Yeah,Here's the article ...AJX financials released early: the...

Yeah,

Here's the article ...

	AJX financials released early: the progress is in numbers & more announcements to come says CEO

1		In our experience it’s usually a good sign when a company releases financials earlier than the August 31st ASX deadline. It usually means the results and progress are positive and they don't want it to get drowned out when every other company is releasing results on the day they are due. TodayAlexium International (ASX:AJX)has released a set of numbers that in our opinion show that its commercialisation strategy is starting to deliver, and we believe it should continue to ramp up over the next few quarters. We hold a long term position in AJX,a US based company that has developed, and is selling, advanced performance chemicals for cooling and fire resistance. Cooling Chemicals→ applications for bedding, helmets, textiles, upholstery, sportswear, body armour, work boots etc... you get the idea, anything a human is constantly in contact with that they want to stay cool. Fire Resistance Chemicals→ applications for military uniforms, fire-fighter uniforms, bedding, upholstery etc... any material we DON’T want to catch fire. ASX:AJX We are expecting an eventful 12 months for AJX after holding the stock for well over a year now. We invested for the third time in July after seeing a “change in substantial holder notice” announcing that private equity firm Colinton Capital was buying more AJX shares on market — Colinton now own ~12% of AJX. We are impressed with AJX’s chemical science/tech, and since AJX has been quietly working with Colinton for the last 12 months to help commercialise its intellectual property, we expected that progress to be reflected in AJX’s latest financials. TodayAJX announced its annual resultsand we are very happy to see the first signs of commercial progress coming through: Revenues are up 19.7% Costs are down by 76% US.26M revenue (previously US.01M) US.445M loss (previously US.125M) US.9M in the bank plus US.3M in receivables ASX:AJX In the mostrecent AJX quarterly commentarya few weeks ago CEO Bob Brookins said: “For the Alexium team,we are at the most exciting time that I have seen since I joined the Company. While there are a number of factors contributing to this sense of excitement, I believe the greatest driver here is the commercial success we are having across our product platforms.” .... “Fuller updates on these efforts will be provided in upcoming announcements, but as you can see, Alexium has reached a critical stage where our key strategic initiatives are reaching commercial fruition”. To us, this sounds like news flow is on the way from AJX. We will be watching closely, providing our commentary and assessing progress against our AJX investment milestones as the company emerges from its quiet phase with a pipeline of news announcements. In our opinion, compared to last year, today’s financials are finally starting to reflect AJX’s move into full commercialisation (even in light of COVID’s impact on the business). We also note that because AJX’s business isselling the intellectual propertybehind its cooling and flame retardant chemicals, if it can keep driving revenue higher and capture new markets, its actual cost base won’t necessarily rise. This is what we have been waiting for as AJX investors and today's results are the first signs that it is starting to happen, with the CEO promising more news soon. We like AJX’s Intellectual property model: Discover/develop it once. Sell it an unlimited number of times. AJX sells intellectual property to use its chemicals tech: AJX’s costs can remain stable while revenue rises:

	To put it simply, the next key milestone we want to see from AJX is more revenue. This will come from the new and existing markets that it is targeting with its advanced cooling and flame retardant chemicals. This slide from theAnnual Report Presentationis particularly useful to show the potential revenue drivers we expect to be reflected in AJX’s next set of financials if they can deliver them:

Start of the AJX ramp up phase in revenue We also noted the key management commentary around the future outlook being positive, and it sounds like AJX’s newly assembled commercial team has had time to get settled and start driving sales in the various product lines and new markets. We are encouraged by AJX’s efforts over the last 18 months that are now starting to impact its top line, so what are we looking out for next? Drivers for AJX revenue growth to keep an eye out for AJX can be a complex story to understand so we created a simple milestone checklist for ourselves and other investors to follow its progress. We are generally watching for AJX to create → prove → commercialise new chemistries for cooling and flame resistance in different consumer markets like bedding, clothing, uniforms, upholstery, sporting goods and many other consumer market segments. When we see a new AJX announcement about a new or existing technology, we want to see (A) how it will open up opportunities in a new market or (B) improve AJX’s ability to commercialise an existing market. Here is our basic create → prove → commercialise process steps for each new market AJX wants to enter: Identify a new market(i.e. bedding, uniforms, body armour, etc...) Design/combine AJX chemistriesfor end use in this new market Successful testing:confirm the new chemistry combination and manufacturing process works Sign Manufacturer Partnership #1:a product manufacturer agrees to use AJX chemistry in their end products Sign Manufacturer Partnership #2: second manufacturer proves there is a strong market First product revenue:initial cash generated Increased revenue: more cash generated Multiple end uses in market:develop new uses in the newly established market Here are our milestones to track AJX’s progress in commercialising the key markets it is going after. In the last quarterly report, AJX CEO Bob Brookins promised some upcoming announcements, so we will provide commentary and tick off milestones in each of the commercialisation steps as AJX announces progress to the market: Cooling markets: AJX progress in commercialising cooling chemicals IP for bedding and body armour:

	Flame retardant markets: AJX progress in commercialising flame retardant chemical IP to for military uniforms and bedding:

	Here are the company milestones we want to see from our investment in AJX:

	Here is the progress of our investment strategy for AJX:

New to AJX? Here is a review of our investment journey with AJX with links to our recent commentary: AJX wasfirst added to the Next Investors portfolioat 6.5¢ in March 2020. We have since added to our position twice more — most recently in July, when we bought AJX shares at around ~5.5¢ after seeing that private equity firm Colinton Capital was buying more shares on market. This coincided with the release of AJX’s quarterly report that showed increased revenue and reduced costs compared a year earlier, along with commentary from the CEO promising ‘announcements’ in the near term. AJX was quick to deliver, last weekannouncing “strong sales” of its new environmentally friendly mattress cooling product, BioCool™.