Howdy Folks: I have read the documents in the 8

Howdy Folks:

I have read the documents in the 8-K. I have a few observations I can offer. How the moving parts come together to a form a unified construct from my perspective. There are several things that leap out at me in particular.

I suppose the first observation deals with the comparative relationship between the two companies going forward given that Steve is assigning a 51% voting interest to Pasaca. When I read this it is clear that the construct uniting the two companies is not about control. It is about uniting two highly successful creative juggernauts into a single engine of creativity and enterprise.

In support of that, everything about the construct is designed to preserve and retain the comparative independence and autonomy of the two corporate entities. Stepping back and thinking about it you can see why the two principals — Steve at QMC and Dr. Charles Huang at Pasaca — would want that. The idea would be to preserve intact what each is good at while creating the framework for synergies to occur. The breadth of diagnostic applications and global reach of Innova is incomparable; QMC is the absolute leader in the application of quantum dot technology to diverse applications. Neither would want to compromise or dilute what has made each successful while uniting them together in the common pursuit of joint applications.

Following from that, the third observation deals with the comparative private/public status of the two entities going forward, given the majority interest of the private entity. Is there any reason to think that the private status of Pasaca would come to dominate over the two? The answer is unequivocally “no”. Everything in the documents is explicitly contrary to such a notion. What follows is my understanding of the structure of the agreement and how it addresses these three points.

In his cover statement, Steve states: “To join Pasaca Capital, as a portfolio company, represents a tremendous opportunity to enhance our QMC HealthID™ offering, to accelerate our COVID-19 work with Innova Medical Group Inc. and to expand the use of quantum dot technology to advance diagnostics in a broad range of disease states. Together, we’re working to bring greater precision, personalization and access to healthcare.”

QMC will become a member of the Pasaca portfolio be selling them a majority interest in QMC. Beyond that, QMC will retain its status as an independent and separate corporate entity. QMC shareholders will retain their shares (diluted as a proportion of ownership by 51%). Item two of the Distribution Agreement (Exhibit 10-4) is explicit on this point:

"Status as Independent Contractor. Pasaca and any Designees are independent contractors pursuant to this Agreement. Nothing in this Agreement creates any agency, joint venture, partnership, or other form of joint enterprise, employment, or fiduciary relationship between the Parties. Neither Party has any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement, or undertaking with any third party. Pasaca and any Designees shall be solely responsible for any and all costs or expenses that it may incur in the performance of its obligations hereunder."

The Registration Rights Agreement, Exhibit 10-3, operationalizes their mutual independence by defining the terms by which Pasaca ownership in QMC is handled through the assignment of QMC shares. There was something curious about Section Three, Subsection k. It seems to obligate QMC to listing its shares on the NY Stock Exchange or NASDAQ Stock Market right out of the gate. Is there an implicit expectation of up-listing as a condition of the agreement? That would seem to imply the immediate explosion of revenue to QMC following upon this agreement.

"k) The Company shall use its best efforts to (i) cause the Initial Date to occur on or before March 31, 2021, (ii) cause the Common Stock to be listed on the New York Stock Exchange or on the NASDAQ Stock Market and to remain eligible for trading thereon, (iii) cause all the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are listed,..."

In terms of the structure of overall agreement, the areas of mutual obligation and overlap occur at the intersection of Pasaca’s Subsidiary Innova Medical Group and QMC’s Subsidiary QMC Health ID. As outlined in the Distribution Agreement, Item 11, each side retains the rights to its own intellectual property. In practical terms, Pasaca's majority ownership in QMC is expressed by assignment of a subset of Pasaca members to the QMC Board of Directors.

Otherwise, while it is not stated as such, all of the parallel sub-entities and activities of QMC as described in Section A of the Securities Purchase and Finance Agreement (Exhibit 10-1) will remain the prerogative of QMC to manage and operate.* As majority owner, and via its membership on the QMC Board of Directors, Pasaca will exercise managerial oversight and guidance, if not joint direction.

With this new capitalization and access to all that Pasaca offers via its Innova Capital Group this seems like a decided win for QMC and its shareholders. I am especially impressed by the dynamic picture it paints. Initial collaboration will occur around Innova, branching out to the entire spectrum of applications of quantum dots to medical diagnostics. Everything else that Steve has put in play will continue on, with capitalization and involvement by Pasaco as appropriate. It seems like the Pasaca team, particularly Dr. Charles Huang as its head, is a good fit for Steve in terms of their mutual entrepreneurialism, business skills, facility for cutting edge technology, and drive.

I guess the way Steve looks at this is that the revenue opportunity as represented by our joint actives with Innova will be of such magnitude so as to off-set the dilution of income by 51%, say if we were to contract with Innova for the marketing of our products as a client. It was a strategic calculation, made with the understanding of what is best for shareholders, all things considered. It is easy to see how this calculus works. From Steve’s standpoint, half of something is better than all of nothing (granting that some income to QMC was already beginning to accrue). Given the horsepower that Pasaca brings to the party, it is not a reach to see how this will work to the benefit of QMC shareholders.

As a concluding thought, when I read the documents in the 8-K, I am struck by the singular vision of the construct. From start to finish as you walk through Exhibits 1-4 the message is sharp, focused, and internally consistent throughout. When Steve and Dr. Huang sat down to work this out there was no space between them in their understanding of how this would work. It is an impressive statement of purpose as a joint construct. It is a solid foundation for moving forward.

That is my take on the documents that comprise the agreement. I certainly welcome any revisions if some of this doesn’t seem right.

*I was really impressed by the succinct description of QMC sub-entities and activities contained at the front of the Securities Purchase and Finance Agreement (Exhibit 10-1). I will append that here because it is so good.

A. The Company, through its wholly owned subsidiaries, Solterra Renewable Technologies, Inc. and QMC HealthID Incorporated, specializes in the design, development, production and supply of quantum dots, including tetrapod quantum dots, a high-performance variant of quantum dots, and highly uniform nanoparticles, using its patented automated continuous flow production process, and integrating the quantum dots in various applications and solutions. The Company, through its acquisition of the intangible assets of Capstan Platform, Inc., is involved in distributed ledger technology, DLT or blockchain technology, solutions for business enterprises. The Company, through its patent-pending QMC™ DLT platform, combined with its quantum dot production process, has a technology to track goods end-to-end in supply chains, from manufacture to retail point of sale, addressing counterfeit, product liability and other product-track and -trace issues. Through its QMC™ HealthID product, the Company provides end-to-end visibility to support testing and immunization for infectious diseases. The foregoing business segments are referred to herein collectively as the “Business.”