(Reuters) - British nanotechnology company Nanoco Group Plc (L:NANON) said on Thursday that its full-year revenue would be less than expected due to lower royalty payments from Dow Chemical Co (N:DOW) after the two amended a licence agreement.
Nanoco's shares fell as much as 8 percent to 42.28 pence in early trading on the London Stock Exchange.
The company partnered with Dow Chemical in 2014, giving the U.S. company exclusive right to use its cadmium-free quantum dot technology to mass produce quantum dots.
Quantum dots are semiconductor nanocrystals, 10,000 times finer than a human hair, that can convert electrical energy into light and be manipulated to produce precise colours in display.
Nanoco said on Thursday that the agreement was amended to make it a non-exclusive one, which would result in Dow paying the British company lower royalty rates and no earn-out income.
"Nanoco is expected to use other partners to speed up its penetration of other markets outside of Korea," analysts at Liberum wrote in a note.
The brokerage added that amended agreement also potentially made Nanoco a more appealing acquisition target than it was when its technology was exclusive to Dow.
Prior to the announcement, analysts expected Nanoco's revenue to rise to 4.99 million pounds ($7.2 million) for the year ending July from 2.03 million a year earlier.
Last year the company's rival Nanosys signed a multi-year agreement with South Korean television maker Samsung (LON:0593xq) Electronics Co (KS:005930).