Editor’s note: Many of the most promising high-tech, biotech and pharmaceutical firms will be presenting at the annual venture capital conference sponsored by the Council for Entrepreneurial Development. The event will be on April 27-28 in Chapel Hill. As it has in the past, Local Tech Wire will profile presenting companies that wished to participate in a Q&A.A startup in Chapel Hill could be a major player in the emerging field of nanotechnology.

Led by an international expert in the field of nanotech research and with international investors already contributing, Xintek has generated $350,000 in revenue this year. It is looking for investors to help fund expansion efforts in further research and development and sales.

“Our miniature x-ray tube will reach the market in the second half of 2004,” says Shan Bai, the chief executive officer. “In micro computed tomography area (a technique for generating a cross-section of a human body through x-rays or ultrasound), we already have a working prototype, which is being used by researchers of UNC medical school. We expect to commercialize this technology within two years.

The potential market for Xintek technology is not nano-sized. “Our technology can be used wherever electrons are needed in vacuum environment. Total market size for application of our technology in x-ray and display alone is estimated at $1 billion,” Bai says.

The company also appears to have an edge in technology, holding more than 20 patents.

Xintek is led by Dr. Otto Zhou, who has a strong background in nanotechnology. Zhou, a PhD, is the founding director of the North Carolina Center for Nanoscale Materials, which includes 25 scientists from Triangle universities. According to Xintek, the center is one of the largest federally funded efforts for nanotube development.

Zhou is also credited with 10 patents or patent-pending developments relating to Nanotechnology. He has published more than 60 scientific papers, review articles and chapters in books.

Bai, the chief executive officer, came to Xintek after five years with JP Morgan and Union Bank of Switzerland. She has also served as in-house legal counsel for a Swiss firm.

Chris Debbaut, director of marketing development, spent 25 years in research and development for a number of firms.

Xintek’s responses to Q&A:

Given the difficult investment climate, have you explored or used other means of getting funds than venture capital? If so, please explain why you remain interested in venture capital.

We are also talking to private investors. Venture capital firms are still a major fund source.

Are investors telling you that the climate for making deals is improving?

No.

If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”

We are a nanotechnology company, which not only has huge market potential, but also has near term products. Our miniature x-ray tube will reach the market in the second half of 2004. In micro computed tomography area, we already have a working prototype, which is being used by researchers of UNC medical school. We expect to commercialize this technology within two years.

What makes your company unique? Do you have a proprietary and/or a patented technology? Please explain why it is unique and what the status is of any patent filings.

We believe we enjoy leadership in producing carbon nanotube based material and devices for field emission application. We hold over 20 issued / pending patents related to field emission of carbon nanotubes. We hold one of the earliest patents on application of carbon nanotube in x-ray tubes, which can be interesting to many x-ray tube manufacturers, which are conducting research in this area.

What makes your product(s) and/or services unique vs. your competition? (Who is your competition, and what do they offer?) If you have no competition, why not?

Quality of the products and technologies.

Does your company already generate revenue? If so, how much? Are you cash flow positive?

Yes. For 2004, $350,000 year to date. We are not cash positive.

What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?

Our technology can be used wherever electrons are needed in vacuum environment. Total market size for application of our technology in x-ray and display alone is estimated at $1 billion.

What will you do with the invested funds? What is the timeline for product delivery? If you have existing products and services, how will additional funding help you expand your company, if that is the intention, or will you develop new products?

We need the funds to further our R&D effort in x-ray and display areas. Additional funding will facilitate the commercialization pace of some of our technologies.

What do you want from an investor other than money?

Introduce our company to potential customers / strategic collaborators.

Why will investors be impressed with your management team?

Our board member, Dr. Uli Sigg, who is actively involved in ANI’s operation, used to be chairman and CEO of Schindler AG, the worldwide leading elevator company. Mr. Chris Debbaut, our business development VP, had over 25 years of experience with Raychem (now part of Tyco) in identifying and commercialization of new technologies.

What is the exit strategy for the investor from your company? Are there potential strategic alliances with larger companies? Do you wish to take the company public? Or do you wish to grow the company and either sell it or acquire other companies?

We are in strategic alliances with major x-ray tube manufacturers. We intend to take the company public.

Just the facts on Xintek: www.localtechwire.com/article.cfm?u=7904