My comments/queries about the shareholder report from Wednesday....

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My comments/queries about the shareholder report from Wednesday.


"Revenues of $23,151 were received by OBJ Ltd for the December quarter. The balance of September quarter product royalties of $296,120 due during the period were deposited by P&G in January making a total of $319,271"

Comment/Query: The confusion of this has been debated at some length. Ultimately, however, I am satisfied with this because it demonstrates the commencement of a royalties revenue growth trend flowing into OBJ's company coffers. It will only increase hereafter. Thanks to the posters who provided us with graphs to see this.


"The 40 products required to be developed under the existing licensing agreement for the second technology have been delivered for initial consumer efficacy testing. This fulfils the first important phase of the program and enables consumer feedback to define the next stage, including the development of final products and software."

Comment/Query: Fantastic. Good to see this moving along. But what are the "40 products"? Are we talking about 40 "units" to be used by 40 people, or are we talking about 40 "components" constituting 1 consumer unit, suggesting it's an extremely complicated product. The word "products" is vague in this respect.



"The detailed licensing agreement has been finalised and is awaiting execution, which OBJ understands is passing through the various approvals process. This new license will see the first application of the OBJ electronic micro magnetic technology be commercialised in a manner that will enable a broader range of distribution pathways to be deployed."

Comment/Query: This adds nothing to what shareholders were told at the AGM in November. It's a vague statement filled with esoteric references to hypothetical situations that don't translate into anything tangible. I ultimately to this to mean that they have no idea what the hold up is or they don't want to tell shareholders what the hold up is.


"Discussions continue to take place with the Singapore-based Product Accelerator regarding the development and distribution of products containing the second technology. The possible roles for OBJ in this venture remain to be negotiated."

Comment/Query: I'm becoming a little impatient with "discussions" continuing to "take place". Perhaps the Accelerator can apply itself as its namesake suggests and increase the pace of these discussions. Also, why is OBJ in discussions with an Accelerator about the "second technology". I was under the impression that Accelerator corporate entities were in the picture only with respect to the commercialization of bodyguard. The "second technology" is exclusively P&G's domain, is it not? I wonder whether this is actually an erroneous reference in the report.


"An Addendum is being negotiated that confines the areas of OBJ’s Licensee’s exclusivity to OBJ’s microarray technology to a narrower range of skin care applications. The sectors previously considered exclusive included colour cosmetics, hair care and shaving, have now been released back to OBJ, enabling OBJ to offer products to the market containing microarray technology in these sectors."

Comment/Query: I have mixed feelings about this. Firstly, as @drmatt suggested a few days ago, this is good because it permits OBJ to pursue all of these extra areas of application with other potential partners without having to wait for P&G to think about it. As I understand it, P&G is relinquishing "exclusivity" to allow OBJ to do this (i.e. P&G may still decide later that they may want to explore these areas). So that's the good thing about this. But the bad thing from my perspective is that this variation of the original terms of the P&G Master Licensing agreement shows that OBJ seems to have unnecessarily committed itself to this exclusivity arrangement when they signed the agreement all those years ago. It deprived itself of the ability to pursue this areas of technological application with other partners, which areas P&G were obviously not interested, for all that time. What compensation did OBJ negotiate in the event that P&G just sat on their exclusivity rights in relation to certain areas and did nothing with them (i.e. "stand still" fees)? Apparently nothing. Frankly, this is demonstrative of poor commercial judgment and appears to have been to the detriment of the company's financial interests. But, as I said, thank goodness they've managed to unchain themselves from that problem now.


"This has been negotiated as part of the Company’s strategy to develop its own products for Distributors to the market. This will provide for far greater potential revenues to the Company rather than a sole reliance on receiving license fees. OBJ has been heavily involved in the design and development of various products with its licensee and continues to do so. That experience is now being directed at OBJ’s own products and a number of market sectors have already been identified for OBJ product development."

Comment/Query: I agree with this 100% and it is a huge positive, for the reasons I've expressed above. This has huge potential to generate huge revenues for the company. Let's hope management begin to exploit this opportunity sooner rather than later.


"OBJ will continue to support its key licensee for its technologies (two of which apply to skin care) in defined market places while pursuing its own products in parallel. OBJ is already working in one market sector that has been released by OBJ’s Licensee. The experiences gained in working closely with OBJ’s Licensee will be invaluable in this regard."

Comment/Query: Vague, vague, vague! They can't even mention P&G's name - all we get is "key licensee". Gone are the days when we got specific product updates and roll out plans. This is absolutely meaningless about what we can expect by way of P&G products next. I have inferred from this that OBJ was unable to obtain permission from P&G to report on anything for the purposes of this shareholder update. Very disappointing.


"Further to internal discussion, OBJ’s management has decided to distinguish between the two different applications for BodyGuard in all future communications. It will now be separately referencing applications for therapeutic and pharmaceutical use under the name BodyCare. This will enable the Company to continue the reference of BodyGuard for the iteration of the product containing the naturally occurring Lubricen formulation, separate to the BodyCare application containing formulations such as ibuprofen (IBU)."

Comment/Query: Excellent. Great to see the natural commercial evolution of the bodyguard technology by separating it in this way.


"The Curtin University clinical trial for IBU delivery (BodyCare) continues following the approval of the ethics committee and is expected to be completed during the March quarter. A major US-based potential licensee of the technology is awaiting these results before deciding whether to take on the BodyCare application. The trial will demonstrate the first use of the BodyCare product for pain relief.

A UK clinical trial has also been agreed with an international UK company to trial the BodyGuard product across a number of participants. The BodyGuard prototypes are being prepared by OBJ’s manufacturing partner based in Melbourne using the latest hydrogel sourced from the US, with the trial expected to commence during the March quarter.

The above trials demonstrate the intention of the BodyGuard/BodyCare product range to deliver a wide range of active ingredients to service the raft of market sectors that exist for the overall program using multiple distribution channels. In the coming period, meetings are expected to take place in Melbourne with OBJ’s manufacturing partner with regard to intended next steps. The partner have first right of refusal to manufacture and a non-exclusive right to distribute BodyGuard products via the Collaboration Agreement executed in 2017."

Comment/Query: Excellent. This is great progress and I can't wait to see the first deal signed up. The potential application and global commercial uptake of the bodyguard technology is huge. They must get these negotiations and final deals absolutely right. No mistakes this time please.


"OBJ continues its work with a UK based multi-national which is a market leader in surface cleaning. The party is presently testing OBJ’s microarray technology in its laboratory for potential use with its well-known hygiene brands. Testing is well progressed and the party is replicating previous testing that was undertaken with significant success in Perth. The two teams are expected to meet again during the March quarter to determine next steps. OBJ continues to invest development time into this exciting opportunity for the Company outside biological markets, and it remains optimistic regarding its ability to secure a suitable distribution partner in the short term."

Comment/Query: This is also great news. Good to see continued progress. It's slow, but I think this will also be a major area of commercial success for the company.


"The Directors have interviewed a number of potential candidates to join the Board as part of its proposed restructuring. The Directors are confident this will provide important additional skill sets as the company executes on its product strategies. It is expected that a suitably qualified candidate will be invited to join the Board in the March quarter."

Comment/Query: This will be great to see. The sooner the better, so the company's management will be supplemented with business acumen that will advance the company's revenue generating activities with greater speed and efficiency.