Ann: Update on gridComm transaction, page-2

Following the completion of due diligence process, progress has been made on a number of
commercially significant undertakings which are summarised below:

•   A Singapore Israel Industrial R&D Foundation (“SIIRD”) grant of USD 400,000 has been signed. The grant is provided by the Israeli government to assist in joint development of GridComm’s technology and the roll out of the GridComm solution in Israel;
•   Pre RTO Funding of SGD 550,000 has been closed by the Company directly from sophisticated investors in Singapore.
•   Initial deployment contract with the Singapore Government signed. GridComm to deploy street light control units in parks managed by the National Parks Board in partnership with Intel;
•   Indonesian deployment has commenced with purchase payments received and equipment shipped. The Company is now ramping up production for future deliveries; and
•   Approval to proceed with takeover will be subject to ASX and shareholder approval.
  GridComm is a technology company that enables data communications across existing power grid systems of cities to achieve a level of control and cost savings not previously possible. The Company believes it has the most reliable power line communication system. The Company’s technology has won contracts under competitive tenders as well as achieved industry awards globally.
  GridComm’s near term objective is to deploy its power grid networking system and software solutions for street light management. Street lighting systems are currently experiencing large incremental CAPEX as local authorities take advantage of the lower energy and maintenance costs of LED lighting and networking management systems. GridComm’s networks and software drive these cost savings.

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The number of power line communication connected devices in Asia is expected to grow from 60 million in 2014 to 400 million by 2020. (Source: Northeast Group, Global LED and Smart Street Lighting: Market Forecast.) Power line communication is the standard in smart grids in Europe and China.
GridComm manages all aspects of the system integration from supply of the control chip and software enabling programs. The management team have driven the development of the technology and have 25+ years of experience doing data communications and smart energy solutions in large companies and startups
Along with operational distribution experience, GridComm possesses the corporate expertise required to realise an aggregated model that encompasses the entire value chain of the industry. GridComm enables the world’s more reliable network over a city’s power lines and then uses this network to connect a city’s street lights, saving governments millions of dollars in electricity and maintenance costs. This network then is the back bone for smart city implementations, connecting sensors through a city in IOT implementations.
The key distinction of GridComm, is that it has diversified long term growing income streams tied to supply of multiple services to cities and significant cost savings
The Commercial Opportunity
The directors and management of GridComm believe there is an unprecedented commercial opportunity to grow exponentially with the growing demand for energy and cost savings from connected streetlights and smart grids as well as the emerging internet of things (“IOT”) space via the deployment of sensors connected to the power grid.
GridComm’s networks are currently deployed in 4 cities in China and is currently rolling out its service in Jakarta. In addition, the Company is undertaking trials in Singapore, Spain, Germany and Russia plus 3 other cities in Indonesia.
In addition, the Company is in advanced negotiation in Australia.
The GridComm’s revenues come from initial installation and recurring streams from network software and shared costs savings on energy and maintenance. These create secure long term cash flows with a very high gross profit margin.
The anticipated timetable for re - compliance is May 2016.