Quest Patent Research Corporation (OTCQB: QPRC) ("Quest" or "Company"), an intellectual property asset monetization company, today issued an open letter to shareholders providing an overview on the Company's operational achievements in 2021 and outlook for 2022.
I hope this letter finds you safe and healthy. The world certainly feels different than it did at the time of our last update. Perhaps fittingly, so does Quest.
We here at the – improved - Quest believe it’s easy to find positives in the past twelve months for Quest, its accomplishments in 2021 and prospects for the future.
Restructure & Capital Facility
Certainly, the $27 million Capital Facility took the Gold Medal for developments in 2021. In case you missed it or have only recently found your way to Quest, February 2021 saw the Company close a capital facility of up to $27.0 million in acquisition and operating funds.
Pulling down the Silver Medal coming in at a close second place was the simultaneous extinguishment of the Company’s legacy secured convertible notes.
Last but not least, the Bronze Medal goes to the appointment of an independent director to the Board of Directors and formal engagement of a team of seasoned advisors to assist with ongoing strategic, growth and corporate finance initiatives. A sequence of events that can only be described as transformational.
As detailed below, beginning with regaining our listing on the OTCQB Venture Market, we quickly got busy putting the Capital Facility to work on several acquisitions and ramped up licensing efforts on the existing portfolio.
Acquisitions in 2021
On the asset acquisition front, as described in our most recent Form 10-Q filed in November, by September 30, the Company had deployed more than $1 million of the capital facility, acquiring the Peregrin, Taasera, Mulitmodal and Soundstreak patent portfolios.
Additionally, the existing Taasera portfolio was supplemented by a portfolio of 22 United States patents and 2 foreign patents acquired from Daedalus Blue LLC.
Peregrin Licensing LLC
Acquired in February 2021 and assigned to our wholly owned subsidiary Peregrin Licensing LLC, this portfolio consists of eight issued United States patents which generally relate to systems and methods for processing inbound and outbound communications. An example being determining the location of a caller and routing the inbound communication to an entity in the caller’s location.
The product of the innovative efforts of Michael Morency, President and CEO of Peregrin Services Corp, and his co-inventors, the patented technology has applications in, among others, the financial services, credit counseling and healthcare industries.
Initial licensing programs were launched in July 2021 with Bank of America, Wells Fargo, Discover Financial and US Bank. We were pleased to announce that the matters were resolved shortly after launch.
Taasera Licensing LLC
In May 2021, our wholly owned subsidiary Taasera Licensing acquired the initial portfolio of seven issued United Stated patents. In September, Taasera acquired an additional 22 United States patents and 2 foreign patents from Daedalus Blue LLC. The original assignees of the portfolio include IBM, Internet Security Systems, Inc. and Fiberlink Communications Corporation.
An initial licensing program was launched with Trend Micro in November 2021. The case is Taasera Licensing LLC v. Trend Micro Incorporated EDTX-2-21-cv-00441.
Multimodal Media LLC
Acquired in October 2021, the Multimodal Media portfolio consists of ten issued United States patents and one pending application which generally relate to systems and methods of recording and sending interactive messages and voice messages using mobile devices, as well as completing a communication after an incomplete call.
The Multimodal portfolio was originally developed by Kirusa, Inc., a communications software development company founded in 2001 by Inderpal Mumick together with a handful of technocrats from AT&T Bell Labs with a dream of connecting people through the power of voice.
Initial licensing programs were launched in December with Guangdong OPPO Mobile Telecommunications Corp., Ltd. (EDTX 2-21-cv-00436) and ZTE Corporation (EDTX 2-21-cv-00437).
Soundstreak Texas LLC
In August we secured the Soundstreak portfolio via an acquisition of all of the issued and outstanding equity interests of Soundstreak Texas, LLC from Soundstreak, LLC. The Soundstreak portfolio consists of three issued United States patents and one pending application which generally relate to streaming data (including audio or video) while also storing higher quality versions of the same data locally.
These pioneering patents were invented by David Coleman, who formerly held management positions at CBS and NBC, and Daniel Caligor, entrepreneur and CEO of Soundstreak and have applications in the professional recording industry, digital audio/video industries, the drone/remote capture industry, the teleconferencing industry, and more.
Soundstreak launched initial licensing programs in September 2021 with Panasonic Corporation, Nikon Corporation, Olympus Corporation, Sony Group Corporation and Yamaha Corporation et. Al.
We were pleased that in January 2022, the Panasonic, Nikon, Olympus and Sony matters were resolved. The Yamaha action is currently stayed pending settlement.
Licensing Program Highlights
In addition to the licensing campaigns launched in the newly acquired portfolios, Quest resumed its monetization efforts on the existing portfolios.
Audio Messaging Inc. (AMI)
The Audio Messaging portfolio consists of five issued United States patents and one pending application which generally relate to systems and methods for associating an audio clip with an object.
In October 2021, licensing programs were launched with ZTE Corporation (EDTX 2-21-cv-00379), Guangdong OPPO Mobile Telecommunications Corp., Ltd. (EDTX 2-21-cv-00380) and Beijing Xiaomi Mobile Software Co., Ltd. (EDTX-2-21-cv-00381).
CXT Systems Inc.
CXT initiated five licensing programs in March 2021 with The Sherwin-Williams Company, Advanced Auto Parts, Inc., Costco Wholesale Corporation, IKEA North America Services, LLC and VF Corporation.
These actions were resolved via licensing agreement with the defendants’ vendor, HCL Technologies Limited and HCL America.
MRED initiated eight licensing programs in 2021. Actions with Nintendo Co., Ltd., ASRock Inc., Mitsubishi Electric Corporation, Micro-Star International Co. Ltd., Giga-Byte Technology Co., Ltd. and Biostar Microtech International Corp. have been resolved.
Cases against Xiaomi Corporation et al (EDTX 2-21-cv-00077) and OnePlus Technology Shenshen Co., Ltd. remain pending (EDTX 2-21-cv-00297) remain pending.
Quest’s Strategic Plan
Our strategy remains deeply rooted in our philosophy that intellectual property is an esoteric, mispriced and inefficient asset class which is uncorrelated to the broader market and represents a compelling opportunity for companies and their shareholders.
With a proven ability to identify valuable assets and a stable of best-in-class counsel and experts to engage, we think Quest is well positioned for the opportunities ahead.
Our focus continues to be delivering long-term shareholder value. As one of the largest shareholders, I strongly believe value results from building a large, diversified asset base, and engaging those assets in strategically structured licensing programs.
Long-term shareholder value is not dependent on any one portfolio, patent, case or defendant. Rather than binary results of singular litigation opportunities, consistent engagement across a robust, diversified and growing portfolio of assets is the fundamental objective we must continue to pursue.
I am confident that Quest is well positioned to leverage the unique opportunities before us and are excited for the year ahead.
President & CEO
Statements made in this post include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of words such as "may," "will," "plan," "should," "expect," "anticipate," "estimate," "continue," or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate, and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading "Risk Factors" in the Company's Annual Reports on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.