Alexium International Group Limited (AJX.AX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the 2025 Annual General Meeting of Shareholders of Alexium International Group Limited. My name is Simon Moore, and I'm the Interim Chairman of your Board and the Chair of this meeting. It is now 10:00 a.m., the time appointed for the meeting. And as we have a quorum, I declare the meeting open. Today's meeting is being held in person only. However, as you can see, we have made arrangements for online participants to watch the AGM. Please note, online voting will not be facilitated during today's meeting. I would further request as a courtesy to all here today that mobile phones be switched off or set to silent mode. After the formalities of today's meeting, we will hear from your Chief Executive Officer, Billy Blackburn. Directors and other attendees, I would now like to introduce the members of the Board. With me today is James Williamson. James was appointed to the Board on the 21st of November. Online, we have Dr. Paul Stenson; Billy Blackburn, our CEO; Martyn Strickland and Randy Lane. Online, we also have our Vice President, Finance, Lisa Hubka, who has tendered her resignation and will be leaving us in January. We thank her very much for her contribution to the business over that time. And our Senior Operations Accountant and VP Finance Designate, Heather White. Our Company Secretary, Mark Licciardo from Acclime Australia, is represented today by Sandra McIntosh. And our auditor, Grant Thornton, is represented today by partner, Nicholas Smietana, who we will be able to respond -- who will be able to respond to any questions relating to the 2025 financial year audit. Also in attendance is our share registry, Automic, represented by Beck Marshall, as the -- who will act as the returning officer. I remind everyone to register with Automic. And if you have not, please do so. Procedural matters, voting. All resolutions will be voted on by way of a poll today and will be conducted after all resolutions have been put to the meeting. When you registered at the attendance desk this afternoon or this morning, you should have received a voting card from Automic. Members holding a yellow card can vote and speak at the meeting. Members holding a blue card can speak at the meeting. And visitors holding a red card are not eligible to vote or speak at the meeting. If there is anyone present who is eligible to vote, but has not received a yellow card, please see a representative of Automic at the registration desk now. I would like to highlight that where undirected proxies have been given in favor of the Chairman, I will be voting these proxies in favor of all resolutions being put to the meeting today. As provided for in our constitution, I have determined to conduct a poll on each of the resolutions being put to shareholders. The poll will be held at the end of the meeting with the results of the meeting announced to the ASX as soon as practicable thereafter. Proxy votes. After discussion of each resolution, the proxy votes will be displayed on the screen for each resolution. Questions. I would remind everyone in attendance that this is a formal meeting of shareholders. While visitors are welcome, only members of the company, proxy holders or appointed representatives are permitted to ask questions. I will address questions as I move through the respective items of business. At the end of the meeting, there will be an opportunity for general questions. Notice of Meeting. The notice convening the meeting has been provided to all registered shareholders and will be taken as read. Voting exclusions. Resolutions 1, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 are subject to a number of voting exclusions, which are detailed in the Notice of Meeting, should anyone wish to review them. Ordinary business. The first item of business is to receive and consider the annual financial report of the company for the financial year ended 30 June 2025, together with the declaration of the directors, the directors' report, the remuneration report and the auditor's report. Are there any questions or comments in relation to the annual financial report? No questions from the room. Ladies and gentlemen, if there are no further questions or comments on the annual financial report for the year ended 30 June 2025, I will declare them as received and considered. We will now move to the resolutions on which shareholders, representatives and attorneys of shareholders and proxy holders are being asked to vote. Resolution 1 relates to the adoption of the remuneration report. And I won't read the actual resolutions themselves. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 1? We will now move on to Resolution 2. As the resolution relates to myself, I will ask James Williamson to assume the role of Chair.

Thank you, Simon. Resolution 2, the reelection of Director, Simon Moore. Results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 2? We'll now move to the next resolution. I'll hand back the role of Chair back to Simon Moore.

Thank you, James. Resolution 3 relates to the election of Director, James Williamson. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 3? No. We will now move on to the next resolution. Resolution 4 relates to approval of the Employee Securities Incentive Plan. The results of the proxy voting are as shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 4? No. As the resolution -- as the next resolution relates to myself, I will ask James Williamson to assume the role of Chair.

Thank you, Simon. Resolution 5 relates to the issue of Shares in lieu of 2025 and '26 director fees for Simon Moore. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 5? We will now move to the next resolution, and I'll hand the role of Chair back to Simon Moore.

Thank you, James. Resolution 6 relates to the issue of Shares in lieu of 2025, '26 director fees to Dr. Paul Stenson. The results of the proxy voting are as shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 6? Resolution 7 relates to the issue of Shares in lieu of 2025, '26 director fees to Randall Lane. The results of the proxy voting are as shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 7? We will now move on to the next resolution. Resolution 8 relates to the issue of Shares in lieu of 2025, '26 director fees to Martin Strickland. The results of the proxy voting are as shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 8? We will now move on to the next resolution. Resolution 9 relates to the issue of Shares in lieu of 2025, '26 director fees to James Williamson. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 9? We will now move on to the next resolution. Resolution 10 relates to the issuance of Shares in lieu of 2024, '25 financial director fees to James Williamson. The results of the proxy voting are as shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 10? We will now move on to the next resolution. Resolution 11 relates to the approval of the Share Appreciation Rights Plan. The results of the proxy voting are as shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 11? We will now move on to the next resolution. Resolution 12 relates to the grant of financial year ending 30 June '26 share appreciation rights to a related party, Billy Blackburn. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 12? We will now move on to the next resolution. Resolution 13 relates to the grant of share appreciation rights to a related party, Randall Lane, for retention and extraordinary involvement. We will now move on to the next resolution. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 13? We will now move on to our last resolution, Resolution 14 relates to the approval of the 7.1A mandate. The results of the proxy voting are shown on the slide now being presented to the meeting. Are there any questions or comments in relation to Resolution 14? That concludes the formal items of business to be considered at today's meeting. General business. I note, no shareholder questions have been registered prior to the meeting. Have any other questions been received on Teams? At this point, there have been no questions received on Teams. Thank you. Poll process. That concludes the formal business of the meeting. As there are no items of general business of which notice has been received, we will now move to the conducting of the poll on all resolutions. I will now hand over to Luke Larson from Automic, who will manage the process of the poll. When the voting has been collated, the results will be declared on each resolution and released on the announcements platform of the ASX. Closure. Thank you, ladies and gentlemen. That now concludes the formal part of the meeting, and I hereby declare the meeting closed. Thank you all for your attendance and interest, and we look forward to your continued support in the coming year. Thank you once again for your support. I will now hand over to Billy for his presentation.

Thanks, Simon. Give us one moment. We'll prepare the presentation. Okay. Good morning, everyone, and good evening to those in the U.S. Thank you for joining us today. All the shots of the directors there that were just introduced, noting again, Lisa is leaving us, and we regret that. She's been a wonderful person to work with, and we welcome Heather White to the team. She's taking over as VP of Finance. So we expect great things to come. We use this part of the presentation quite often to frame in who Alexium is and what we're focused on. And I wanted to use it today to make an introduction to those that are new to Alexium and then those that have been with us for a long time to use it as a forum to restate some of the focuses of the company and some of the things that have changed. There'll be a thematic throughout today's discussion around how we've changed the focus of the company to ready it to scale. And I'm going to emphasize that we've refocused 2 key technologies for the business. The first being our microencapsulated phase change materials and formulated PCM coatings from those phase change materials. And then secondly, our flame-retardant technologies and the formulated products from those technologies. So we're leveraging our proprietary technical innovation basically to deliver thermal regulation, dehumidification and flame retardant solutions. So what does that mean? I'll correlate it to the products today, but I'm also going to showcase that we've narrowed the focus to focus really on scaling manufacturing. We've got a number of large opportunities that are going to require the company to put its resources and energy towards operations and sales readying for scaling up. Historically, Alexium has been a pioneer in microencapsulation, specifically in the phase change materials area. We also have rolled out some innovative composites, DelCool and Eclipsys to name a few. We've shifted focus away from the composites in recent periods to put most energy into our coatings and components made with our coatings included. So we're really building on 3 core competencies. That's thermal management for comfort, mostly in bedding, but also starting to break into furniture. Microencapsulation, we've made significant strides in our microencapsulation technology shells, and how we produce them and how we formulate from those shells. And then protective coatings, mostly in FR, flame resistance, flame retardant coatings that protect apparel and also bedding and furniture. With our patents, excuse me, with advanced research, product development, and analytical laboratories, we've focused actually those technical skills and technical staff to supporting manufacturing and getting the products ready for larger markets, broader applications, global distribution and scaled manufacturing. With our patents, we are really leveraging that in the phase change material and FR spaces now. So the shift has really been made in the company from research and development and those resources being allocated to improved manufacturing and process product improvements, again, for larger volume applications. And lastly, we make our products in the U.S. and we distribute them globally. And what does that mean? In short, we have made it through the initial phase of the new administration in America, and a lot of the global trade disputes that are going on. Our supply chain is mostly unimpacted by tariffs and global trade disputes. And by making our products locally, we have a strong supply chain, and then the improvements we've made to the products then in turn, allow us to reach customers in faraway regions globally. So in review of FY '25, it did not meet the targeted financial results. Despite that, we had a significant year of progress. Again, commercial focus was narrowed to markets, customers and Alexium products that best position for significant near-term growth. The company structure was drastically altered to place full emphasis on sales and operations, readying the organization to scale up. We narrowed the focus in our technologies and products to our FR coatings, and that was the first of the 2 primary technology focuses. It's also the largest opportunity near term and long term for significant financial growth for this organization. The FR market is much bigger than the comfort space for microencapsulated thermal products. Also, we focused on our core product, core suite and core technology and microencapsulation of phase change materials. So that was our second of the 2 primary focuses, and it represents the fastest path to securing cash positive results. It's also created a sustained strategic advantage in our core market of bedding products. We're on a very short list of companies in the world that have the expertise to make microencapsulated phase change materials. Distribute them globally, then also make advanced coatings for the furniture and bedding space. Focusing on our strengths, really, in short, what we're saying here is we've basically narrowed the focus to our core competencies and to the focus of the pipeline opportunities for the company to grow significantly over the next 12 months. When I first arrived at Alexium, this was more of a technology company focused on developing intellectual property. It was being led by scientists, and the focus was really on selling technologies and developing technical offerings. And the target audience was in the market, mostly technical companies and technical groups within those companies. We spent the last 3 years really shifting the focus to a sales and manufacturing organization, shifting our energy and staff to getting the company ready to scale up and produce larger volumes of the products that we had narrowed the list to, and also playing on our core strengths. And in that period, we really learned that we had nice products, nice technology in the FR area that offered broad market applications. We narrowed those applications really to the core markets where we were focused with bedding, so we could get most of our energy and our efforts in development in those markets and customers where we were selling comfort products for cooling, thermal management. So in short, what that means is, many of the customers we targeted for microencapsulated PCM products and formulas are the same customer base we're targeting for FR coatings for furniture and bedding, except for one exception, and that is the U.S. military for FR apparel fabrics, which we've made nice strides in the last few years, and even most recently, we've made significant breakthroughs there. But what I'm going to show tonight and the thematic that will play throughout this is the focus on these 2 areas and how that's positioning the company for significant turnaround and growth. The other piece is, we have reduced our expenses in the R&D area commensurate to these reductions. That was in late 2025. So you'll see those numbers start to play out in the FY '26 financials as we report in the coming quarters. And really, we're going to refocus resources, overhead and expenses towards, again, manufacturing and sales, and pushing those products that we've developed over the last several years into the market for significant growth. So in essence, it's a short summary of this is we've shifted our pursuits to a more pragmatic company focused on selling a lot of what we're good at, making a lot of it, rinse and repeat, do it on time, do it on cost, do it on quality. These changes have opened up some opportunities for us. The graph on the left, I'll give everybody a moment with it, but that is pre-FY '25 and really pre me joining the company a few years back, the company was very concentrated with microencapsulated PCM, and that was being sold in the form of coatings. That was specific to textile coatings, and the textile coatings were mostly in the innerspring mattress market, mostly in North America, and mostly with one major customer. So we had multiple takes at over concentration that we had to work our way out of, and we've made significant strides in opening markets and opening customers and diversifying that mix. So if you look to the right, the changes that we've made recently in mPCM and with our FR technology have opened up a much larger part of the bedding market. So that's now latex, bedding, innerspring, the core market where we had been historically. And really, the most interesting piece is the products that we've readied for significant growth are going into the foam market. And the foam market represents the largest part of the bedding market globally, and it's been the fastest-growing segment for well over a decade now. So the changes you're going to hear about tonight with our microcapsules, with our formulas, the way we manufacture them, the actual technology in the coatings and in the shelves have opened up that foam market. So that's presented significant growth opportunities that we capitalized on in our pipeline. And it's -- just think of it this way, for thermal management products, foam is a very insulated product, very insulated material. Foam beds generally are warmer than innerspring beds, and there's more demand for cooling in that space. So again, the shift has been from mostly focused on textile and a large single customer to multiple customers in foam and global reach in that space. The advancements in FR technology also allowed us to capture new opportunities in the foam space and innerspring -- and that's been -- we've really changed the formulations to future-proof that product. So it has no banned substances in it, no ban hazardous materials. And it's well ahead of the regulatory curve. So it allows customers to use our coating to not only create a better FR barrier and a more secure product that's flame-resistant and safer for consumers, but it's also future-proofing their products from any regulatory shifts that are coming very quickly through U.S. Congress and at the state level, which then gets promulgated at the federal level that are banning a lot of materials that are used in FR and general products altogether. So there's been a significant trend over the last 20 years, and specifically in the last 5 in the U.S. to really remove and ban materials that can cause all sorts of hazards to consumers. We're well ahead of that curve. Then the global trade wars and disputes over tariffs have opened up opportunities for us as well, especially in North America. We make the products here and the larger base is here. And I would showcase in the bedding market that the U.S. and only a few other markets in the world have FR regulations on residential and consumer beds. Many places in the world have FR regulations on institutional beds like hospitals, and universities and military facilities, but very few in private consumer homes. The U.S. does. So it presents the largest market in the private sector for FR barriers and beds. And we've been able to position the company's opportunities for significant growth there. We've also increased our addressable market by region. And the way we've increased our reach is really through improvements in the product, and mostly, that's been in microencapsulated PCM. Again, we don't see quite as many opportunities for FR outside of North America. They are there, but they're mostly in furniture and other home furnishings, and then in institutional applications for textiles. So as we knock down opportunities in North America, we'll turn our sights to those global opportunities, but for now, we'll keep the focus on North America where our best opportunity for success is at our doorstep. But as you can see, our changes in microencapsulated PCM have opened up global markets as well. And really, what that means is we've increased our PCM technologies, basically stability. So thermal stability of the shells has allowed us to increase basically the integrity and strength of the shell. That's allowed us to make more concentrated PCMs. So the products, if you go back to the former slide, the products that go into foam generally have higher amounts of PCM and on higher solid contents. So the improvements we've made to the technology and the shell and also the process of manufacturing allowed us to increase the solids in the formulas by putting dry materials and concentrated wet cake materials, but it's also allowed us to offer those materials in a stable form to folks that are other formulators and other compounders around the world. The other piece is the freight burden on PCM. So shipping a low solid slurry around the world is very difficult because you're -- a lower value product doesn't reach as far and you're shipping a lot of, basically, liquid that has a heavy freight burden on the cost. In concentrating those to cakes and powders, we've been able to reach far corners for the -- with our distribution. We have multiple starts going on now in Asia, Europe and also Australasia. So concentrating those materials has increased the reach. Also offering microencapsulated PCM, that's not in a formula has allowed us to sell PCM capsules to other formulators that may be in those global markets and might enjoy a better position with a customer or a certain market. So we've reached out and created alliances with those companies to basically get speed to market and increase our reach. So the changes to the products that, again, around the thermal stability, the shelf strength, and our ability to concentrate these into cakes and powders has really extended our global reach. And you'll see that as we announce new business in the new year. So a recap of '25. Really, it was all about positioning again. We've been in a very difficult market really since January of 2022 in bedding. And we've had to weather several storms in that market, and we've had a very good investor and shareholder base to support us. And, I believe, they see the future and where we're going. And I couldn't tell you that confidence is -- well, I can tell you, confidence is higher now than it has been since I've been here and where we're going. And, I believe really, it's the narrowed focus. The company when I got here, focused on technical pursuits, really focused on too many things, too. We've created -- the slogan I use here is we've created more focus by focusing on lesser amount of initiatives, and it's really working. We've also repositioned a lot of the technical resources to product improvement and product improvement really in the manufacturing area where we can scale up and make higher volumes of these products. So we've really shed ourselves of working on things that were more bespoke, more niche, smaller markets to bigger pursuits and broader market segments and further global reach. Over the last year, we did retain the supply to most of our North American bedding customers, although that's very depressed. Product and customer diversification has been a real hot button for me since I've been here. So we've made significant progress in diversifying both product portfolio and the customer base in North America. Again, we were very concentrated with a textile-based bedding customer, large brand. Now we're working across most large brands in the top 20 worldwide in textiles and foam bedding products. We also have late-stage opportunities for our new PCM+, the advanced improvements to AlexiCool, DelCool, our thermal management dehumidification substrate and then AlexiShield, our FR coating. And then internationally, new starts happening around the globe. Again, we'll make some announcements in the first few months of '26. We've also spent a significant amount of time over the last few years working with suppliers in those supply chains to bedding. One of the things we were doing in the past was selling mostly to the brands to get them to adopt the technology and then you would have to have a second bite of the apple to go back and convince the component manufacturers that work with those bedding companies to adopt the technology and product and to then add it to their offering to those bedding products and then sell it back to them. So oftentimes, that was a challenge. We've inverted that supply chain in a lot of cases, we would go to a component manufacturer, ask them to run the trials for us, then we'll take the prototypes to the market, show them to the customers. Then we already have the process vetted. We already have a component manufacturer that knows how to do the finishing work. We've done all the thermal testing, or in the case of FR, we've already burned the materials and showed that the FR barrier works. And that has really sped up the sales process and is really a key component of what has allowed us to grow our pipeline to where it is now. So again, that's been on the mPCM manufacturing improvements and the product expansion globally. And then DelCool, we are expecting some new adoptions in the first half of calendar year '26. And we will be in your region as well with that technology soon. And our PCM is being added to beds there that are going to be launched in the first quarter of the calendar year. And then AlexiShield for flame-resistant barriers and bedding, we're offering components right now to major brands in the U.S. Those are in the form of FR socks that are pulled over foam mattresses under the ticking and mattress covers. And they're also open with panels that are laminated into innerspring beds. And we're offering those components to customers to give them essentially an easy button and a speed to adoption. They're cost-effective, domestically sourced, domestically produced barriers. And a lot of those companies are having difficulties right now because of the materials that have been banned from those barriers, and socks have left them in a bit of a bind to find alternatives. So we've worked with component manufacturers to speed up that process to make several prototypes to give to these bedding companies to move straight into mattress burns and prove out the product, along with costing and a detailed supply chain and readiness for the market. So that has opened up significant opportunities, which I believe FR barriers will be the significant growth engine for the company beyond PCM in the next few years. I will say we've passed now multiple bed burns at Right Labs in Atlanta, Georgia. That's an independent testing lab that burns mattresses and test barriers. We had successful 3 tests there. In short, it's a 30-minute test, and they measure the self-extinguishing barriers. They measure the amount of heat generated, and it runs for 30 minutes, and they look for the beds to be able to basically snuff themselves out. And 2 of the 3 tests, they called the test in 3 minutes. Our product was so effective, it didn't run the full 30-minute test. It was completely out, and it had already lost energy and heat. So they called it a day in 3 minutes. And anybody that's interested, we'll put those videos out on the website, but that's going along with our marketing collateral now as we offer these barriers to the market. And then lastly, expansion into adjacent markets. Really, we're not working right now on other products that we're moving into headwear, athletic gear, tactical gear, things you may have heard from us in the past. We put those on the shelf, and we can pick those up down the road, but we really wanted a narrower focus to deliver financial results and get this company scaling up. So we focused it again to mPCM and FR, and that's working for us. So we're now closing late-stage opportunities again globally. So this year and looking ahead, we're going to continue to focus on sales of our enhanced mPCM products to formulators serving the bedding market and also component manufacturers in the bedding markets. We'll continue selling to brands that pull those products through, but really, our target audience is the component manufacturers and formulators that may have a position globally or in North America. They have a better position than Alexium where we have speed to revenue, we can still maintain margins by supporting their business and not competing with them, and we'll sell our microencapsulated PCM to them for them to make their own formulas. And in addition to that, though, we do make our own formulated products, and those go all the way through the component manufacturers to the brands. So that's 2 ways to go to the market. That has increased our addressable market globally and mostly here in the United States where we're concentrated. We will continue marketing our basically our biosourced PCM. It's -- the U.S. market is moving away from that a bit. As you see them add more petroleum-based products, which is foam, which is polyethylene fabrics for mattress covers. Those are not bio to add a bio story is essentially greenwashing. So we don't really push that story much. But there are a lot of companies worldwide that still look for bio-based materials and still are telling a good sustainability story. And they're making natural bedding, making them out of natural latex, natural wool, cotton. So there is a segment for that, and we'll continue our push in that space. AlexiShield for FR barriers and furniture is the largest opportunity in our queue outside of the military. So we're going to continue growing that. And the best way is what I just mentioned a moment ago is through selling components or using those components to demonstrate the technology works, and then we will simply sell the chemistry to whoever the finisher is, but it gives us two ways to go to market. One is faster where we're competing in the textile space with a barrier. And the other is to sell the chemistry to the finishers for large volume placements. AlexiCool for cooling and mattress and pillow applications. Really, the story there is that's the most cost-effective PCM we can offer. So we've opened up opportunities in pillow, top-of-bed toppers, and also lower-cost mattresses for PCM. When we made the improvements to our shelves, we also made improvements in our cost and manufacturing structure, which allowed us to position certain types of coatings for more economic placements. And what we're looking for there is higher volume. And then lastly, we'll continue focusing on Alexiflam for the FR nylon-cotton uniform fabric for the military. I reported in an investor webinar a few months back, but we have now passed the PyroMan at North Carolina State University in North Carolina twice. The first time was in the fall of 2023, in September, when we first had our testing directly with the U.S. military, and we passed the 4-second PyroMan burn. Most recently, also in September of this year, we had 6 submittals as -- on a short list for military consideration, and we had all 6 of the 6 uniforms passed the PyroMan test. We will put those videos on our website as well, but it's quite interesting to watch. It's a mannequin with the uniform that gets hit from 4 sides with flame throwers. There's eight of them. There's two from four sides, and it completely eviscerates this mannequin that has sensors all over it. And what they're looking for is the integrity of the uniform. Does it self-extinguish? They're measuring the mannequin with the sensors to see the body burn, and what they're doing is getting predictive analysis of how a soldier would fare in an environment where there was an explosion or an incendiary or even just a fire. And we've fared quite well. We expect the government is signaling that they're going to put that out for bidding late next year. And we're in laptop testing right now on that fabric that was burned recently in September. And what they're testing now is tear strength, breathability, short-wave and near infrared reflectants, because a lot of the drones and scopes, things used in the military now in advanced war theaters can see infrared, can see reflectants, can see temperature signatures. So we've had to work with the fabric dyers and fabric finishers to make our FR coating work with all the changes that are happening with new technology with drones and bots. And I'm happy to say it's going quite well. The outcome for that would be that the military wants to downselect from a group. Right now, there are 6 companies in the mix, and they want to downselect it for 3. From that 3, what they're reporting is it will go to limited user evaluations. And what that means is they're going to get several thousand yards made and finished, they'll cut and sell uniforms, and they'll be sent to military bases in the U.S., but in Hawaii for a year of limited user evaluation where the soldiers will wear the uniforms, report back in on the aesthetics of them. They'll do more burn testing on them as well. And from there, they're going to put it out to that short list for bidding on the project going forward. So many of you that have been with us a long time, have heard a lot about the work we did with the military. A few years ago, we reported a shift in the strategy on how we're working with the military, where we basically went directly to the military to do the technical development. And then we worked with their existing supply chain of textile manufacturers that produce the camouflage and military pattern fabrics. And we worked within that supply chain to integrate our FR coatings. And that's been the right combination for us. That's moved us closer to success and given us a much higher percentage chance of winning business long term. So I mentioned we're really focusing on scaling manufacturing and our supply chain and getting ready for a significant growth. So we've been successful, and we'll continue securing cost-effective and secure raw material suppliers that are not impacted by global trade disputes and that are ready for sharp volume increases. Again, when the company was more focused in technical pursuits in the past, they were working with smaller scale, more niche materials. We've made significant changes in our raw material supply chain to make sure that anyone that gets used -- any product that gets used in our products. They have scale that they are buffered from trade tariffs and that they're in companies that can come to the U.S. quite friendly over the North American suppliers. And most of our concentration is in North America. And again, we want to future-proof this business and the supply chain so that when we scale, we don't get our feet swept out from under us by a politician arguing over a turf, for instance. We continue to focus on vertical integration of our operations, and this has created significant increases for scale and volume, and we've gained a lot in our efficiency and cost and quality. And again, we're looking to make things on cost, on quality, the first time every time. And that's a shift for this company, and that's more of a manufacturing mindset, and again, getting ready to grow. We're going to continue our efforts to supply base FR products and base mPCM technologies to distributors and compounders. And again, that's to increase speed to market and global reach. And then from those base products, we're offering formulated products to component manufacturers. And generally, those bring larger revenues to larger brands. And then lastly, we're going to focus on world-class service. We need to make Alexium easy to do business with. And again, I don't mean to pick on my technical brothers and sisters, but they weren't very customer and market focused, not because they weren't inclined that way and didn't want to do a good job, but it wasn't their area. They weren't used to pushing products into the market and having to go sell them and having to answer and make it easy for customers to have a nice experience with us and to place orders and get quick turnarounds. So we've spent a lot of time in that area, readying the business for increased volume as well. For the product portfolio, I won't go too deep here. I really do want to showcase though, that AlexiCool is our workhorse. And most of the improvements I talk about with mPCM have been in the AlexiCool area. And in short, what we're able to do now is we used to source paraffin-based microcapsules, melamine shells that we made AlexiCool formulas with. We now are vertically integrated. We produce those shells in-house. So we manufacture from synthesis, from scratch, the AlexiCool shell to formulate the AlexiCool formulas. That also -- those improvements have also allowed us the thermal stability and shelf strength to make highly concentrated wet cakes that go into high-solid formulations, which has opened up foam markets. It also allows us to spray dry the product to make powders. Those powders are infused in gel coatings. They're infused in polyol foams for foam mattresses and pillows, and they're also used in high-solid formulations and foam. Those powders also travel well. So we're able to ship those in bags globally. So it really extended our reach. We're not shipping any water. You're getting more weight on the freight. And again, it allows the product to essentially circle the globe from a geographic reach. So nice improvements there that have opened up large opportunities. And the key takeaway is the foam market. That's the larger piece of the bedding market globally now and the fastest-growing segment. For BioCool, we'll continue pushing that, as I said, and that's a workhorse for us. We do still sell quite a bit of it in North America, but we are seeing those customers shift more to AlexiCool and the paraffin melamine shells and shift more to cost-effective and higher volume products, and again, namely in foam. And then lastly, the reason I would put mPCM here is we're selling the microcapsules now to the formulators and distributors. And again, those are the slurries, wet cakes and powders, and that's opened up new opportunities where we're not trying to claw back long-range, hard-fought timely efforts to win a space in those markets. We're able to offer that mPCM to people who produced the coatings and have a position now, and get our sales and margins that way. So that's really sped up speed to market, and again, increased our addressable market. For FR products, Alexiflam generally is around the military update I just gave. Once we're successful with the military, we do want to use that as a marketing and calling to start going after more opportunities. And it's already a viable product for workwear, but this is a small company. And until results come where we can self-sustain and finance the growth to go after workwear, we have that on the shelf, but it's a very natural evolution for Alexiflam for us to go into workwear. And it's very simple. That product is wash durable, and workwear generally goes through industrial laundering, much like military gear does. And it's a natural market to move to, but until we have scale with the military and have delivered success there, we're not going to move to that space. We'll move there soon. And again, natural evolution because it's an existing technology and existing product, proven in a very difficult space, moving to an adjacent market. Alexiguard remains one of our workhorse FRs. It was really on the shelf up until about 2 years ago, we're now back to marketing again. We've added a professional to our sales team, very, very seasoned in selling FR coatings, especially into textiles for furniture and bedding and automotive applications. So she's now pushing Alexiguard into the market where we really didn't have much sales energy around it in the past. And we're starting to get significant interest there. The difference between Alexiguard and AlexiShield is Alexiguard still contains organophosphorus, which is a highly effective additive to FR coatings, but it's now been banned in a few states in America and which means likely in the next few years, it will be banned in all states than federally in the use in bedding in a few furniture applications, only a few, namely sofas. So Alexiguard still has a wide market and has a very good play there. It also has double duty as a nice softener for textiles. Then lastly, AlexiShield is what we adapted Alexiguard to become, and it's free of organophosphorus along with any other banned substances like PFAS and other halogens, antimony, fiberglass, any toxic or hazardous species that were being put in FR in the past. AlexiShield is future-proof from those banned materials. And it represents outside of military, our largest opportunities for growth. I'll tell you, we are creating a position in mPCM where we can have a very strong position as a producer and formulator and supplier. And that's a very small niche market, but this company is very concentrated there, and we believe we can deliver financial success on those products very soon within the next year. But in addition to that, we believe FR is much larger, and we wouldn't be happy with the size of the company just on PCM. We really want this company to grow dramatically and get bigger and very profitable. And we believe the big driver behind that will be FR products. So in summary, we do remain at an inflection point, and we believe we're tipping in the new calendar year, and we are expecting significant growth. We have some exciting announcements that are going to be made over the coming 2 months. I wish I could tell you now, but we're not allowed to talk until they're done. So -- but I can signal to you, please stay tuned over the next few months, a lot of exciting things coming. So again, in summary, for mPCM, we were historically textile-centered, now positioned for foam, greater market opportunity. That's driving growth despite the soft conditions. We are seeing some life in the U.S. bedding market, though, I would tell you, this last quarter, we're seeing an uptick in demand. You're seeing some consumer sentiment start to become more positive. People are starting to loosen the purse strings. So there's some early indications that 2026 could mark a recovery in that retail space that impacts bedding for us. PCM market is ripe for consolidation. So our piece of that consolidation is to work with formulators and other players in the market to get there faster and to reach further. And then new overseas products are going to bring meaningful volumes. And again, some announcements coming as early as January on that. And then for the FR in the private sector, that's mostly in furniture and bedding for this time. We do long term. We want to move into automotive and also transportation, automotive being private automobiles, and then transportation being rails, boats and airplanes used for moving mass transit and for freight. There are FR coatings and materials used in those vehicles and boats, but the trends are a big clamp down on regulatory and banned substances, and that's very favorable for us. We're also well-positioned to commercialize our FR. We've got the sales capability in place now for such a small company to make a big splash in our little corner of the market. Our business pipeline has a lot of advanced opportunities for significant growth. I know you guys have heard that a lot from us, and we've spent a lot of time and energy over the last year or 2 getting it ready. It now is evident. It's on us. The inflection point is now the results follow, and we start to trend and grow from here. So again, I would just encourage you to give us a couple of months. We're going to make some exciting announcements, and then you'll see the trend reverse. Then lastly, better positioned with the military than we've ever been. No guarantees on that because it's public business, it's subject to bids. There are politics involved, but I can tell you, we've positioned the company much closer to the decision makers. We're doing the testing directly with the military. They've actually granted us testing money to support the testing work we're doing. So we're on the radar. They know who we are. They like the product. And one of the keys there is the product works with a lot of different textile producers. So we're not pigeonhole to just one supply chain. We work across the whole spectrum. So we really position that for growth and adoption as well. With that, I'll turn it back over -- actually, I'll turn it over to Lisa Hubka here. She'll give a brief summary of the FY '25 results. And then from there, we'll turn it back to our Chairman, Simon Moore. So, Lisa?

Thank you, Billy, and thank you to everyone for being with us today. Since you've all had a chance already to look at our FY '25 annual report, I'll just focus on a few key takeaways from our financials and what they mean for the year ahead. For revenue, we finished FY '25 at $3.9 million in revenue versus $5.9 million in FY '24. So while the top line doesn't yet reflect the strong and expanding commercial activity underway, the foundation we've built this year positions us well. As Billy noted earlier, we have several compelling near-term opportunities that are tracking toward closure as we move into the second half of FY '26, giving us a lot of confidence in the trajectory ahead. For gross margin, that remains a major strength of the company at 43.1% for FY '25, only slightly lower than FY '24's 44.8%. This modest shift is due primarily just to customer and product mix, but the important story here is that with the vertical integration initiatives we've completed this year, already enabling improved cost efficiency and product quality, and so we expect that to lift margins further on existing products and enhance our competitiveness as we scale. And with margins at this level, increased volume has a meaningful impact on profitability. For operating expenses, we held those steady at $4.3 million in total, which is consistent with the prior year, despite a tight labor market and inflationary pressures. We made a strategic decision in FY '25 to maintain our R&D investment at $0.8 million, so we could deliver the product enhancements and manufacturing integration necessary to support both revenue growth and diversification. These investments were critical to expanding and diversifying revenue as well as reducing long-term costs. And as we transition in FY '26, we did begin implementing some targeted cost reduction initiatives, but because our cost structure contains a significant portion of fixed costs, those actions do take a bit of time to flow through the system. So we expect to see the most meaningful benefit from these initiatives in the second half of FY '26. Earnings before interest, taxes, depreciation and amortization, EBITDA, was a loss of $2.6 million, which was driven by the lower sales volume. But again, with our strengthened margin profile, our cost improvements that are underway, and a commercial pipeline that is maturing quickly, we believe we are well positioned to improve EBITDA performance as revenue builds. Another important thing to note is that our interest costs were significantly lower in FY '25 by $0.9 million due to the capital raise and refinancing transaction in FY '24, in which our debt was converted to equity. This expense reduction helped to offset the additional loss at the EBITDA level. Our cash decreased by $1.4 million, along with a modest increase in the line of credit balance. This was due to the reduced sales and fixed operating costs. For our line of credit, at the beginning of the fiscal year, we were able to renegotiate the terms to reduce the interest rate and the fixed cost. But then in July '25, Alterna made -- who is our financing company for our line of credit, they made a strategic change to their lending approach and elected to discontinue the inventory-backed portion of our facility. It's important to note that this had nothing to do with Alexium's performance or anything. It was a lending strategy decision on their part. And while the maximum facility remains unchanged on the line of credit, this revision has reduced the company's practical access to funding under line of credit because the borrowing base is now solely dependent on accounts receivable. Following the capital raise in FY '24, the company eliminated its debt. So you can see that our debt was 0 at the end of FY '24. However, with FY '25's lower sales and reduced availability on the line of credit, we sought shareholder support to ensure continuity of operations and momentum, which we received, and that support is reflected in the $1.6 million in borrowings at the end of FY '25. That is really all that I have for our financials, and I'll turn it back over to Simon to close the meeting.

Thank you very much, Lisa, and thank you, Billy, also for the comprehensive business update and review. As Billy mentioned, the '25 year was, on a financial results basis, disappointing relative to what we had expected going into the year. On a strategic and a business development sense, it has been a year of significant progress. And the last piece of the puzzle, which is sadly often the way is the results of the final piece to fall into place. We feel that we're making significant progress on that front and that as we move into the second half of the '26 financial year, those progress steps that we've been making will become more apparent to people in the actual numbers. As Billy flagged, we anticipate that there will be some interesting developments over the course of the next quarter, and we look forward to bringing those to you. Billy will be in Australia in February, meeting with customers. And should there be interest on people who are investors or shareholders in catching up with Billy or prospective investors, we'd be happy to organize some time for him to get together with people. Thank you again for attending today's meeting, and thank you again for your continued support. It is appreciated by both the Board and by management. Thank you.

Thank you.

Thank you.