Ann: Term Sheet Executed for First Integrated Product, page-12

Further to the above posted points about the better payment terms & conditions, some other, perhaps less-obvious takeaway points:

1) We've known of two integrated products from the previous announcement(s) for some time now, this announcement says "while this is the first such integrated product to come to the market, the Company is currently developing additional products using the same integrated format".

After taking about the first integrated product, it refers to additional products (with an s on the end of it) which means we have at least a further two in development (and thus at least 3 integrated products under development in total, perhaps even more).

2) The first product is expected to be launched in Q2, 2019 and appears to be for sale online only, not physically in stores initially ("will initially target SK-II's growing online business").

3) The company interestingly chose to specify that "royalties will now be recorded upon shipment of the product by the manufacturer", no doubt to increase transparency of the amount of units sold / shipped from manufacturing warehouse - I had always thought this was the case anyway, but apparently not and if this wasn't the case & the payment terms were previously in arrears, then no wonder it took forever and a day for anything to hit OBJ coffers and no wonder there were "discrepancies found" (noted in a previous announcement)

4) I also find this throwaway line a little fascinating:

payment will be in advance rather than arrears, "with an adjustment mechanism for over or under prepayment".

Logically thinking & speaking, P&G would not commit to a prepayment of any kind (for example 100k U.S$ per month or per quarter) if it wasn't reasonably confident of expecting consistent sales to match or exceed whatever the agreed prepayment amount is. It would be a waste of time for them unless they were quietly confident of decent uptake/sales of this new product.

This "adjustment" mechanism is also a strong indicator for expected & ongoing repeat sales & re-orders as you wouldn't bother going through all the effort to negotiate & agree to this if this was going to be another seasonal product or if you only expected 500k to 1 mil units to sell before phasing the product out.

I also expect this new payment terms & conditions (if it works smoothly) to form the template for all future P&G integrated products incorporating OBJ technology. I don't see any reference here to the previous products benefiting from the new payment agreement so it is probably an exclusive agreement for all future integrated products unless another announcement confirms otherwise.

5) Reading between the lines, it would appear that this newly agreed payment terms has come about from a frank & gentlemanly heart to heart discussion between P&G and OBJ representatives where OBJ explained that the previous payment arrangements were not working for us.

With the success of the eye wand, sk-ii booster and magnemasks to date, and considering that P&G must be happy with the creative collaboration between OBJ/P&G and it's future pipeline. P&G does appear to also trust the ability of the selected manufacturers to deliver on a timely manner.

The long story short is that P&G already had exclusivity in skin care and they are in the position of strength in the relationship. The fact that they were willing to listen to OBJ representatives and make amendments/agree to new payment terms to create more of a win / win relationship for both OBJ & P&G speaks volumes of their respect for the board of this little biotech company residing in Perth, Australia and just quietly, is a little vote of confidence for the pipeline of future products on the conveyor belt between OBJ & P&G.