Manufacturing Site Repurposing Options What does the future hold in store… & What is the Value Proposition?

BUSINESS RESEARCH Repurposing of Manufacturing Site

Current Manufacturing Site Strategies Company X – Launches website xxxcoating.com – Picks up film production from OM Companies – Aggressively going after other film products – Recently installed a number of capital upgrades & attending conferences/new website – Sees growth out into the future past conventional films and planning for it… Company Y – Aggressively competes and wins graphics products – Redesigns some current film offerings to compete in the future – aggressively competes in Indian film market

Current Manufacturing Site Strategies Conferences/Coating Machine Manufacturing – AIMCAL /CEMA conferences held on a yearly basis held both in Europe and US (well over 100 exhibitors & many seminars) – A number of companies still exist for making coating machines including bead and curtain coaters Our Company – Have some small contracts with outside companies for pilot services – Have a history of outside companies contacting us for services – Has very limited web presence and mainly for pilot capabilities – Have done prior repurposing studies and found some outside business opportunities

Marketplace Data around Coating Coating Market Research Reports: – Global Market for Thin Film Materials to Reach $14.9 Billion in 2016 (Electronics.ca Research Network): – Global Markets, Technologies and Materials for Thin and Ultrathin Films -- Focus on Electronics (Reportlinker.com ): “The global market for thin film technologies (including equipment, materials and services) is currently valued at more than $50 billion and continues to grow.”

Manufacturing Capabilities Manufacturing capability – wider than we think: The current manufacturing structure has been driven by the requirement of extremely uniform and robust photographic films: The current manufacturing site can coat a much wider array of products than just conventional AgX films – At lower flows; moderate speeds – can coat close to water viscosity – At moderate flows/speeds coating is capable for a wide array of viscosities – Could use a wide array of various polymers and solvents – Can use to coat a variety of surfaces (coat smooth and rough substrates) and can use multiple slot dye configurations – Much of the research looking at manufacturing site capabilities was done in the 80’s through 90’s – Pilot capability to demonstrate still exists to assess these alternate systems

Manufacturing Capabilities Comparing different coating systems – thickness operating range: Many coating technologies overlap each other in terms of capabilities

Patent/Development Activity in Manufacturing Field (since 2000) There have been over 50 patents issued around coating in the last 10 years: Much technical activity in the area, coating type is a “buzz” word at coating conferences…

VALUE PROPOSITION OPTIONS Repurposing of Manufacturing Site

Value Proposition Options Film Flow Options Entire Film Flow Options Manage to Film Decline Film&Tollcoating Transition to Functional Aqueous ML Coater Staging for Future Sale Degree of Difficulty/Resources

Current Approach – Manage to Volume Decline PROS: – Minimum cost CONS: – Film manufacturing discontinuance… – Lose uniform aqueous multilayer coating capability forever

First Strategy – Film & Toll Manufacturing PROS: – Extends the life of film – Keep cash flow positive for a longer period of time – Maintains manufacturing capability of functional materials CONS: – Little tollcoating opportunities that make significant money – Manufacturing optimized for film – need to update facility & maintain resources Extend Life of Film Film& Tollcoating Tollcoating OM Materials Tollcoating Functional Materals

Second Strategy – Aqueous Functional Printing Manufacturing PROS: – Extends the life of manufacturing site – Could provide a method for both commercialization and manufacturing of future products – Could provide a multitude of coating options if capital is available CONS: – Not part of current vision – No active esearch on uniform aqueous materials – Significant effort to get to a low variable cost, flexible manufacturing facility Film&Some Tollcoating Operations Transition to Functional Aqueous ML Coater Aid in Commercialization Path for Functional Printing Products Functional Printing Manufacturing Capital Upgrades Uniform&Additive Functional Printing Manufacturing

Company Future Vision To be a provider of higher margin specialized materials that have the following characteristics: – High resolution – Range of patterns – Utilize material property/formulation expertise

Last Strategy – Manufacturing Site-> Sale to Outside Investor PROS: – Generates cash for Company – Removes assets from company that are not part of the future vision – Keeps jobs and tenants at site CONS: – Would require significant resources & budget for establishing a potential future product portfolio & improving site for future sale – High risk but high payback – May already be too late to explore & execute Continue Film Operations& Initiate Tollcoating Staging for Future Sale Establish partnerships Establish portfolio of future products or revenue Streamline& Increase Flexibility of site

WHAT DOES THE CURRENT MANUFACTURING INFRASTRUCTURE BRING TO THE TABLE? Repurposing of Manufacturing Site

Sustain and Grow Approach – Lean Development Approach New Products - Time to market, cost and quality – key factors Control of the development chain critical to success of new products Toyota, Microsoft, Harley Davidson and Kodak film – key examples Separates start-ups from true successful businesses

Sustain & Grow – Value Proposition Pilot and manufacturing value proposition: Path to commercialization and manufacturing (i.e. Product Development flow)

HOW DOES MANUFACTURING SITE FIT INTO POTENTIAL FUTURE PRODUCTS? Repurposing of Manufacturing Site

Functional Printing Market/Applications From:

Aqueous Coating Applications in Functional Printing Coatings – protective coatings such a polymeric resins, overcoats to adjust gloss, lubrication (release agents) etc Conductive materials

Aqueous Coating Applications in Functional Printing Display – holographic films, 3D imaging EMI – technology to reduce electromagnetic interference Transistors – technology for circuit board backplanes – coupled with organic transistors

Aqueous Coating Applications in Functional Printing Fruit & vegetable containers with antimicrobial and slip coatings Smart walls, High Tech Building Materials (aircraft, space, military)

Aqueous Coating Applications in Functional Printing Fabrics and wall related materials Coatings with medications and regen film Coatings coupled with sensors

EFFECTIVE USE OF CURRENT MANUFACTURING FLOW Repurposing of Manufacturing Site

EFFECTIVE USE OF CURRENT MANUFACTURING FLOW

Value Proposition -> Staging of Manufacturing Flow Photographic film = first functional printing product! Functional printing materials could use the same product flow…. Why not repurpose flow into consumable material flow (usable for film or functional printing materials)? Use existing development, manufacturing, supply chain and market channels to move into functional printing arena without reinventing the wheel Partnership with other companies, universities etc to gain access to technology and new products

CONCLUSIONS & RECOMMENDATIONS Repurposing of Manufacturing Site

Conclusions 1.Current path will lead to discontinuance usage of the existing photographic film manufacturing site and infrastructure 2.Outlined a number of options to extend the life of the facility and reuse the existing infrastructure 3.A moderate market exists for toll manufacturing and maintaining current photographic film products 4.Largest opportunity but highest risk would be to pursue future products while using existing products & toll manufacturing to cover costs – this would also require capital expenditures 5.Last option would be to marginally improve facility and attempt to sell to perspective buyer.

Recommendations 1.Present and discuss options and research with senior management 2.Attain management support to do further studies looking at the business and technology potentials of the various options 3.Work with marketing and sales to identify potential toll manufacturing opportunities 4.Assess future staffing reduction impacts on potential strategies 5.Outline plan for path forward