Ann: Quarterly Cash Flow & Business Update, page-2

Some key points of update:
- With expected R&D rebate MX1 will have in excess of $11 mill so no need for additional funding.

- "The market interest in the product continues to surpass expectations and emphasises the critical importance of planning for initial production volumes."

- "Our exhaustive Reliability Growth Program, which started last December, has been successfully completed and the incorporation of improvements from this program into the product design is complete."

- "Reliability Demonstration Testing and component life testing continues and this forms the last stage of the product verification program required for the Declaration of Conformity and CE Marking submission."

- "We are in the final stages of resolving some production and quality issues in our supply chain associated with the transition to volume production processes. These issues have hampered our schedule in building up the capability to deliver in volume. Micro-X is aware of the maxim that a great product can be easily spoiled by a poor market launch and is committed to achieving an exceptional standard of production readiness. The company has this week initiated a high-intensity build of a batch of production units to validate successful resolution of all these supply chain processes."