While we have enjoyed providing weekly updates to our potential customers and followers, we have been quite transparent in sharing the great progress we have made over the last few months.  This also means we must be transparent when we run into issues, no matter how big or small they are.

We continued to experience poor yields from one of the two subcontractors that Huayi had engaged.  We believe that additional equipment and additional training will be needed to raise our yields to an acceptable level. While disappointing, this in no way brings the other two segments of the bulb manufacturing process to a halt.  Not every swing is a homerun, and this is all part of the process to ensure we deliver a premium product to the marketplace.  Again, all other segments of the manufacturing process can continue at this time.

Upon achieving satisfactory yields, we will provide an update for our automated production schedule.  We look forward to communicating next week.

William B. Smith
Chairman and CEO
Vu1 Corporation

Postscript: I also would like to thank everyone for his or her feedback about our updates.  I would like to make a few things clear. This blog update is not a PR effort; it is simply a communication tool so people can see progress. We are not using professional photographers, professional cameras or professional video equipment. We are using camera phones. We do not believe spending funds on these extra items is necessary at this point.

In ESL technology, light is created in a very different way than with incandescent lighting. With an incandescent bulb, a central filament gives off light. With ESL, phosphor is painted on the interior of the bulb. An electron fountain sprays electrons onto the phosphor and the stimulated phosphor creates light. This light emits a full spectrum of colors, which illuminate evenly on the surface below.

Because the whole interior surface of the ESL bulb is creating light, the production process of this portion of the bulb is critical. Everything is moving along smoothly in Huayi, so we took an opportunity to take some amateur video and share some of our production efforts.

The video begins with a few seconds of the lacquer rinsing process, which removes excess lacquer residue after it has been softened using an aromatic solvent. The remainder of the video shows two of the lacquer spraying stations. The glass is being sprayed with short bursts of lacquer, which spreads the lacquer out over the surface by centrifugal force. We are working on perfecting this process since the lacquer is a critical component that gives the ESL lamp its uniform illumination. The lacquer is one of the final steps needed prior to securing the bulbs to the sleeves, posts and bases.

Enjoy the video. We will be reporting in again next Thursday.

William B. Smith
Chairman and CEO
Vu1 Corporation

I am pleased to finally write; the team in China has begun the initial pilot run of bulbs – connecting circuits, putting on sleeves, posts and bases. We are testing all bulbs for brightness, checking the input power; color and initial turn on to assure there are no issues.

After a successful pilot run, we will make any necessary adjustments and begin production. That’s right, we are very close. We will also begin planning for an April/May full production and commence inputting our long-term production schedule.

Production is just one part of our mission: Delivering a high-value product means we must have impeccable quality, every time. So, Cameron is focusing on implementing our production quality assurance program and has begun collecting data. The QA group finalized test instructions for main board 15KV trimming, power input trimming, over scan trimming and reference lamp inspection. We are also training the permanent team in China on how to test the boards and safeguard VU1’s quality. Just to repeat, this team represents Vu1, not our manufacturing partners or their sub contractors. Stanley and the team have been split up for most of the trip thus far and tackling different issues at different facilities; we expect everyone to join forces again at the end of this week and begin working together in Huayi again next week.

We are excited about our progress so far, everyone is working diligently to get light bulbs on the shelf.

William B. Smith
Chairman and CEO
Vu1 Corporation

Not a day goes by where I am not reminded of the value of our product.
Recently the Alliance for Natural Health reported on a new study about CFL
bulbs and the dangers from the mercury contained within them – including
risk of cancer.  This is in addition to the EPA recommending the removal of
both people and pets from your home for a minimum of two hours if you break
a CFL bulb.  Don’t believe me? You can read more here:
http://www2.epa.gov/cfl/cleaning-broken-cfl

It is almost weekly that a new report sheds light upon the hidden dangers of
compact fluorescent bulbs and the toxic amount of mercury contained therein.
While CFL’s continue to gain attention for all the wrong reasons, ESL
lighting technology is in the spotlight for its ability to create the
same warm natural light quality as an incandescent bulb (and not disrupting
our natural sleep patterns like LED’s and their blue light) while being 70%
more energy efficient and lasting up to five times longer – all while being
100% mercury free.

In this day and age we expect that all products are safe and that alone is
an important reason to expect high demand for Vu1 bulbs- it not only saves
energy while delivering high quality light-it’s safe.

Finally, and most important, as I write, our engineers and project manager
are on their way to China to begin implementing all the changes that need to
be made at Huayi as well as with the sub-contractors.  We have been working hard
over the last month and look forward to hitting the ground running this weekend.

We will have more details about our progress next Thursday.

William B. Smith
Chairman and CEO
Vu1 Corporation

Our team at Vu1 is working hard to confirm several details for this week’s update and will have a full weekly status blog ready tomorrow.

The Vu1 engineers are meeting as I write this blog, as they are having their last face-to-face gathering before leaving for China next week. They are finalizing plans, making sure they have attended to every detail.

We have made extraordinary progress with our testing efforts.  Our new testing will increase efficiency and speed when implemented on components and final products.  Cameron McLeod has done exceptional work in this area and should be applauded.

The team will also split up while visiting China, allowing Project Manager Stanley Chao to visit Vu1’s home base of Huayi, as well as visit with our subcontractors. This will ensure our new quality control managers are implementing all changes necessary.

As we stated previously, the team is headed back to implement the resolutions for all issues found on our first trip, implement new testing standards and drill down on quality control.  We will stay in China until we are comfortable bulbs are being manufactured in a controlled and proper fashion.

On another note, we are pleased to announce our participation in LIGHTFAIR 2013. At the 2012 show, we made our debut. It was very exciting and proved to us what a great product we have and how unique it is to the lighting industry.

This year the show is in Philadelphia, PA, April 21 through 25.  Vu1 will be the only ESL bulb at the event. Those attending will be able to experience our proprietary patented ESL technology first hand as well as meet some of the Vu1 team. We will be stationed at booth 108 and would love to have you drop by.

LIGHTFAIR International is the largest annual architectural and commercial lighting trade show and conference in the world.  It blends continuing education courses with innovative products ranging from high-end design to cutting-edge technology.

We look forward to updating you next week on all that is new at Vu1.

William B. Smith
Chairman and CEO
Vu1 Corporation

Our engineering team, led by Project Manager Stanley Chao, have confirmed and booked another trip China during the first week of March. Stanley is very confident in the progress being made by our engineering team as all issues have been successfully addressed and we are excited to implement changes and hit the ground running.

I recognize there have been too many past issues hitting deadlines, simply put, it’s unacceptable, but I want to assure you that we are on track with our new QC and engineering team to identify and deliver the fixes needed to commence mass production.  It is understandable that the previous missed deadlines may have made consumers and investors apprehensive, but we are delivering the best and most up-to-date information possible as we receive it in an effort to regain your trust.  I also understand this will not be regained until we deliver lamps consistently.  The alternative is to go “dark” and this isn’t fair to our shareholder and potential consumer base as it delivers the wrong message.

We are happy to announce Vu1 has reengaged with KCSA Strategic Communications to oversee and manage our investor relations beginning March 1, 2013. We welcome them back to the Vu1 team.  We view Jeffrey and Phil as part of the Vu1 family and look forward to working closely to ensure our message is delivered to the investment community.

On the sales and marketing front, in March we will commence delivering product samples for distributors, retailers and media. Our national sales representative, James Poindexter, and our marketing agency, The Sales Factory, are revving up their teams for a full-court press, ensuring our message is delivered to every ED, Retailer and journalist that wants to hear our story.

It’s been a long road, and it’s an exciting time for Vu1 and our shareholders. I look forward to sharing continued updates as each week progresses and we close in on our full retail launch.

William B. Smith
Chairman and CEO
Vu1 Corporation

Since returning from China, we have been working diligently to correct each issue that was uncovered while our engineering team visited to thoroughly analyze every step of the process, including analysis of sub-contractors.

At this writing, our manufacturing team, led by Project Manager Stanley Chao, is wrapping up a meeting in the bay area to sort through next steps when they return to China in the first week of March. As you may be aware, the Chinese New Year is in full swing – this has given us an opportunity to order new supplies/components, as well as a new pump needed for the production process. The components and new manufacturing equipment will be in hand when manufacturing resumes after the Chinese New Year break.

Providing more detail: phosphor application is an example of one issue that is easily correctable — simple training for the workers in China on the proper application technique is an easy remedy.  In fact, most issues were of this nature – easy fixes that will be incorporated and double-checked when our engineers are back on the ground overseas. We will also have two full time Chinese nationals on the ground in China representing Vu1 for the foreseeable future to ensure daily oversight and quality control.

As I mentioned in my last communication, the processes that we found to be done well, were done exceptionally well; we are also fortunate that they are the most complicated part of the process, and where our partners fell short, we have identified and have in most cases already found the solutions to implement when we hit the ground in early March.

As always, thank you for your patience. We are also very excited to share some updates to our executive team at Vu1 in next Thursday’s blog.

William B. Smith
Chairman and CEO
Vu1 Corporation

Our technical and project management teams recently returned from China, where they spent more than a week of intensive study on our manufacturing process and quality control with our partners at Huayi, as well as some of the sub-contractors.

Their initial feedback has been quite positive — as with all manufacturing processes, there were things that are being done exceptionally well, and some parts of the process that still need tweaking for quality control. Most importantly, they feel confident that we will be able to release a production and distribution schedule to the public in the coming weeks.

I wanted to share with you some images of our team’s quality control work in China, so you can see for yourself the level of detail of our analysis.

Moving forward, we will release news to you each Thursday on our blog, to ensure that you are kept up to speed on the latest news in this rapidly-moving phase of long term financing, manufacturing and management updates.

William B. Smith
Chairman and CEO
Vu1 Corporation

I had the chance to spend much of today in Greensboro, North Carolina, working closely with The Sales Factory — our marketing partner for more than two years. With the launch of our R30 ESL bulb drawing nearer, we felt it was a good time to get together with The Sales Factory for a prelaunch marketing strategy session. We spent time reviewing the details of our nationwide marketing and public relations campaigns that will support our product launch.

In fact, we will ultimately operate two simultaneous awareness programs — one will be aimed at distributors, with the goal of building up our roster of sales partners to make it easy to find an ESL bulb, no matter what type of store or website you patronize for your lighting needs. The picture below will give you a peek at a high-impact mailer that The Sales Factory has conceived of to get bulb samples into the hands of prospective distributors, both quickly and in an eye-catching and impactful way.

The second campaign, of course, will be to encourage consumer adoption of the Vu1 ESL as an energy-efficient replacement for their current lightbulbs. Once we have bulbs in hand, I can assure you that our fervent followers and the wider public will begin to hear more about both the underlying technology that makes the Vu1 ESL the best incandescent replacement on the market; and of course, about where consumers can procure the bulbs for their own use.

The meeting left me feeling as excited as I’ve been in months about our ESL bulb, which is ever closer to reality. With our newly-minted technical team already making great strides in China since their arrival last weekend, there is palpable and positive momentum throughout our company. Thank you for your patience and confidence in Vu1.

William B. Smith
Chairman and CEO
Vu1 Corporation