Ann: Appendix 4C - quarterly, page-58

Military moves forward, it's too easy to underestimate the value. I note the understatement here of what is heading to be a significant event. Very conservative commentary.


Once Alexium and its partner finalize the
fabric construction and FR treatment, the project would move into a procurement phase, which includes: hazard
assessment, limited user evaluations (i.e. field trials) and specification writing. The Company expects that process
to commence within FY2017. This effort, once successful, is expected to cascade into adjacent programs in other
branches of the military and US allies in NATO.