Transcu

Transcu: penny-stock focus. Becomes exclusive distributor for the Nano-Emulsion Fuel System (NEFS), via its 60/40 JV with Nanomizer, an affiliate wholly-owned by Transcu CEO. Transcu will introduce NEFS into the Chinese market, and has signed a distributorship agreement worth US$0.5m with Shanghai Timeast, to market NEFS and related pdts to "certain pre-determined companies including a major Chinese oil company", for a period of 3 years…

NEFS improves efficiency in combustion systems by up to 20%, and is used in marine vessels, and potentially cars and power plants. Such technology is targeted at companies such as CNOOC, Sinopec, Universal Shipping...

Further catalyst to come from NEFS getting approval from Japanese authorities to be installed on ~200 ships. Each system costs btwn US$1-2m with est distribution fee of btwn 5-10%, and could contribute US$10-14m to earnings. This compares with net loss of US$29m in FYMar10. Mgt believes there are another 5000 new ships which will also want to install NEFS...

Separately, Transcu has received an option to buy up to 10% of Nanomizer shares. This may allow Transcu to have greater participation in the NEFS venture, and offers upside risk given CEO’s plans to list Nanomizer in future.