potential to licence out tdu technology overseas

It seems that Steve has been churning out a few email replies lately, lol. I got a reply within 24 hours also.

I made enquiries as to the relationship b/w TOX free solutions and tox free systems. I also asked if TOX can get royalties or licencing fees for the licencing out of their technolgy.

Very positive reponse.

Also enquired about the conservative nature of TOX profit forecasts. I was also very happy with the response. I understand he couldnt give too much away but I could pick up on plenty of positive vibes. As Steve says, the $3 profit forecast does not contain events outside the normal course of business (ie spills, accidents etc at major manufacturing plants)


Heres really looking forward to a great future for TOX

Cheers



In response to your email

1. Tox Free Solutions Limited has a small equity holding in Toxfree Systems Inc. The only common activity is the right to use the Thermal Desorption Technology, which Toxfree Inc has for the USA, Canada and Mexico. We make no claim at all to being able to treat chemical and biological weapons. Tox Free Solutions is entitled to licence the TDU to the rest of the world under whatever arrangement it can negotiate and we will look at this possibility in the future.



2. It should be noted that when the profit projection for the 6 months from January 2005 to June 2005 was prepared it was very early days in the new direction for the Company and the initial projection of $700,000 was based on our corporate view at that point in time. As we progressed through the first half of 2005 and were reporting monthly cash balance we exceeded these projections and hence the decision to publish a monthly profit estimate to keep the market informed.



In determining the forecast EBITDA for 2005 to 2006 there were many variables to consider over a 12 month period and we decided to work to a base case we believed was achievable. We did not want to present figures which required subsequent events to occur before they would be reached, hence the base case philosophy was adopted. The base case does not allow for any income derived from events outside the normal course of business (ie spills, accidents etc at major manufacturing plants) and these would account to some extent for the difference between your $3,916,000 projection and the base case $3,000,000.


We believe that to be credible in the market place we need to be able to deliver on our forecasts and strategic plans and this forms the basis of our announcements, we will report quarterly and if EBITDA appears very likely to be substantially higher or lower than forecast will announce separately.

3. As to the comparison between the initial 6 month forecast for 2005 and the actual I don’t believe the same multiplier will apply to the base case forecast for 2005 to 2006 as this would mean an EBITDA of $6,000,000.