US Military Contract, page-5

It has been nearly 2 years since the agreement was signed with PineBelt, and this agreement would have occurred after a period of work by both parties, so who knows how long the development has really been going on.

From the announcement ….

“This Agreement is a crucial step forward and theculmination of months of product development and rigorous testing by Alexium to ensure compliance with both demanding US military performance specifications as well as with the specific production requirements of our partner. The completion of that work and this subsequent Agreement now takesour chemistry from the laboratory towards final preparations for large scaledeployment by our partner at their facility. Pine Belt Processing has an unrivalled reputation as a provider of high performance, high volume uniform treatments to the US military. We look forward to working closely with them to bring this critical project to a timely and successful conclusion.”

It really worries me the length of time this is taking to go from the lab to production testing before even military trials begin, …are then completed, … are analysed by the US DoD, … and are approved or rejected.

I recall some issues with coverage – perhaps getting even coverage over the fabric, … possibly something about the pattern as well and then delays with Covid… but 2 years!

I also recall in one of the face to face meetings in Australia (must of been in 2019) that trials could start in the late US summer of that year (so perhaps Aug/Sep 2019), so clearly they have been issues

I really think we could be told more as it also impacts on their credibility to get FR on other products (via ICL for example) if it has taken 2 years with Pinebelt.

It is at that point where it is a “material” concern for the business and shareholders, and I expected a better update in their 4c and then in the half year which did not occur. I really think its at that stage where it needs to be made clear to shareholders what has caused the delays and how far we are away from having a uniform ready for testing.


I also think we could be told more on ICL - the MOU was signed again close to 2 years ago, but the development has been going on for years ...

From the ICL announcement
"This MOU is the result of a long period of co-operation with ICL. In August 2014, both companies collaborated in a South
Carolina/Israeli Collaborative Industry R&D Program initiated by the Governments of South Carolina and Israel.

In addition I was also left further disappointed with the decline in margins from around 40% to 32% - it suggests to me that Softex have played hard ball and got a better deal, and Alexium had little choice as Softex are its biggest customer (where’s Pegasus these days?).

The sooner Alexium can diversify their product range (FR sock, TMSS, FR) the better as we are too beholden to one customer.