Sydney Roadshow, page-109

Here is part 2, some thoughts and things I found interesting in the Sydney roadshow yesterday. I've quoted myself so people could refernce it if they wanted to.

History of FBR and CAT.
One of the interesting things I found out was the tidbits of history of FBR and its relationship with the CAT MOU. FBR was trying to seek private funding around 2015, but no one seems to be interested in it. An opportunity arose in terms of a reverse/backdoor listing, and they took it. Mike said it aint perfect, giving examples of shock when this is mentioned when he meets people overseas. We could be considered lucky, as its very rare a company of this nature ever got listed publicly especially here. Turns out, they did try to get mortar and have to make the decision around that time to switch to adhesive. When that happened, Betchel came calling, and hence CAT was introduced. This is where CAT was astonished that the DST IP wasn't valued higher. Also, the advantageouse of adhesive is that its a quarter of the price of mortars and 4 times the strength of it. Its possible to stack up a full wall without waiting for it to dry. Even during rainy conditions, water actually acts as a catalyst for it work. I can understand future company plans being sensitive, but surely, a "history" of FBR would have been interesting for some like me. Aparently with the CAT/Betchel relationship, the FBR team has been visiting US military, NASA etc.

Relationship with CAT.
Mike stressed they have been dancing with CAT for 18months. He stressed that it is CAT ventures, and that the deal with CAT would mean FBR potentially have to wait up to 7 more years before royalty will be seen. The amount of royalty seen would also be dismal. I think the ballpark figure thrown around would be something like 100K per machine. However, compared to WAAS, per machine could be as high as 9mil over its lifetime of 12 years. I really hope these were all up front during the "negotiation" phase. But alas, its history now.

Wall building/prefab brick walls.
HX could be used to build walls and not just structures. When tilt-up is mentioned, Mike remarks that the cost for tilt-ups is increasing to the point that they are pricing themselves out. Its possibly that FBR/HX could be another source of revenue. The chicken farm? wall, you see in the outdoor build has been a constant conversation starting point when visitors from the industry visits. Its also possible to use the HX/DST to prefeb the walls before transportations.

pre-fab/flat pack/ houses/3d-printed houses.
Pre-fab houses being build in 3 days was asked, Mike said the largest flat pack house manufacturer is IKEA. He replied that if you try to get a mortgage from the banks for a pre-fab house, the banks will most likely add a 50% premium to your loan. Pre-fab houses has been around since the 70s, if it was as popular as it should be, it should have been everywhere by now. Which leads to 3D-printed houses. Mike mentioned several videos in Dubai of 3D-printed houses. Basically, these houses takes far too long, in terms of years, and are far too expensive to produce, in terms of millions. They are also build indoors.

Australian government, RnD tax credit.
It seems like its not just WA government but also the federal government that has heard about FBR. FBR has been actively lobbying the government on the RnD tax credit. Basically a reduction the the available refund they will be able to get. MIke's own comments says it all, "They love talking to us but won't cut us a cheaque to help us."

Training of HX operator.
Mike is very enthusiased about this. He believes, he could ideally get a 40-50 yo retired bricklayer and retrain them to work all the way till 70yo. This also goes to what has been said about the average age of bricklayers and how its not just the builders that wants FBR/HX to be a success but also the brick/blocks manufacturer.

Comment on current SP.
Mike is equally as frustrated about the SP as everyone here. This goes along with the US visits where people said FBR should at least be valued at 500M on DST alone. He gave the explaination that FBR is in a 1 horse race. Where there is no second company in the world that is doing anything that is similar to this. Hence, the lack of apathy from the general investment market.

IP security/drones attack.
Their main computer where the IP stored is in a vault that has nothing connected to it. He also mentioned just last night they have 3 drones flying over them to try and capture any IP/pictures they can see. Its a major problem in terms of their computer/IT security as well. They have hired "hacking" groups to do frequent penetration test. And they always comes up with something. Might sound paranoid to some, but with the IP being 90% of the value of the company. I think this is very prudent.

HX current "speed" and potential.
Mike commented that the current lay speed is 100SBE, its possible to increase this to 200SBE and they are working on it. He said if you can start getting the machine to do 400SBE that is where things will get very interesting. I"m not a tradie, but I'm assuming this means very very fast. So, if 100SBE is 1 house in 2 days. 200 is 1 house in 1 days, 400 means 2 houses in 1 day?

After thoughts.
Mike comes across as someone being genuine. I really hope all shareholders having doubt has attended the roadshow at least to clear up any doubts about this. I would be taking up the SPP on money I can afford. Would love more, given the potential. But, its important to note that this is still very high risk. We've crossed over at least in my opinion the technicals of establishing the HX. The next phase, is commercialisation, which is where things would start getting interesting for us.