Information Memorandum Related to Licensing of Patented Technology and Trade Secret Know-How of TITV Technology 27 September 2016
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1 Information Memorandum Related to Licensing of Patented Technology and Trade Secret Know-How of TITV Technology 27 September Overview of Smart Textile Technology Available for Licensing Luxtura, LLC ( Luxtura we or us ), a Colorado, USA Limited Liability Company is the contract partner for commercialization and Exclusive Licensee of the right to use and sublicense others to use (for making and selling products) certain proprietary technologies developed and owned by The Textile Research Institute of Thuringia-Vogtland, Greitz, Germany ( TITV ). The technology licensed to us ( TITV Technology ) is comprised of certain patents (Patents WO 2004/ A1, EP (TR, CH, LI), US A1/8,431,185 B2 (USA), JP (Japan), and proprietary processes, techniques, materials, know-how and methods within the field of Smart Textiles as defined below. In general, Smart Textiles means textiles that incorporate electronics or other materials that can sense and react to environmental conditions or stimuli from mechanical, thermal, chemical, electrical or magnetic sources, including: Passive Smart Textiles: Textiles, which can only respond to an environmental condition or stimulus. Active Smart Textiles: Textiles incorporating materials that include programmed actuators and sensors such as thermal-regulated, vapour absorbing, heat evolving fabric and electrically heated wearables and fabrics that can alter their elasticity in response to information about how much strain they are under. Ultra Smart Textiles: Textiles which can be processed and programmed so as to sense, react and adapt themselves to environmental conditions or stimuli and incorporating fibres and textile materials, and miniaturized electronic components to create wearables or accessory items that can be worn or used like ordinary clothing or coverings, but provide functionality that is needed or desired in various operating environments or situations according to the custom-designed applications. Patents related to the TITV Technology available for licensing through Luxtura encompass proprietary thread materials having a high level of conductivity while retaining textile properties, special thread constructions (fancy yarns, braiding), and include know how required to produce fabrics with these materials (via weaving, warp knitting, and embroidery). In respect of electroluminescent textiles, the TITV technology includes circuitries based on woven structures and special coating technologies that enable production of luminescent textiles. { / 1}1
2 2. Background and Sources of Market Information Smart or intelligent textiles are functional textiles, which interact with their environment by responding to it. This response can be either a (visible) change in the materials properties or result in communicating the environmental trigger to an external read out. * *The definition quoted is from the European Union s SYSTEX Vision Report ( SYSTEX Report ) published in Smart Textiles are functional textiles which may include user or monitor-activated responses as well as responses triggered automatically by interaction with external or environmental factors. These responses can either be a visible change in the materials properties or a pre-programmed process activated upon detection of an event, change or environmental stimulus or upon action taken remotely based on an external read-out. There is a huge market potential for electroluminescent and Smart Textile product offerings in many areas including apparel/fashion, construction and architecture, interior design, protective apparel in defense and protective services, healthcare, sports/wellness and adaptations to unique and extreme environments. The SYSTEX Report estimated that this sector represents a USD $127 billion global market. An excerpt of the SYSTEX Report below lists a number of application areas that have been identified and an excerpt which appears on the next following page illustrates the supply chain constituencies of the Smart Textile industry. The sections which follow include links to video presentations filmed by Luxtura on site at the TITV Research facilities which show some of the production processes related to the technology and showcase various product solution prototypes that have been developed. { / 1}2
3 Video Overview of Smart Textiles Wearable Smart Textiles for fashion, sports training and special environments The visual impact of textile products manufactured utilizing electroluminescent technology aligns with a vast range of fashion apparel uses. Wearable Smart Textiles can also enable unique functionality, such as enhancing visibility in fire and fog, and providing a broad scope of computational, monitoring and other robust functionality within a flexible, breathable and lightweight textile garment or accessory. The wearer may not even feel that he or she is wearing a monitoring or computing device because the sensors and actuators can be brought close to the body and positioned for optimal comfort. Wearable smart textile products can monitor physiological functions and deliver any pre-programmed action or response. Smart textile products can respond to events or environmental conditions when the wearer cannot do so for himself, potentially activating embedded cooling functionality (when a danger of wearer overheating exists) or providing heating protection against hypothermia in extreme low temperature environments where the wearer may be asleep or rendered unconscious. Video of Applications in Security, Sports and Health Security and protective services Smart Textile technology-enabled clothing can significantly improve the safety and effectiveness of the performance of first responders in disaster contexts, such as firefighters and operators at chemical plants and police and security personnel. The safety of personnel can be increased by enhancing visibility of personnel when desired or by controlling the extent of visibility (e.g. creating and modifying coloration related to camouflage) and triggering pre-programmed automatic responses should the wearer be rendered unconscious. { / 1}3
4 Healthcare Applications related to healthcare include continuous monitoring systems related to detecting symptoms of illness, stress levels and monitoring physical condition (body temperature, heart rate and blood pressure during activities), and tracking patient location. Increasing interest exists in areas such as use of textile products for biofeedback-based conditioning regimes such as controlled breathing, and in medical treatment contexts via use to monitor temperature, blood pressure and other symptoms. Functional clothing or blankets and other textile products can be programmed to trigger warming or cooling based on monitored changes in body temperature. Aging populations present concerns that can be addressed with Smart Textiles. Those living independently but at a distance from healthcare facilities can use textile products embodying the technology to provide information to remote health care professionals or to deal with contingencies and emergencies such as loss of heating or cooling systems during power outages. In the case of healthcare facilities or assisted living facilities serving older patients who benefit from freedom of movement and social interaction but who need to remain on-site for their own security, wearable textiles can enable patient location monitoring and tracking without need for obtrusive hardware devices. Other uses include integration of substrate-based sensors and actuators incorporated within textiles as functional, ambient components of structures and systems related to optimal workplace and living space environments and in developing products to monitor or actuate required responses for survival during events or in environments involving extremely low or high temperatures. Future uses could include custom adaptations of Smart Textile technologies to design and develop more flexible wearable systems for field work on the surface of Mars that can enable greater mobility than the stiff bulky suits developed for microgravity environments while maintaining and monitoring essential pressure. Showcase Video of Limitless Applications Construction and Architecture In civil engineering, construction and architectural contexts, large smart textile substrates can bring the benefit of an embedded technology solution and its integration with interior and exterior aesthetic design features in hospitality venues. The technology can also be used in the manufacture of furniture, upholstery, floor coverings and carpets. Automotive In the automotive markets Smart Textiles can provide flexible and robust substrates for interior lighting and sensors related to driver physical condition and event triggers of standby lighting, emergency heating and other pre-programmed safety system responses. Heating of car seats is a functionality already incorporated in certain EU products deploying TITV Technology. { / 1}4
5 General Market Factors The visual impact in fashion and apparel and the functional utility of products manufactured for specific industrial applications utilizing the TITV Technology aligns with a short time-to-market for most new product applications and a significant lifespan of these value added products. The availability of this technology for licensing to private industry and certain public sector eligible End User Licensees enables licensees to derive near term economic benefit from years of leading edge research undertaken by TITV scientists in Germany. The Smart Textiles sector today reflects the unique transition of Europe s historically significant textile industry. The availability of lower cost manufacturing services in Asia and India in recent decades represented a major setback for the European textile industry but coincided with the advent of affordable technologies enabling miniaturization of electronic components capable of being incorporated in textiles. Thus major European textile centers such as Greiz, Germany became research centers and companies like TITV became the vanguard of Europe s current Smart Textile industry. 3. Customer Co-Development Opportunities in Licensing The challenge to develop practical technology product solutions is best addressed by interaction with industry users. In some cases, co-development with a leading industry participant (including designers, manufacturers, brand owners and solution providers) may be pursued whereby a leading or representative customer/prospective licensee within industry sectors desiring a technology enabled product solution agrees to contribute information related to its business case (facts and objectives) along with access to its facilities and personnel for testing and refinements in a collaborative effort to adapt core technology to design and manufacture optimal product solutions. In exchange for contributing its business facts and access to facilities and personnel to this effort the collaborating prospective end user licensee may receive a discounted license fee and/or a limited duration exclusivity of licensed rights to manufacture a certain type of product. Luxtura, LLC 5650 South Alexander Court Greenwood Village Colorado 80121, USA { / 1}5
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