Ann: Appendix 4C - quarterly, page-45

Ok, I have re read the 4C and accompanying doco a few times, initially I thought....oh no.....the headline numbers looked bad...BUT then I actually read everything, and re-read it, its not bad at all.

PCM.

1. Pegasus is still a customer so they must be profitable.
Alexium has had significant success in this area with customers expected to launch multiple new product lines into the bedding market over the next six months in addition to new products being launched by pillow customers such as Pegasus.
2. New Customers are being actively developed  
Significant joint development with large bedding and top-of-bed manufacturers; and • Jointly working on 10 new bedding projects across these manufacturers.
3.

FR

1.  FRACU (US Army)  Progressing along the process
Manufactured production goods with new fabric prototypes; and • Cut-and-sewn garments for testing.

2.  Other Uniforms  (Marines??) is well advanced, now they are looking at finalising?  commercials?  We know that AJX can ramp up to production level as they have done it many times before.  This one is exciting
Finalized laboratory prototype which passes all performance specifications; and • Third-party validation was confirmed, and production preparations initiated.

Target Future Milestones • Reproduce prototype on manufacturing scale with supply chain partner; and • Finalize terms for agreement with supply chain partner.
3.  Commercial  FR .  This one is interesting, think Mines, electricians etc, basically any workplace that requires any sort or FR, Potentially could move quicker than Military as civi's have no issue about suing for unsafe chemicals etc

Potential customers are currently conducting trials and evaluating the product.

Cash
They have enough cash in the bank so they aren't going broke in a hurry, one military contract and they could do another CR.

Outlook
As disappointed as I am about the sales, no one can say it wasn't advised earlier.   I am happy that the company is no longer chasing sales for the sake of sales, we can now be assured that a sale will make them money.   I am also happy with the statement about moving PCM to profitability.

My only concern is one from another recent experience, (SFI), that is as soon as they get a military/decent  contract, a low ball takeover offer is made at something like 2x current price (attractive to new entrants),  just like with SFI, but engineered down on purpose.....that sucks for LT.

But happy after reading the whole Ann multiple times.