Ann: Investor Site Visit Presentation, page-2

Shaping up fairly well here I reckon, good enough for me to take a trade/hold entry today.

Chairman has agreed to fund the company with $20.25m so funding is sorted, albeit at terms quite favourable to himself. He also has milestones in place that reward him in increments as the revenue grows with targets between $100 (short term) and $500m within 5 years, pretty lofty targets for a company currently doing around $30-40m revenue.

The substantial on market crossing having been soaked up by institutional investors and company insiders is a further show of confidence in the board and managements ability to deliver shareholder growth. As with any investor you can be sure management are first and foremost out for themselves so the large investments they have made in this company are obviously done for self interest. With the seller taken out there should also be a whole lot less being flicked out into any run.

503m SOI
$48.8m MC at 9.7c
Revenue $15m H1 19
Gross profit guidance 35%

Sales into China's high end hotel market have recently started via the distribution agreement with JJ Global which are expected to bolster revenue for the second half of the year as well as the new agreements with Woolworths, Aldi, Coles and IGA for domestic distribution. The MOU with Sinopec which is expected to soon be formalised opens the doors to distribution channels across their 35,000 service stations should also be in motion. In additions to these channels management have stated that they are growing the diagou channel. Careline has a network of 10,000 diagous currently of which 100 plan to tour the factory in the next few weeks.

IMO management are aligned to retail shareholders here and are executing their path to $500m revenue with clinical precision. With 30-35% gross profit the first milestone will be $30-35m p.a GP. Fixed costs appear to be around $19m p.a therefore at $100m revenue the net profit should be in the region of $11-16m. At $200m revenue GP would step up to $60-70m and NP up to ~$50m. As it becomes clear that the strategy laid out is achievable the market should reprice this aggressively.