When the 2nd Technology was announced back on April 27 2017, we were told that the first part of this agreement is covered under 'an existing agreement that operates between OBJ and the partnering company' via an 'addendum'.........this 'existing agreement' is the MLA (Master Licensing Agreement). As these 40 prototypes have only recently been delivered to P&G and it appears to be in two installments of 20. each, imo it is safe to assume that OBJ & P&G are running behind on their original timelines of having consumer trials conducted during calendar 2017. And don't forget that we were told that 'Following the initial consumer work, a second agreement will be executed to allow for refinement of new products utilising the new technology'. IMO, the deal won't be executed until successful initial consumer trials are completed. So in essence, it is not doing anybody any favours to allude each and every time OBJ Management head overseas that they are over their collecting a signature for the second part of the 2nd Technology Agreement. This will take time and most likely more time than was initially postulated by P&G. P&G move slow. We already know this by the fact that we are still waiting for a global launch for a single product after more than 4 years of executing the original MLA for MicroArray:
And then we got this, which confirms that we were never going to get an official 2nd Technology Agreement until P&G have outcomes from the first stage:
Here's what Shareholders were then told regarding the 2nd Technology (Personalisation) at the first (and only) OBJ Shareholder Conference Call 4 months ago:
'Personalisation: 2nd tech licence - Master Licencing Agreement - aim to get done before AGM, but dependent on P&G They must give us launch plans with intentions next 18 months And must have products on shelves within 30 months, or we have right to terminate Provisions in there that alow us to move forward Will take a full year to get product out 1000 person trial (considerable) Very exciting for company.
Prior to AGM should cement Personalisation as an additional and future income stream.' https://hotcopper.com.au/threads/focusing-on-the-positives.3767403/?post_id=28030506#.WnOxOa6Wbe4
Even though we were told by Glyn in the Conference Call that he hoped for the second part of Personalisation to be signed before the AGM; everything else released via the ASX and the AGM indicates otherwise.
Anybody who attended the AGM would remember the 2nd Technology prototype that was on display for all to see.
Here is what I posted in the AGM summary:
'All terms have been confirmed for the Second Technology Licensing Agreement, which is now awaiting the signature from P&G's President of Beauty & Grooming. We were also advised that the Second Technology will generate a much higher Royalty Rate. You begin to fully appreciate the terminology 'OBJ are at the core of P&G's Innovation' when considering the Second Technology Platform's potential reach into the genre of Online sales and customised skincare that takes into consideration specific skincare needs including geographical locations and climate. The end device will also have the capability to deliver multiple molecules depending on the consumer's individual needs. Very exciting and definately a paradigm shift in the way consumers enact their own individual and unique skincare regimes across a globe that reflects varying challenges, consumer needs and results. The days of applying any skincare products with your grubby fingers are well and truly numbered imo.'
I'm happy to provide some further clarity. There was a Magnetic device that was connected to a mini-tablet via a cable, on display at the AGM. Glyn advised that 20 of these prototypes had been provided to P&G for trials as per ASX Announcements. Glyn advised that the end product would have no cable and run via Bluetooth, but it was expensive. The device was not operational to show attending Shareholders how it worked. Personally, I didn't get as excited as Jase based on what was presented at the AGM. It looked a little clunky to me, but I very much got the impression from Glyn that the end product will look completely different anyway, which you would expect. As far as time-frames, this second tech is cutting edge, complicated and currently there is nothing like it on the market; so I would imagine the year after next...but who knows exactly how far advanced P&G are, as they did not begin this program yesterday.' https://hotcopper.com.au/threads/1m-devices-sold.3824844/page-107?post_id=28818749#.WnO3V66Wbe4
And here is what we were told two days ago in the Shareholder update:
Without needing to contact OBJ Management and with some measured and critical thinking as opposed to 'hoping' for a desired outcome that is measured with faith; it is clear at least to me, that 40 products represents 40 prototype products of the same device which forms part of OBJ's obligation under the first part of the 2nd Technology Agreement which is covered under the existing P&G MLA Agreement so as to expedite the whole initiative & preparation of these devices for initial consumer testing and trials. As part of the 2nd part of the 2nd Technology Agreement, that is yet to be decided upon and signed by both parties, there will be additional, testing/1000 person consumer trials. You simply can't conduct a 1000 person consumer trial with 40 devices unless they are shared; and this in itself presents all sorts of logistical nightmares.
There is always the possibility that the 2nd Technology device can be adapted to deliver multiple brands/molecules as previously announced to market. In the end, whether it is 40 or 400 individual products remains to be seen, but for now it seems reasonably clear that OBJ have now sent P&G a total of 40 2nd Technology devices for P&G to now fulfill their obligation of the first part of the 2nd Technology Agreement - Consumer Trials.
When I held the prototype for the 2nd Technology device at the 2017 AGM...I was nervous. It was a small generic tablet device with a hand-held device that was plugged in to one of the outlets on the side of the small tablet via a cable, and reminded me in essence of one of the first versions of the mobile phone for comparative visualisation:
Glyn mentioned that the end product would incorporate Bluetooth and be much sleeker, but at the moment, Bluetooth was very expensive to add to the prototypes for testing (Jase can confirm this). At this point in my discussion with Glyn, I was scratching my head (on the inside) and feeling a little nauseous. We can only assume that P&G's Technology Design team in collaboration with the OBJ team, have advanced what we all witnessed at the 2017 AGM.
When you join the chronological announcements to the Investor Conference Call and then on to the AGM; it becomes clear that 'The 40 products required to be developed under the existing licensing agreement for the second technology'.........are exactly that; OBJ's fulfillment of their part under the first part of the 2nd Technology Agreement where OBJ have have already been paid 2 installments of US$125,000 for the delivery of such devices and Licensing & stand-still payments....with another US$1,000,000 expected once the second part (MLA portion) is signed off for the 2nd Technology...all going well with Consumer testing:
One final point to consider that may have flown under the radar with some. In the recent Shareholder Update, OBJ announced that P&G had relinquished the following sectors in for MicroArray, including colour cosmetics, hair care & shaving:
While at first glance this seems to be disappointing news, we only need to cast our eyes back to an announcement that was released on 23/08/2017 - Australian Patent Office Grants Personalisation Patent, where OBJ state the following:
So although P&G have pulled the plug on 3 MicroArray sectors previously tied up under Exclusivity; it is probable that via Personalisation, that P&G may still be very much interested at least in one of the 3 sectors...Hair Care.
OBJ Price at posting:
3.6¢ Sentiment: Buy Disclosure: Held
(20min delay)