Ann: Term Sheet Executed for First Integrated Product, page-2

P&G SIGNS LICENSING TERM SHEET FOR FIRST INTEGRATED PRODUCT

OBJ Limited (ASX: OBJ) has executed a Licensing Term Sheet with Procter & Gamble (P&G) for the first fully integrated package product using OBJ technology. The product delivers skincare product with precise placement and then drives the active ingredient more effectively into the deeper layers of the skin for enhanced performance.

The breakthrough product is the first to integrate OBJ’s magnetic microarray technology with a pre-filled, airless pump pack to create a conveniently sized product.

It is anticipated that this innovation will initially serve P&G’s SK-II skincare business.

Importantly, the integrated product ensures that OBJ will derive an increased royalty benefit from repeat purchases. This contrasts with previously licensed technologies in which the chemistry and the enhanced skin penetration technology were provided separately.

While the royalty rates and payment terms for the new product will remain confidential, OBJ has negotiated favourable terms including payment in advance rather than in arrears, with an adjustment mechanism for over or under prepayment. In addition, royalties will now be recorded upon shipment of the product by the manufacturer.

While this is the first such integrated product to come to the market, the Company is currently developing additional products using the same integrated format.

The product is expected to be launched in the second quarter of 2019 and will initially target SK-II’s growing online business.

“The upcoming launch of our first integrated product is an important milestone in terms of delivering a greater return on our technology development,” said Mr Jeffrey Edwards, OBJ’s Managing Director and Chief Technical Officer.

“It has also been a priority of the Board to reset the way our licensing term sheets with P&G are negotiated, and to this end, we are very satisfied with the outcome we have achieved for this product.”

The new Licensing Term Sheet covers all territories worldwide and marks the fifth product licensed by OBJ to P&G under the Master License Agreement between the companies.