mxl- green alert >20c, page-6

With $7m in cash not sure why anyone could value at zero at the current time. Can you please post the research giving why the reason that it should be zero, is mxl owing creditors more than it has or is it in a negative net asset value or at verge or bankruptcy- I will accept if facts are given, maybe someone knows more than I can analyse, research or read? Lets have a reason for why mxl is $0.

If not I now like to support it further with the Chairmans address a few weeks ago (which Comsec has probably missed). Read for yourself. Basically mxl will be cashpositive this year. They have achieved a lot in the last financial year and a history of events has been given and you can see the progress over the last 12months and consequently the share price from about 3c in 2001 to a high of 18c this year. I have followed it since when it was 3c, in fact it dropped closed to 2c and a very much unloved stock and I thought it had potential, the eMinerva in its infancy.

It is about mid range at the moment and with the phase of business it is in at the moment, the momentum and potential is there to beyond our green target. I am not suggesting that if we get it for 11c today that by Jan 2, it would be 20c plus- not suggesting that at all. Just saying that the fundamentals and achievements to be made over the next year, it is likely. Possible events may be as follows:

- 30Dec 11c no announcement
- 15Jan 13c market sentiment improve
- 10Feb 8c war possibly
- 15Mar 14c announement imminent
- 15Apr 18c new contracts, microsft
- 15 May 20c+ new distributors, asia
- 15 June 20c+ positive casjflows

So yes, no straigth, never suggested that. There are too many uncertainties. But if we take a longer term view, say 1 or 2 years from now with a revenue of over $50m as indicated by the chairman, mxl has to well over the green target zone of 20c. Mxl has learnt from last year on distributors selection and charging up front licence fees, so immediate revenue compared to last year- so we can expect a lot more from this year.

Of course the risks are:

- world events
- brokers valuing mxl at zero, rightlyor wrongly
- new products coming in the market
- the worst and very real, the system fails and mxl is made liable.

The last point is very real in the IT industry so that risk is inherent in their business, but so long as they are diligent and make appropriate testing the risk is significantly reduced.

Anyway Research yourself and see if you agree. There is no point me trying to approach this from different angles as there will always be someone who would disagree- thats how we havea market, I suppose!

Bigprofit

MXL LIMITED. 2002-11-29 ASX-SIGNAL-G

HOMEX - Sydney

+++++++++++++++++++++++++
Looking back over the past two years I continued be surprised at the
progress the business has made. Last year when I addressed you at the
AGM I was referring to our new web enabled product and what we were
hopeful for in the market in the future. This year I am able to stand
before you and speak with some certainty of the future and reflect
with pride on our achievements over the year. While the future
remains all important I would like to take a short time to reflect on
our progress over the year and in so doing lay the foundation for why
my belief for the future is so strong.

1. October 2001: MXL commits itself to the education software market
completely. All H/R related business activities are closed or sold
off and associated staff made redundant.

2. November 2001: MXL launches eMinerva into the market as the first
web based college management system. The system went immediately into
site testing both in Australia and the UK. Feedback from these beta
sites allowed MXL to enhance further versions through until May 2002.

3. November 2001: MXL appoints MDM as the UK distributor for
eMinerva. MDM later acquires endorsement from ARELS, a UK education
peak body, for eMinerva as the recommended management system for
their 350 colleges.

4. February2002: MXL begins the migration of all existing CMS
customers across to eMinerva. This was a big task and while most have
agreed to migrate, a small number continue to resist. The magnitude
of this task needs to be understood in the context of the very poor
manner in which most of the clients had been treated by former staff.
There was considerable antagonism held towards MXL and although
much of it has been overcome there still remain small packets of ill
feeling. As I speak, the conversion process is underway with the
initial tranche to be completed by the end of December 2002 with the
remainder scheduled for early 2003. It is important that shareholders
understand the importance of this task and the consequences that it
has had for the business. If we could not reach agreement for the
customers to migrate we would not have had a sufficiently deep
reservoir of reference sites to convince sceptical potential
customers and the investment market that the product worked. The
effort involved was a major drain on our small sales team and this
impacted heavily on the development of new markets and customers. It
has only been over recent months that this has occurred with
startling results.

5. Our efforts over the year will result in us installing eMinerva in
170 sites between now and June 2003 without any additional sales.
Indeed, we are at various stages of negotiation with organizations
that in total have approx 5 million enrolments annually.

6. September 2002: MXL announces signing a solutions development
partnership with Microsoft. The benefits of this are already
beginning to show with eMinerva now being taken up by a number of
Microsoft distributors globally. We are currently in discussions with
Microsoft regarding them participating in a major launch of the .NET
version of eMinerva early in 2003.

7. September 2002: MXL signs a contract with Bond University for the
installation of eMinerva in its international college. eMinerva was
selected following a 2 year global search by Bond for a management
system.

8. October 2002: MXL signs distribution agreement with Softline for
the sale of eMinerva into Russia. Softline is the largest reseller of
Microsoft software in Russia.

9. October 2002: MXL signs contract with Queensland Government
Education Department for the installation of eMinerva into 27 schools
as an initial trial before extension into its broader school network.

10. November 2002: MXL signs distribution agreement with Aztech
Business Solutions, a Microsoft distribution partner, for the
distribution of eMinerva in Australia.

I hope this quick snapshot brings into focus the progress your
business has made in a little over a year. Although considerable,
work remains to be done, MXL now appears poised to reach its full
potential. Critical within this work is the further development of
the relationship with Microsoft,the maximization of performance from
our distribution partners and the ongoing development of our
products. I will address this shortly.

Importantly, we must now also work harder than we have ever done with
the stock-broking fraternity to bring their perceptions of our
business in line with the real potential of this business, some of
which I outlined earlier. This work has begun and I shall later go on
to explain what I see as the issues and what we are doing about them.

In terms of our product development program we are following two
streams. One, the ongoing enhancement of eMinerva and two, the
integration of appropriate Microsoft software to deliver a full end
to end, or plug and play. Microsoft accredited solution. The
development program for eMinerva included the design of the product
to be able to span market segments other than the post-secondary
education market. The product is now capable of spanning the quite
distinct markets of kindergarten to year 12, the tertiary sector and
the corporate training market.

Our initial attention will be given to the finalization of the k-12
product so we can begin to chase sales in this very large and
lucrative market both here and overseas. The Microsoft stream is much
more strategic in nature and is about developing a full Microsoft
global education solution. To this end, we have already begun work on
the integration of the Microsoft general ledger product, Great
Plains, which will be submitted to Microsoft for accreditation in the
first quarter of 2003. Depending on market requirements we can
immediately follow up with the integration of another general ledger
product, Navision, which is widely used in the European markets and
is also developed using double byte technology that affords easy
conversion to multi-language. Our Product Development Team is also
currently reviewing a number of other Microsoft products, including a
soon to be released Customer Relationship Management System to assess
their value-add for eMinerva. Our goal is to establish eMinerva as
Microsoft's education solution.

The issue of the perception that the investment market has of our
business is a function of a number of factors. One is the perception
that the company has not performed in the local education markets.
Nothing could be further from the truth. We installed our first live
beta site on October 22 last year, just over 12 months ago. When we
started to aggressively sell eMinerva in February and March this year
we had to overcome a profound mistrust of the internet and a natural
reticence to try a new product in the inherently conservative
education industry. Today we have over 170 sites either installed or
booked for installation by May next year and we have additional
bookings out as far as September.

The price of eMinerva has increased from $5,000 plus a $5 per student
per course royalty to $30,000 (including 3 days training) plus up to
$10 per student per course on-going royalty. Our break even, based on
worldwide costs but only accounting for Australian revenue, is
estimated to be the last quarter of this financial year, although
this is contingent on there being no drift in current implementation
schedules. We are anticipating international revenue in that time
frame but as the quantum and timing are not specific we have not
allowed for such in the above projection.

It needs to be recognised that the Australian market is probably less
than 1% of the world education market and we have really only just
started to sell in this market. We are nevertheless confident that
the Australian generated revenue streams will sufficiently cover all
incurred costs worldwide in the short term.

From here the name of the game is scale. The larger markets are all
overseas based and hence we are concentrating on appointing qualified
overseas distributors. These distributors must not only be able to
sell the product but also to install and service it. Our early
experience with overseas distributors was not good. Lessons were
learnt which have led us to charge up front license fees for the
distribution agreements to ensure the distributors are serious. I
must say that the Microsoft deal announced in September 2002, which
gave us access to Microsoft's distribution network of 4000
distributors in 96 countries, has been of enormous assistance. The
support person appointed by Microsoft to assist us in dealing with
the Microsoft distribution network pointed us in the direction of
those distributors that can operate in education markets and hence
are more suited to our needs. Each of these Microsoft distributors
executes a distribution agreement and also pays an upfront license
fee. It's important to note here that, while we remain open to
securing our own distribution partners, there has been a significant
turnaround in that we are now actively being sought out by Microsoft
distribution partners for the rights to sell our products.

As I noted earlier, we are talking to, negotiating or have signed
deals with groups representing around 5 million students worldwide.
We are not suggesting that all of these current discussions will lead
to contracts but target signings of that magnitude are our minimum
expectations over the next two calendar years. We have only just
started to expose our product to the vast international markets and
the early response is very positive. Common refrains are that "there
is no other product anything like this in the world" and "this is
light years ahead of anything we have evaluated". One large overseas
group, to whom we are currently demonstrating eMinerva, has 187
separate systems throughout the 1200 schools in its group and not one
of those systems works properly according to them.

There is even a major misconception about our potential for the state
schools systems, both in Australia and abroad. We have already
entered a joint tender with Microsoft for one eastern seaboard state
government school system, which would generate in excess of $4.5m
annual royalty revenue for MXL if the tender is successful. We have
announced our first small contract from the Queensland Education
Department and we are talking to a section of the education
department of a third eastern, seaboard state government.

In a cynical stock market, progress in sales in Australia is but one
plank in gaining recognition. At the end of December, our listed
options are due for conversion by the payment of 5 cents. The options
not controlled by interests associated with the company have been
underwritten by Kefu Underwriters Pty Ltd, which will ensure that we
are more than adequately capitalised in the new year.

The final plank needed for market credibility is recognition from one
or more significant broking firms. Most brokers looked at the market
capitalisation and compared it with the current (albeit diminishing),
losses and the tight financial position until the options are
exercised. There has been no allowance for what is happening under
the Microsoft agreement, what the distributors are trying to do and
what business we at MXL are in the process of generating directly. To
reiterate: our goal is to become a Top 200 Stock within two to three
years, with a minimum recurring royalty revenue above $50m annually
in that time frame. Existing discussions and negotiations give us
confidence in the projections, although we have only just dipped a
toe in a very large pond.

Nor is there any understanding of what we propose to deliver as soon
as we move through break even. We have no stock or debtors. The way
our software has been designed, plus the control we have over the
network infrastructure, gives us very high levels of security over
our revenues and unpaid use of the system. We expect to have minimal
bad debts, minimal need for working capital and consequently a very
high payout ratio with share buy backs if and when appropriate.

Finally, there is no understanding of the tight cost structure. There
is currently 12 staff in total and we don't envisage the need for
more than 20 staff for eMinerva, no matter how large we grow. Where
we have, had to cover all the bases from sales to installation, after
sales service and software development that will soon change. As we
appoint distributors worldwide our sales and support teams will
become distributor supports, while our major focus will be on
software development.

Our goal is to ensure that when eMinerva is installed in an
educational institution it will be virtually impossible for a
competitor to win that business down the track. The only ongoing cost
for the institution will be the royalty payment that is generally
passed on to the students so it will be a very hard sell for
competitors to place an expensive alternative product into
institutions if we continue to provide the service and systems
upgrades that they need or want.

Our small but incredibly dedicated and talented team has achieved
much in a very short period of time. Thanks to their efforts your
company should move into monthly profits before the end of the
financial year and substantial profits in FY03. The team, apart from
those elsewhere on company business, are all present today and will
no doubt look forward to talking to interested shareholders after the
close of the meeting.

In conclusion, the excitement among the staff is real. Our task is to
deliver the major sales contracts currently under negotiation, which
will transfer that excitement to all shareholders.


G Tetley
CHAIRMAN