week I received the following message from a paid subscriber regarding HydroGraph.

Jay, please consider & try to answer these concerns about Hydrograph

1. They promise hundreds of tons annually, but have yet to make one metric ton. At the least this would be genuine capital produced, & at the most this might attract genuine large buyers. Are they really able to make graphene ‘at scale’? The larger the scale, the larger the explosion.

2. They brag about partnering with a startup in Sri Lanka which has no products. No company which would use even a ton annually has surfaced.

3. I grant that the patents acquired & applied for have real value. But the scalability claim is the crux of the argument for HGRAF—-they have not explained why they don’t own more graphene right now.

I most certainly could have answered them myself but I thought I might do well to contact Matt Kreps, Vice President, HydroGraph Investor Relations for an official answer and likely a better one than I could give. I’m glad I did because here are Matt’s answers:

Matt’s Answers

“Hi Jay - let make this really easy, but also give additional context. Yes, we have produced a ton. We run the reactor in Manhattan almost every day. The 10 ton per year capacity is not theory. And it’s actually a bit conservative. We are also building additional units to grow capacity, which will be in Manhattan and Austin to start.

“I was there a few weeks ago and we were rearranging some of the facility around new inlet piping from the acetylene bulk pack storage. We had pallets set out as part of rearranging the facility, each with several hundred kilos of graphene packaged on them.

“Second, this investor misunderstands production. It is not larger scale equals larger explosion. Yes, we have grown the cylinder capacity to the current size. But scaling production is about having larger numbers of Hyperion reactors, not just bigger chambers.

“Sri Lanka is an older item and not a focus. I’m not sure why people are suddenly asking about that - my guess is some message board comment and not paying attention to the company comments about the pipeline - which is US and EU focused for most of the deals.

“Finally, inventory graphene is not “capital produced.” It is capital converted to inventory. And while showing we have supply on the shelf is important at a certain point, that is not an issue for customers.

“Nobody who understands the business has any doubts about scalability. The time factor is centered on the time required to integrate into an industrial process - something people seem to not fully appreciate the steps involved, especially for a large company.

“That doesn’t happen overnight, and we are just now getting to the point in the 18-24 months we estimate it takes to start seeing deal activity. Obviously we are excited and positive on where we stand, but don’t control the timing of deals. So we are doing everything we can on our side of the table, and the customers are working through their processes to get to a deal as well.

“I hope that gives some added clarity for the investor.”

Thank you Matt. I believe it answers and greatly clarifies the questions asked.

By the way, please send along questions via Substack. I will try to find the answers as I have time answer and where necessary research them.

Best wishes,

Jay Taylor