Perth Presentation, page-4

Bedding Manufacturers - Bob had a disagreement with the ASX about this - they wanted a name. He said that it will be obvious with a bit of research that it's one of two possibilities, and our best HC researchers nailed that pretty fast.

This conversation actually brought a whole heap of subjects into play, because the whole product insertion has been disappointing over the last couple of years for this market. They acknowledged this, and we discussed the previous management approach, the company structure and the development of analytics.

Pillows - they're still with us, and our favourite pillow manufacturer is actually currently providing quite a good stream of revenue for the company which is increasing by the month. Further growth is forthcoming.

Possible competition -

IP Protection - the flame retardant IP is as tight as a drum, because it's the chemical makeup which is patented. Alexicool is not quite as tight, as the secret is in the process of manufacturing more than the makeup of the product - so they are keeping the suppliers o a minimum - one at present and perhaps three in the long run - once they are satisfied with the security.

The aim is to have a couple of chemists working full time in the future on developing solutions and patenting the results to surround the current IP with a further wall of prevention. So that works into future development as well as IP protection.

Turnover & Profitability - yep, it's been a problem, and they acknowledge that. They are happy in the ramp up they currently have and the balance between growth and cost for production purposes, and note that the rates are well matched for their projections. Military may pose a load when it initially comes on line, but they are happy with the way things stand.

Debt - Jason acknowledges that deal was not the right fit for the company - being a high interest term loan. He is talking to the lender every 6-8 weeks, and they are all comfortable with the current situation. They may refinance or extend the current loan later next year, it depends upon how the financial situation improves over the next 18 months. There do not seem to be any obvious triggers for the option take-up, and they also note that the lender is not a company that would like to take that route (unlike some of the bloody sharks that hang around in that area - from my experience).

Company Structure - So - they are running at full steam, your CFO is also a COO, your CSO is also your CEO. They reckon it's ok at present, it will need to be looked at down the track. Some more middle management is what they will eventually need, but it's not in the near future.

Sue and Rosheen - it's as we suspected - Sue found the workload too much between her obligations here and to Alexium. She did much to help the company its direction right, and has handed over to somebody she knows well, who Bob says is brilliant for the role of negotiating agreements. (Maybe it's an insight … they nick-named Sue Margaret Thatcher ) So the Gavin to Sue to Rosheen have both been the right steps to take. They note that the board is well composed, with Gen Chaney now having the insight into military process and Claire and Rosheen having really constructive input into the company.

Risk Management - what if Bob gets hit by a bus? He said a few years ago - they would be screwed. There has been some focus in how they deal with these things, and they are happy that, whilst there may not be a one for one replacement, all of the upper management can be replaced with the current staffing. They have been working on giving people the exposure they need to perform the roles, and are confident they are getting close to having no vulnerability with any position in the company.

Gavin - has not sold a share, and therefore is still interested and calls them every now and then to argue with them

Nick - I get the feeling that everybody feels a lot happier now that they don't have to spend their time cleaning up after him. They acknowledge his over-exuberance has caused most of the SP issue, and have deliberately taken the recent line to avoid repeating those mistakes.

Jetlag - nah - they were fine

I'm sure you'll all enjoy the meetings in the other capitals - and will add to this (as hopefully anybody at today's meeting will, if they feel the need). I won't try to deal with 3 hours of nuance and detail - it's too much. But at least this may give you an insight into how it went.