Progressing As Expected

Though we have no breaking news to report, I wanted to touch base and inform that all our production efforts are progressing as expected. We will report back next week with any updates.

William B Smith
Chairman and CEO
Vu1 Corporation

Continued Progress in Preparation for Launch

As mentioned in our blog post last week, our team was running a final test of 400 lamps, which we planned to test and qualify early this week. I’m very pleased to report there we no testing deficiencies identified and we’ll continue to ship lamps to the USA for distribution to our potential partners in the electrical distributor channel.

We’ve recently purchased additional line and testing equipment that has given us the ability to double the original production capabilities immediately. This equipment was delivered this week and is being assembled as we speak.

We are currently working with our manufacturing partner to source components and develop better relationships with our supply chain for our next purchase order, which we feel will provide major cost savings.

We continue to provide exhaustive training for line workers, as well as our quality control workers, in an attempt to eliminate as much human error as possible.

Our goal is to commence full production on September 15 and not shut down again. We hope to begin shipping fully tested and qualified R30 lamps in relatively small quantities for sale in our retail channel during the first few weeks of October and build our volume daily as the line becomes more and more comfortable.

I will provide another update next week. We thank everyone for their patience and look forward to delivering great light bulbs in the near term.

William B Smith
Chairman and CEO
Vu1 Corporation

Follow Up From This Week’s Blog

We are pleased to report the final test run of 400 lamps is going well. We expect to have all assembly completed this weekend and remain on schedule to test and qualify beginning next week.

We’ve had a few follow up questions related to why we have experienced some recent delays and I’d like to address these. As anyone in business knows, no project will ever run seamlessly. Although we made every effort to account for unexpected delays, we experienced more than our fair share of “seams,” each one unpredictable.

Let me provide a recent example. When we moved from our former manufacturer, the inventory from the last purchase order was transferred. Upon arrival at our new facility, and after doing an extensive inventory analysis, we realized that many of the electronic components had been swapped for “similar” components that were less expensive. So, although our directive was to buy #9 Blue Diode, the manufacturer purchased #8.9 Light Blue Diode, assuming it was comparable. But “close” is not good enough, even at half the cost. We also found, during the same inspection, that the potting compound they planned to use was unauthorized. So, in order to meet our specs, we were forced to reorder components and the proper potting compound. Even if components are “off the shelf,” it takes time for them to come in and this resulted in one of our delays. We have learned from these delays and have put processes in place that will result in less opportunity for delays to occur in the future. For example, in this instance we have mandated a Vu1 employee work in concert with our new partner to ensure proper components are ordered and at the proper prices.

So much for the past; I’d like to share our thoughts for the future. Assuming our tests are successful next week, we are hoping to fill two separate purchase orders and complete them by year end. Investors should consider these to be to be in the “tens of thousands” of units. In December 2014, for manufacture in January 2015, we hope to initiate a third purchase order with our new electronics package that I referenced in a blog a few months ago. Assuming everything is running smoothly, this purchase order will be in the 100,000-unit range. There is a premeditated reason for the jump in volume and the introduction of the second-generation electronics package. With this strategy, we will be radically reducing component costs. So we will crawl, then walk, then run. We expect to continue ramping from that point. Of course all dates are projections that are not guaranteed, but we wanted to share our goals.

Our engineers are working with great ease with our new partners and the collective team is excited about our future. We hope to post an update next week.

William B Smith
Chairman and CEO
Vu1 Corporation

Good News From China

I am pleased to announce that today I received the first shipment of bulbs from Shenzhen Jinyi Display. The bulbs are all tested, qualified and look great. There are no issues with which we need to contend.

We are now finishing 400 additional bulbs for testing and qualification. So long as this next batch meets expectations, we will commence mass production. To guarantee work is done expeditiously, we are currently working out the details of the next purchase order to Shenzhen Jinyi. Every effort is being made to guarantee components are available and ensure no time is lost.

I wish to repeat, there are no issues with the bulbs. They are fully functional, have perfect color and are fully dimmable. There were also no issues with the shipping. Provided the next batch tests the same—and we have every reason to expect they will—we will be ready to move forward.

Our team of engineers and the senior management at Shenzhen Jinyi deserve great credit for propelling us this much closer to the finish line. We expect to cross that line soon (in the next week or so) and commence manufacturing. Again, we wish to thank our shareholders, channel partners and potential channel partners for your confidence and patience.

William B Smith
Chairman and CEO
Vu1 Corporation

Vu1 Business Update Call Recording Posted

I invite our consumers, channel partners and investors to listen to a recording of our Business Update Call conducted Tuesday, July 29 at 4:30 pm EST. This recording will be available for playback through Friday, August 1, 2014, 12:00 pm EST.

We do apologize for some technical difficulties with the call. You can download the recording below.

Vu1 Business Call 7-29-14

Thank you,

William B Smith

Chairman and CEO

Vu1 Corporation

Vu1 Business Update Call Invitation – Tuesday, July 29

Once again, I invite our consumers, channel partners and investors to join me on a conference call, followed by a brief Q&A session. Originally scheduled for Monday the 28th, please note the day and time of the call has been updated to Tuesday, July 29 at 4:30 pm EST. Below is the call-in information.

Dial-in Number for Participants: 1-712-432-3071
Conference code: 912122

I look forward to our conversation.

William B Smith

Chairman and CEO

Vu1 Corporation

Investor Call

I invite all investors to participate in a conference call, followed by a brief Q&A session, on Monday, July 28 at 4:30 Eastern. Stay tuned to this blog for dial-in numbers and the conference ID number.

Please mark your calendars.

William B Smith
Chairman and CEO
Vu1 Corporation

New Patent Awarded; Production Resumes

I have a number of important updates to share this month. First, we have commenced manufacturing after fixing and testing the proper phosphor mix.  While delays such as these are irritating (on many levels), they are a reality to be managed and dealt with. The important take away is that the reasons behind the problems are being addressed with actions taken to ensure a problem does not keep repeating itself.

On a more positive note, we received notice that Vu1’s 10th patent has been awarded, leaving one pending.  The patent title is System And Apparatus For Cathodoluminescent Lighting, patent application number 13/657,567. This is an important patent.  Vu1 has spent an enormous amount of money building and protecting our intellectual property, which will serve us well in the future with potential licensing agreements.

Finally, thanks to our engineers’ forward thinking innovation, we have made spectacular strides with our electronics and hope to be able to drop our watts used from 19 to 12 in the next generation of bulbs.  This is an exciting development and we will provide updates as we move forward with this and our other products including the R40 and the A19.

I understand everyone’s frustration with the process and trust me when I say my frustration level matches if not exceeds yours. I understand that repeatedly missing deadlines has damaged our credibility. In my opinion, the best and only way to redeem our position is to focus all our efforts on the task at hand, which is to ship bulbs. I am committed to moving forward on this as quickly as possibly, without sacrificing the quality of our product.

William Smith
Chairman and CEO
Vu1 Corporation

SeeThruEquity Third Annual Microcap Investor Conference

On May 28, I am pleased to be presenting at See Thru Equity’s 3rd Annual Microcap Investor Conference. My presentation will take place between 3:00 and 3:30.

I will be sharing with this group the vision and outlook of our company, discuss potential advancements in IP and provide production status of the Vu1 R30 65 Watt Replacement Interior Flood.

The conference takes place at Convene Grand Central, at 101 Park Ave. and 41st Street in New York City.

William B Smith
Chairman and CEO
Vu1 Corporation

Production Update

I apologize for the delay in getting more information to you. About 14 days ago I was made aware there would be yet another short delay, and I wanted to speak with all the engineers and thoroughly understand the issue in order to provide a realistic time frame for getting the Vu1 R30 shipped.

Like everyone else, I’m frustrated with this process. I’m embarrassed by my faulty projections and have come to realize how difficult it is to speculate on anything when it comes to manufacturing in China

Over a year ago, when I spoke with our many investors, everyone wanted Vu1 to remain transparent, sharing both the good news and the bad. We have attempted to do this. I prefer to communicate as often as possible, even when the news is difficult to share or embarrassing to Vu1. The alternative, simply going “dark” until we ship, fans the rumor fire and puts our company in a position where we would never be able to respond. Obviously, this is not where we want to be.

So, where are we today with production? Two weeks ago, Cameron isolated an issue with the red phosphor in our phosphor mixture during the final burn in before shipment. The “color” of the light was too red. After examining the issue, we found that our manufacturing partner never used the proper red phosphor when our relationship commenced. Only on this last PO, when brand new red phosphor was sourced properly, did we realize that our partners previously had been using materials that were not aligned with our orders. This was clearly a violation of our trust and, more important, another violation of our agreement. I mentioned late last year that these issues are being addressed aggressively while we are working with our current partners and I believe our solution will be positive for Vu1 and our shareholders.

Once the issue was identified, Cameron was able to halt production relatively quickly. He immediately came back to the USA while the Chinese were on yet another vacation and we have fixed the issue. Cameron and the engineers are headed back to China today to implement the changes and commence production.

Though I’m completely disgusted with the situation, I promised to get bulbs out the door that deliver on our promise of better light and I will make this happen. I believe that we will be able to deliver bulbs in mid-to-late June. Again, I am working with the information I have today and we believe this is a conservative time estimate. Trust me when I say, I would prefer not to be writing another apology. I look forward to being able to report some positive news.

William B Smith
Chairman and CEO
Vu1 Corporation