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Constituent Review
J. Andrew Braswell, Equity Analyst Newbridge Institutional Research Data as of 3-30-07		Quote/News
		Nano Electronics

Review
12/27/06- CDT announced that it issued 200K common shares to four employees, in accordance with its stock compensation plan. David Fyfe, Chairman and CEO, was issued 140K shares and S.B. Cha, VP, Commercial, was issued 48K shares. In aggregate, 73K of the issued shares were sold to settle tax liabilities, as specified under the terms of the plan.

1/04/07- Announced that it had acquired the assets of Next Sierra, Inc., a CA-based company specializing in the development of OLED display driver chips. The acquisition will be made with an undisclosed amount of CDT stock, with payment based upon technology development milestones staged over the next twelve months.

3/01/07- Announced Q4 results after the close. The company reported revenue of $3.3M (-55% Y/Y) and a net loss of $5.3M, or $0.25 per share. The results bested the consensus estimate for revenue of $3.0M and a net loss of $0.30 per share. CDT ended the period with $19.3M in cash.

3/12/07- Said that a jury had awarded $4.9M in damages to a plaintiff against Opsys Limited, a subsidiary of CDT. The suit alleged breach of lease on a property in Fremont, CA, which Opsys represented as validly assigned to a different company prior to its acquisition by CDT in 2004. CDT says that it does not intend to assist Opsys with funding the damages and that Opsys has no assets and no IP that is relevant to CDT’s business.

3/27/07- Announced along with its Sumation JV that it has achieved substantial lifetime increases for red, green, blue and white P-OLED materials. Data results indicate lifetimes equivalent to over 150K, 198K, 62K and 27K hours for red, green, blue and white, respectively, at an operating brightness of 400cd/sq.m. This represents respective improvements of 5x, 11x, 6x and 5x since the end of 2005.

Commentary
Coming off of an anomalous one-day rally on the last trading session of 2006, shares of CDT were the third-worst performing NNIX component in Q1 with a 23% decline. The stock continues to be extremely volatile, with a high beta and average volume of only 45K shares. The cash received from licensee Matsushita in Q4, representing 50% of the total license fee, should help keep the company afloat through the end of 2007, but CDT will need to raise capital soon thereafter barring some unforeseen infusion. Cash used in ops fell from $11.3M in 2005 to $4.4M in 2006, but we expect this rate to increase once again in 2007 unless significant licensing or milestone payments are earned. This is shaping up to be a pivotal year for OLED displays as small screen applications are expected to proliferate and some TVs (around 25”) should reach the commercial market.