(Note: This is a unit IPO. IPOScoop has NO CALL on unit offerings that are not SPACs/blank-check companies. Novusterra’s unit IPO consists of 3.75 million units. Each unit consists of one share of common stock and two accompanying warrants, with each warrant to buy one share of common stock. This is a NASDAQ listing with the proposed symbol “NOVS” for the stock and “NOVSW” for the warrant.)

We began with the objective to build a Rare Earth Elements (“REE”) Processing Facility to process REE for commercial use. However, as approved by a Board of Directors meeting held on March 19, 2021, we changed our objective to developing graphene since we discovered research illustrating that graphene, similar to an REE, is a versatile commodity that could be helpful in solving major global problems with the potential for attractive earnings.

Graphene membranes are useful for the energy, nuclear, food and pharmaceutical industries. But graphene’s uses go well beyond those sectors.

A group of researchers from MIT showed that graphene can be used to filter blood from various types of waste, drugs and chemicals. Graphene’s superiority in this function lies in the fact that it is 20 times thinner than traditional membranes, which leads to significant decrease in the time spent in the dialysis for the patients.

Graphene is also used as a material to strengthen synthetic bone substitute for regenerated bone and dental tissues.

Graphene has the potential to lead to safer body scans in the future as well as to improve the waterproofing of electronics, according to the prospectus. Other uses or potential uses for graphene span a wide range of products and industries, ranging from a gel for elastic robots to water purification filters, durable shock-absorbent soles for shoes, headphones with better sound and lower energy use, and a carbon-fiber coating for airplane wings. 

Our decision to begin the process of producing graphene was made easier due to the relationship the company’s management team has with American Resources Corp. (NASDAQ: AREC) as a result of prior business activities. American Resources Corp., through its wholly owned subsidiary, Advanced Carbon Material LLC, signed the License Agreement with Ohio University to manufacture graphene using carbon as a raw material, using patented technology owned by Ohio University. The suite of patents was originally developed by Dr. Gerardine Botte, the current Whitacre Department Chair in Chemical Engineering at Texas Tech University. She is an independent board member of American Resources Corp. and chief technical officer of Advanced Carbon Material. Dr. Botte developed and patented these technologies when she served as Ohio University’s Distinguished Professor and Russ Professor of Chemical and Biomolecular Engineering.

The underlying License Agreement between Ohio University and Advanced Carbon Material was effective on Feb. 10, 2021. The term of the License Agreement runs from Feb. 10, 2021, until such time as the last of the Patent Rights as identified in the License Agreement expire pursuant to federal patent law. The License Agreement requires, among other things, that ACM maintain a bona fide, funded, ongoing and active research, development, manufacturing, marketing and sales program to diligently make, offer for sale and sell Licensed Products so that Licensed Products are currently available to the public as soon as commercially practicable, and fulfill various Diligence Milestone events identified in the License Agreement. The Diligence Milestones include developing a final design for a pilot facility to exploit the Licensed Product; completion of construction of the pilot facility; developing a final design for a commercial facility to exploit the Licensed Product; identifying feedstock material sources for the Licensed Product; completing construction of the commercial facility; obtaining the first commercial sale of product exploiting the Licensed Product; and obtaining net sales of a minimum of $1 million. The deadlines for these various Diligence Milestones run from Jan. 1, 2022, through Jan. 1, 2026.

(Note: There was some expectation that Novusterra, Inc. would price its unit IPO on May 3, 2022, but there was no pricing announcement on May 4, 2022, as of 8:57 a.m. EDT.)