Question for Twinvest, page-22

Tronbirk,
You raise some valid points and these are also things I think about quite regularly. I believe I may have some points for you to think about regarding your queries above.

MNG products have been around for 4 years now. If they are so good why aren't they selling?
My personal belief surrounding this question is that up until recently the companies testing have not had their hand forced to make a change. The companies target appeared to be included in many existing products however as you will see over the last four years the focus of the testing companies has predominately been tests etc that previously have not been possible. (look through the list we know now and see for yourself) This is forcing the majors to evaluate M&G and if they are going to include in their new products they will include in the old ones too (where possible) to get the COGS savings or extra sensitivity. I also believe that once we get one or two on board then the situation will snowball. The company is also looking to purchase a manufacturer it seems so if they dont sign up we are going to make them one way or the other.

Where are the results from these commercial agreements?
The Affy deal which was predominately the one we all thought would make us cash flow positive had a set back that luminex was providing the beads for affy and we could not get the cost savings with less antibody to include it in the AFFY products. M&G of course makes low quality beads the gold standard and Luminex provide (from my understanding) some of the best beads. The company from my understanding were not aware of this. I believe the company are also working with Luminex so one way or the other one day we should be included.

These paid R&D collaborations don't add up. Twin you have said that with 3-4 ADO scientists - pre royalty revenue is roughly $1million. Where is this $1million? This is a serious question and I'd like you to answer it if you can, but I somehow think you don't really know.

This is something I will be asking at the AGM for my own confirmation but I believe this has been addressed on the thread already?

I see - satisfactory completion, further improvements can be possible, we will meet with them at a conference.- It doesn't sound so great to me, it kind of looks like they are now searching for different ways to impress BBI. If a deal was close why would they meet at a conference and why even mention this?

I know for a fact that the company after stage 3 are negotiating the terms of the deal as before the three stages they didnt know how much value they could add to the products. Now they do and I am making the assumption that BBI were expecting to get the inclusion of M&G for much less than what we are asking. It looks to me like the new break through's mentioned in the quarterly will also give us some more bargaining power so I would not be surprised if this was discussed mid-november.


This is just fluff – It's like saying you've got a dating agency to find you a girlfriend – she must be rich, work well with you, and be responsive to your sticky stuff which will hopefully develop into a growing family.

How are ADO going to get this girl when they don't have enough money to buy her a ring?

I dont agree. I see this as a strategy to force the majors to come to the table or we will start manufacturing our own products and sell them direct. This will then mean we can ask for a higher royalty % IMO as they will either have to buy the beads etc from us or pay a higher royalty to use their own with M&G. I believe the company is waiting for one of the major contracts to come off and they will do a CR at a much higher price to purchase the acquisition. The reason my thoughts surrounding this is due to the comment "We have engaged FP due to our increased market cap." The SP has come back quite a bit since then so once they get it moving with a deal I think you will see another CR which is positive if they are purchasing a business which is cash flow positive and force the majors to come to the table later down the line!


I also question whether Philips? will actually be able to launch this product at the end of 2015. If ADO have just received the base product to further develop, it either means one of three things - it won't disrupt what production facilities POC1 may have already set up to make the product; they don't really need ADO for this part of the product; or things will be delayed.

I wouldn't presume that ADO will increase revenues over what was initially thought because they have access to the whole unit. It may turn out to be very positive but as mentioned they may be non-obvious = non essential.

I contact Philips every couple of months to enquire how things are going with the minicare system. From what they have told me when I started this 12 months ago or more they are actually ahead of where they told me they throught we would be. I am still not convinced we will be in the inital launch for the sensor, but it looks like the company is working hard to become involved and if what Josh has proposed to them is really a major value add then you might see us involved in that also. Either way, my view is we will know by the end of the first quarter calendar 15 or perhaps sooner.

Overall, the progress is slow but I see it going in the right direction. I also see them initiating strategies so if as they say in the quarterly they cannot force companies to sign deals now, that they will be able to once the acquisition occurs.

I am really looking forward to the AGM and meeting alot of the long termers and some of the newbies too. I am confident we will get there but just not as fast as some would like.