AJX (ASX) Ann: AGM Presentation

Originally posted by poorinvestor: ↑

Dear Fellow Hot (and some Cool) AJX Cobbers,

Below is a summary of what I personally took from the AGM. I don't represent it as a transcript or summary of the meeting nor am I looking to represent any content here as a direct statement by any participant.

(1) Trading Halt and Rights Issue
The trading halt is intended to allow all shareholders to have access to the full documentation describing the rights issue before trading recommences. It is not because there is another major announcement pending concerning this matter.

Many institutions and shareholders have said that the debt is a millstone on the company. Whenever good news is announced the share price rises but then falls back because of the debt. The specific details and method were decided only after substantial consideration of all options and this is considered the best way of proceeding in the interest of shareholders including that the situation can be finalised quickly this way. Shareholders will have the opportunity to apply for a greater number than their entitlement. All major shareholders have been contacted and have indicated an intention to participate.

If fully subscribed there would be an additional ca US$2.5m for working capital generated. If the issue does not fully cover the debt it is anticipated that any extra amount could be raised under more favourable conditions. There should in any case be a substantial reduction in monthly interest payments. The current provider has indicated they would refinance the deficit.

(2) Pine Belt and Uniforms
Alexium staff are currently working with Pine Belt and the military in the production trials for the Marine uniforms. The working relationship between the two companies is very efficient and productive. Pine belt are sufficiently confident of the success of the trials that they have commenced expansion of their production capacity to accommodate application of the Alexium product. Pine belt are now in a position where they will be doing all FR and insecticide applications for uniforms.

Following success with the Marines the Army would be the next service to become involved. It is not known to what extent the Army will take into consideration the Marine results in making their decision or require complete retrial of the product for their uniforms. Whilst the Marine contract would only require alteration of one sentence in the current uniform specifications to accommodate the Alexium FR the Army would be looking to a complete new specification with their uniforms.

(3) Markets and Pipelines
In the past management have been intoxicated by the potential of their own technology. The view has been 'build it and they will come'. The company has had a reputation for it's technological capabilities but also for it's inability to successfully commercialise them. Published potential market figures have assumed a very optimistic rate of adoption of the Alexium technologies. The more recent figures quoted are considered 'real figures' and are based upon detailed interaction with the market and sales figures fed back from potential and current customers.

The 'pipeline' figure of US$45m pa relates to projects on which Alexium is working with customers on particular products and where those projects have been successfully completed or where it is confidently anticipated that they will be successfully completed. This represents 35-40% penetration of the bedding industry, further $ growth of which is illustrated in slide 5 of the presentation. This slide also illustrates the substantial FR based development in the bedding industry relating to the sock for foam beds.

(4) Customer Interaction Advantage
The company claims one of it's great advantages is it's ability to work with individual customers and design a product that meets that customer's specific needs. The analytical tools developed by the company to quantify it's cooling technologies has allowed development of mathematical models that detail the thermal parameters of a customer's particular product. This not only allows Alexium to meet the customer's expressed requirements but also allows the customer to validate claims made in the market for it's product. This ability of Alexium is seen as a major attraction by customers and customer approaches are increasing substantially. Alexium can design for a particular customer product to either a technological requirement or to a cost requirement. It can model and quantify parameters covering the whole of the product system, not just that relating to the PCM cooling component.

Good luck and a wise decision to all Cobbers.

poorinvestor

Expand

All major shareholders were contacted and at least one began to offload it seems.

With regards to the $45m pipeline, if the projects are completed, whats the next step?

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Ann: AGM Presentation, page-11

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