Ann: Increased Sales Lead to Record Monthly Product Shipments, page-137

Hi Parsifal

I very much appreciate all of your well considered analyses and comments. But I do disagree that this announcement is not directed at the NASDAQ listing. If it is true that (US) “Institutions aren't going to be turned on by this sort of notice. They want to see extended patterns of performance. They will be more interested in sustained bottom line performance as well - not just a one time announcement about CFN”, then the Company is wasting its time seeking to successfully list now, because the criteria of extended and sustained bottom line performance will require a further few years of financial history.

The Company’s intention to successfully achieve NASDAQ listing at this time does cause complications that do not appear to be completely appreciated by investors, specifically relating to the listing price. Obviously for the listing to be successful it will be necessary for the price to be perceived as attractive to US investors.

For a normal IPO the merchant or investment bank managing the listing is able to decree what the issue price will be. This would be one sufficiently high to be considered fair to the company’s intrinsic value while sufficiently low to draw in the desired new investors. This process would be facilitated by formal announcements or analysts’ reports indicating high growth in the business and hence the potential for higher future prices.

The intended Alexium IPO does not fit this normal description. In this case the prevailing price is open to determination by an active external market (the ASX). To manage the listing price under these circumstances would require that the external market price be managed. For at least a year posters have consistently referred to apparent capping of the AJX share price, with accumulation suggested as the cause. Yet no significant holding notice has appeared.

I believe that the comprehensive Petra Capital report forms part of the listing strategy and is correct in concluding that the NASDAQ listing will provide “an important share price catalyst” and likely to show “100% upside”. The Report’s Disclosure I think is relevant, stating that “This material is intended for use by major U.S. institutional investors (as such term is defined in the U.S. Securities Exchange Act of 1934) and “$100 million investors” only and not the general investing public or retail customers.”

The Company has stated that its current intention is to limit its ASX releases to information thought specifically to be of value to institutional investors, who therefore should be less familiar with the content of any informal communications. I believe that consistent with this strategy the announcement was drafted for an institutional audience, with the US being the obvious one.

T7