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

Good morning, everyone, and welcome to the 2021 Annual General Meeting of Alexium International Group Limited. My name is Rosheen Garnon. I'm a non-Executive Director and the Chair of Alexium, and I will be chairing our meeting today. Due to the COVID-19 pandemic and resultant public health concerns, as we did last year, this year's meeting is being delivered live via a webcast. Every effort has been made to ensure that this meeting runs smoothly for our shareholders. If we experience any technical issues today, a short research -- sorry, a short recess or an adjournment may be required depending on the number of shareholders affected. If this occurs, I will advise you accordingly. So let me turn to the quorum. There being a quorum present, I declare the meeting to be properly constituted and declare the meeting open. I would like to introduce my fellow directors who are on the call today. We have Stephen Cheney, Simon Moore, Paul Stenson, Carl Dennis, and last but not least, Rob Brookins, our Director and CEO. I would also like to introduce to you Jason Lewis, our CFO; and Chris Crawford, who is our Vice President of Sales and Marketing. We also have an attendant Sandra Macintosh from Mertons Corporate Services, who represents our company's Secretary. Matthew Leivesley of Grant Thornton, the company's auditor is also present. And finally, Automic, our share registry is represented by Jonathan Cooper. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will be opening voting for all resolutions before the formal business. In order to vote at this meeting, you need to have registered your shareholding with Automic. If you haven't already done so, you can follow the instructions on the screen to register and log in to enable you to vote at this meeting. I would like to highlight that where undirected proxies have been given in favor of the chair, I will be voting those proxies in favor of all resolutions being put to the meeting today. Shareholders may also have voted at this meeting by completing and lodging their proxy form online. [Operator Instructions] Please start your question by typing in your shareholder, SRN or HIN. [Operator Instructions] Please also note that your questions may be moderated or if we receive multiple questions on 1 topic, amalgamated together. Due to time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course via e-mail or posting responses on our website. [Operator Instructions]. I will either deal with a question personally or as someone who is better placed to respond. [Operator Instructions] The notice of meeting was made available to all registered members on the 15th of October 2021. And with your agreement, I will take it as read. In terms of voting exclusions, all resolutions except Resolution 2 and 3 are subject to a number of voting exclusions, which are detailed in the notice of meeting. Should anyone wish to review them. The exclusions will be dealt with as part of the poll. I'll now turn to ordinary business. And I want to say a couple of words to start off with. I just want to reflect on the last year. And Bob will cover this off when he speaks at the conclusion of this session. But it's been an interesting year with COVID. We have had a good year in terms of 20% revenue growth, strong cost and cash management and also the growth of our platforms. The success of BioCool and our commercialization of Eclipsys. We have the new sales and marketing team and Chris is on Board today, and we're poised for growth. Growth based on robust technology capable of being commercialized quickly and our entry into adjacent markets, and we'll talk more about body armor. So I want to take a moment just to thank all our shareholders for your support throughout the year. We regularly communicate with you, and we really appreciate everything that you bring to the table. Finally, I just want to raise 1 matter in relation to 1 of the allocations of performance rights that you would have seen just recently that went out the notification on the ASX. These performance rights relate to the 2019 year and the 2020 year. And in that regard, I'd refer you to Page 39 of our annual report. Those performance rights were actually issued in the relevant years. And just recently, we were to issue the shares because those performance rights have now vested. Unfortunately, with a changing team member at our company's secretary and some COVID impacts, that did not go as we would have liked. And so what's happened is we have issued performance rights rather than the shares. I wanted to be transparent about this because what you will now see happen in the next few days, is that we will cancel those performance rights and we will issue the shares. But as I mentioned, Page 39 of the annual report actually shows the vesting of those performance rights. And so we will rectify that particular issue. And the purpose of this is to raise it with everyone. We've just found it and realized what's happened. And so we wanted to share that with you. So with that, what I'd like to do now is turn to the ordinary business of the meeting. And the meeting has been called for the purpose of considering and, if thought fit, passing the resolutions as detailed in the notice of meeting. I now declare voting open on all items of the business. You can submit your votes at any time. I will give you a warning before I move to close voting. As previously stated, all resolutions today will be decided by a poll. So let me turn to the financial statements and reports. The first item of business is to receive and consider the annual financial report of the company for the financial year ended 30 June 2021, 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 financial statements and reports?

There are no questions, Chair.

Thank you. There being no questions, we come to the items of business for which your vote is required. Resolution 1 relates to adoption of the remuneration report. 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?

There are no questions, Chair.

As there are no questions or comments, I now put the resolution to a vote. We will now move on to the next resolution. Resolution 2 relates to the reelection of Director General, Stephen Cheney and I will request Stephen to talk to his reelection.

Rosheen, thank you. And I must express that I'm delighted to be on the board. I've been with Alexium for several years now. As you've seen from my biography, I was a career marine, pretty much experienced in wearing uniforms and body armor. And as you can tell, and you will hear today that we are getting into the body armor business of coatings and with great success. This has been a phenomenal year for us. We've got the right team in place. It's taken us a while to get there, but we're on the move. We're profitable. I couldn't be more delighted with how things were operating down in Greer. And I must thank our shareholders for your support because now you are seeing the result. Thank you, Rosheen.

Thank you, Stephen. 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 2?

There are no questions, Chair.

As there are actions or comments, I now put the resolution 2 a vote. We will now move on to the next resolution. So Resolution 3 relates to the election of Carl Dennis. I'll now ask Carl to talk to his election.

Thanks, Rosheen, and good morning, everyone. I come out of the pharmaceutical and cosmeceutical industry in roles that relate to business development, the commercial side of the business and some CEO role. So I understand a bit about Bob's side of the desk from our previous days. Operate specialty regions, Middle East, Asia, Africa. They've done a lot of work in the U.S. and the U.K. and Australia. Last 5 years I have seen we're looking at territories that we call a bit untapped in terms of Western markets. So we've got some good expertise in Middle East, Africa, Asia. Specialty route to market strategy and execution. I'm a person who takes a business that's already in expansion phase. I'm a growth guy, and probably not great at the early stages of the inception, but I'm pretty reasonable at growth stage of the business. And I'm really fortunate because I've worked with Bob, Rosheen and Stephen before in our previous capacity, and I look forward to working with them again.

Thanks, Carl. The results of the proxy voting are as shown on -- sorry, on the slide now being presented to the meeting. Are there any questions or comments in relation to resolution 3.

There are no questions, Chair.

Thank you. As there are no questions or comments, I now put the resolution to a vote. We will now move on to the next resolution. Resolution 4 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 4.

There are no questions, Chair.

As there are no questions or comments, I now put the resolution to a vote, we will move on to the next resolution, which is Resolution 5 relating to the grant of 2021 financial year share appreciation rights to a related party being Dr. Bob Brookins. 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 time.

There are no questions, Chair.

As there are no questions or comments, I now put the resolution to a vote. We will now move on to the next resolution, which is resolution 6, which relates to the issue of shares under a salary sacrifice arrangement to one of our nonexecutive directors, Carl Dennis. 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.

There are many questions, Chair.

As there are no questions or comments, I now put the resolution to a vote. We will now move on to the next resolution, which is Resolution 7, which relates to the approval of a 10% placement facility. 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.

There are many questions here.

As there are no questions or comments, I now put the resolution to a vote. We will now move on -- so that concludes the resolutions. And we now move to the formalization of the poll process. So that does conclude the formal process of the meeting or the formal business of the meeting. In a couple of minutes, I will close the voting system. Please ensure that you have cast your vote on all resolutions. I will now pause to allow you time to finish those votes. I will now close the polls. When the voting has been collated, the results will be declared on each resolution and released on the announcement platform of the Australian Stock Exchange. So with that, I will bring the meeting to a close. Thank you, ladies and gentlemen. That is the conclusion of the formal part of the meeting. I will now formally declare the meeting closed. Having gone through the formal part, as I mentioned to you, we would like to share with you some updates in terms of the business. And so I'm going to ask Bob Brookins, our CEO, to make a presentation to you. So thank you.

Thank you, Rosheen. I appreciate everyone joining us today. I just want to give you a brief update on Alexium is as long as with a general overview of our commercial activities. [ Sushma ] next slide, please. And I believe 1 more after that. There you go. So just to give a brief overview for anyone who is new to Alexium. While we are listed on the Australian Stock Exchange, we are -- all of our operations are based here in Greer, South Carolina, United States. We are an advanced materials provider of proprietary technologies for flame retardant and thermal management applications. They give you a little better understanding of what we mean by thermal management, really talking about how we can use our technology to either provide a cooling performance or reduced thermal stress that a person might experience by using -- laying in a bed, using body armor and other applications, we'll be talking about here. We are a technology leader in textile foam-based products and by foam, meaning like a polyurethane foam as might be used in a mattress with a focus on U.S. consumer and military markets. A major market for Alexium at this time is bedding. But as you'll see over this presentation, expanding into adjacent markets is definitely a focus for the team now. We really are -- the work we do is directed toward development of patented and patent-pending technologies. We're really targeting to address key market gaps and to meet customer needs. That focus in this area has really been essential to the focus that you now see in the management team and the Board and what we're doing and really understanding how we best differentiate ourselves in the market. Essential to that has been the sales and marketing strategy, which we developed which is really about working with customers in a consultative way so that we can help them understand how Alexium products can improve their value proposition in marketing claims. The way I tend to think about it as our team is working with customers, it's really about helping our customers understand what type of aggressive marketing claims they can make and then how we can use our IP-based products as well as analytics to help support those strong marketing claims and as they climb out on the limb we make sure it doesn't crack underneath them. We'll make sure that it's really a robust claim that they can stand behind. Those 3 elements are really what have been essential for the commercial success that Alexium has seen over the past 18 months. Next slide, please. Now when I came in as CEO about 3 years ago, we actually had an initial set of approximately 3 products, and I don't mean 3 platforms actually mean 3 discrete products one for the work we're doing for Pegasus and then 2, going into what we do for mattresses. And since that time, we've been able to significantly expand the product portfolio that we have and now is 5 platforms with -- as you see here on the right, on the presentation with dozens of products that are spread across these. Now 2 of these are flame retardant applications, which you see Alexiflam, Alexiguard. Hopefully, this update in branding has not been too jarring for anyone just as a bit of a Rosetta stone. Alexiflam is what we formally branded as Alexiflam NF and Alexiguard is now what we formally brand it as Alexiflam FR, which we use for our FR NyCo applications. So over the past year, we've been able to expand the portfolio significantly with 2 new platforms that have been launched. We have our BioCool product, which is our proprietary bio-based cooling product, which we use for both textiles and foam. This has been a big -- really significant success for Alexium over the past 6 months and will continue to be so going through the current fiscal year, which we'll talk about a bit more. We also have, as I believe we spoke about a moment ago, the Eclipsys technology, which is a new perpetual cooling technology and really been essential for our movement into some adjacent markets such as body armor. Now there we have -- this has helped to open up a range of addressable markets, which we're now targeting across these platforms, which I've got it conveniently labeled by this color code. Hopefully, you can translate up to the platforms here. Bear in mind, these are the addressable U.S. market values, and this is talking about the total market. And exactly what is attainable for a given market really is going to be dependent on just how those products are adopted in those industries. Just as a point of reference, if you have something like a mattress on top of bed, you're never going to see 100% acquisitions. That market is a much more -- we have wide range of competitors. We're fighting for market share, although the innovations we bring definitely have positioned us to get a -- to be a leader in that market. But when you get into the other areas where you're talking about a protective gear such as military uniforms and body armor. It really depends on just what the adoption of those products look like because you were talking about new products going into new markets. So we had 1 of our shareholders ask a question about just how accessible is that body armor segment. Frankly, that's something we're learning. I can tell you that based on -- we can talk about this further in a moment. But based on the rate of adoption, based on the interest we're seeing by those -- by people in that market we really see that as a significant opportunity in place where we can get a significant market share. And time will tell just how much we can use both pull from the market as well as the safety value that we bring there as a driver for increasing our market share. Next slide, please. So we have had our annual report released obviously back a few months ago. Really just want to have -- take a moment to look back at FY 2021. We covered a bit of this in our last investor presentation, which is mid-September. So I'll move to this relatively quickly. Just do want to touch on a few key points. Obviously, we had increased revenue in 2021 of 20%. I think this was -- we were quite happy with this level of revenue growth, which was given the complications that we were dealing with during COVID, this really showed some strong organic growth among our existing customers as well as new customers. Now in that period, we also have some of the ramp-up of our new customers to BioCool in our total mattress cooling system program, and we're just now really seeing the full weight of those benefits. Now we also, as we have addressed here, 2021 was our first full year, where we were no longer under the previous debt facility, which was a significant drain on cash. And we really thought the full year benefit of that, which you can see here in these numbers. If you'll go to the next slide. So this just shows you some of the trends in what we've seen in our financials over the past, say, 3 years, over on a half year basis. You can see in terms of revenue, obviously, we've had some strong customer demand in the -- beginning in 2021. And really our -- as we'll talk about here in a moment, we are seeing that even ramp up much more so in the half year that we're presently in. Now with all that growth that we've been able to drive there. Notably, kudos to Jason and his team been able to help keep operating expenses down, which has also allowed us to continue to improve on EBITDA and which we'll speak to here in a moment to address one of our shareholders' questions. If you'll go to the next slide, please Sush. This is my favorite slide, should absolutely be everyone else's as well. This really is showing the technical and sales strategy really coming to fruition here. COVID has really been a burden on us working with customers on new products is really challenging when they're just fighting to maintain their own current business. But things have gotten much easier here in the U.S., which obviously where our customers based out of and really been able to finally get some key programs up and going. And we've seen a significant improvement in revenue over the past 6 months period, that transitioned from May to June. There really have been 2 main drivers for this improvement in sales. We have our BioCool products, which are now fully commercialized. And as we mentioned in a release earlier in the calendar year, has really been -- has now become one of our workhorse products that we -- is one of the major product that we now sell. We also have our total mattress cooling system work that we've done, and this has been really a driver of new cells and is going to be the paradigm from which we'll be working from new technologies such as Eclipsys. We're really not focused in talking to the customer about, I'm just going to sell you this, say, BioCool product or Alexicool product, although there's a place for that. But given the level of technical innovations that we have and the insights we can bring with our analytics, we can work with the customers on a full mattress design that is allowing them to make some much more aggressive market claims and obviously helps improve the amount of revenue we can see on a per unit basis there of mattresses. So this is really just our -- I think, a really clear indicator of the success of this model, and we'll continue to go forward with this. Next slide, please. Now obviously, with the increase in revenue, everyone's going to understand exactly what are going to be those last remaining steps that take us to positive EBITDA and cash flow positive. I can tell you with absolute certainty, these are the 3 platforms that are going to be the drivers there, okay? Just to go through this a bit. BioCool Obviously, a lot of the work that we've seen increase in revenue that you've seen to date has been in the mattress area. We will continue to grow there. We have programs that Chris and his team have already won and waiting for them to ramp up in the coming months, and you'll see that as a continued growth of sales for us. Also top a bit, this is a -- is going to be a -- we've got much less -- much fewer sales in that area now, but his team is working actively there. And that is another place where we'll see increased sales in the fiscal year. Obviously, where we are now, we have customers who are already fully qualified and basically are just preparing for commercialization on their side as they're doing their marketing work. Customers who are evaluating the current products, but further, we still have ongoing product development work going on in our side. There are other opportunities in these markets that with some adaptations of what we're currently doing with our BioCool product, we can still get a greater market share. So obviously, we've got our team here in Greer working actively in that area. Now Eclipsys is, as we've said now, is going to be 1 of the larger areas of growth for Alexium, while other people have technologies like PCM, Eclipsys is really a unique technology, which allows for a whole new classes of marketing claims. Now with the -- 2 key areas that we're focused on right now are mattress and body armor, which we'll go into a few more details around body armor here in just a bit. But for both of these programs, we now have qualified customers who are preparing for commercialization. What I mean by that is they've done their testing, they bought into the technology. Now it's just about how they integrate those products into their product lines. We also have additional customers who are now -- just now evaluating and getting an understanding of how they can integrate it to what they do. Top a bit, I think there is also an application, although I'll say it has been less of a focus for us just basically on a resource demand basis. Lastly, Alexiflam, which is the product we use for our Mattress FR sock. This, as I've mentioned in previous 4Cs, has been an area that has been most sluggish due to the impact of COVID and just having to -- how we get chemistry from here to there and also samples for testing back and forth. The mattress FR sock is a more complicated supply chain than what you have with these other programs. So it's just -- it's been impacted more by these global issues. But we've now worked through most of that, and we have people who are launching Alexiflam-based socks here in FY '22. And so working with them and supporting their commercialization efforts there. So these will be the main 3 -- these will be the 3 areas that we expect to see revenue from and further revenue growth in fiscal year '22. Next slide, please. This is a slide that you may recognize from our annual report presentation. This is just to give you a bit of context in terms of what's going to be the timing for these items. In the first half of the year, I already spoke about the middle item there where major customers fully commercialize our total mattress cooling system. That's fully completed and done and we're seeing the benefits of that now. In terms of Eclipsys technology going to body armor. That work has been done, and we're working with our customer now to get them fully commercialized here in the coming weeks. And also we're completing our work on FR NyCo, which is work we've done as we've discussed before on all goods basis, and we should have all of that work done here by Christmas to be in front of key people in the military side for them to do their evaluation. All these programs are moving along according to plan, and we're looking forward to success there. Now looking as to what we can see in the second half of the year. These are the 3 areas that I just mentioned before. And all these are about revenue drivers that we'll see there. Broader market penetration of BioCool products, frankly, that's ongoing now, but is -- we'll continue to see additional growth in those markets. Also, the FR sock and Eclipsys technology being fully commercialized in the bedding market. Next slide, please. Something that I think about Carl, Rosheen, Stephen, Jason and I, we've been here for some time and been working to get Alexium in position to where it is. And it's been about getting the right people in place, about getting the product portfolio where you need. And I understand people want to understand just when you can get there, when do we be EBITDA positive? When will we be cash flow positive? And I think what I really want shareholders to understand is we are living that transition now. Look at that chart, I showed a moment ago, that transition from A to June. That growth is continuing. We're living this fiscal year and moving forward in the coming quarters. It is -- and a lot of this is these are things that we've already completed and we're seeing the benefits of. As I said, a total mattress cooling system, BioCool increased sales in the foam and also the body armor work that we've done. All of these are driving increased revenue. We also have, along with that improved margins. I know for shareholders who follow our force closely and discussions we have there. It is -- this is something that we are beginning to really be able to drive in a significant way. Some of that is just driven by economies of scale. We're also for some of our new product lines, able to provide stronger margins because of how we're building the supply chain and how we're able to take these products to market. So it's not just simply growth driven through a revenue increase. Additionally, as we're going to the stage of growth, look at the -- take you to the previous slide, you can see that we've been able to keep our operating expenses at a -- quite level at a time where we're still growing the revenue. This is obviously the value of our contract manufacturing model. The Board and management fully believe this is an essential aspect of what we do, not simply for the fact of how it allows us to manage working capital, but it really applies -- it really allows the flexibility for us to develop technologies like an Eclipsys going into body armor. But with this contract manufacturing model, we can move in a nimble way and help respond to the market needs and our -- and the innovations that we have and do that in a really fast responsible way. And that's really something that we consider essential to how Alexium operates and something we'll continue to do. This also has the benefit of -- we do have -- because you don't have that drain on working capital, really, anything that we're having at this point is just a matter of supporting the growth that we have in front of us. I want to clarify for everyone, we do have adequate cash resources to get what we need through fiscal year '22, which will get us to profitability and will allow us to really get this company going in the right direction. Obviously, Jason and his team are working diligently as we go through ramp-up process with some of these larger customers to do everything you can to manage working capital, but we feel very well positioned to handle our needs there. So I think everyone can see that after a lot of work on our side, really getting the company in the right place and hope to see that we're delivering on the vision of what we laid out here. It really is set up to be an exciting year in 2022. We'll have a lot of exciting updates for -- about other successes we're finding there. I believe Sushma, if you'll go on the slide, I believe that's everything. So with that, Rosheen, I think I'll hand it back over to you, and then we can do a Q&A session.

Thanks, Bob. And we do have a few questions. And I think Bob some of this we will have covered through the slides, but I'll just work through the questions for you. And I think these specific questions will go to you, Bob. So just giving you a heads up. So we're talking about the first sales time line for Eclipsys in body armor, which you've already addressed in that second last slide. And also expected revenue and we've got the addressable market information earlier in the slides. Is there anything else you'd like to comment on there?

I did touch on a bit of that. So actually, I think what I'll do is hand it over to Chris. Chris, do you want -- anything that you think I missed or any points you'd like to clarify on that. Chris, you are on mute.

There we go. Yes. We're working really hard with a singular commercial partner that is helping us bring the product to market as the first adopter. We're working through their marketing plan now, hoping to be on their website by the end of this month. And they just bought the first few smaller role of Eclipsys to incorporate in a variety of their product lines. And we do expect this to go pretty big as soon as they can go commercial into the market and us get into other outlets, both on the law enforcement side, but even the military side.

And so just in terms of that, I think we will provide an update to everyone when the customer is ready to go live with it so that you can see exactly when that sales process is starting. The next question -- the next question is the time line to revenue with Alexium FR sock and also our addressable market. I think we'll pick those up in the presentation as well. And just to say, we will put the presentation up on the ASX platform and also on our website, so everyone can see it. But Chris, is there any comments that you'd make about how FR sock is going?

It's going really well. And we're currently in bed testing with one of the major bed manufacturers, and that should be completed by the end of December. And their hope is to be fully scaled to production by June of 2022, which means we would see revenue somewhere within the first half of calendar year 2022.

It's moving along well. And Bob, the next question is definitely for you, and everyone is interested in this one, which is the expected time line to positive EBITDA.

Yes. I think that obviously, we're in a position where we can't provide guidance on this. But with the level of revenue growth that we're seeing and not just with existing business, but with new business that is coming online. It really is just a matter of say in the very near term in coming months that we'll get there. We are -- we're at that moment as a company where you have 1 month cash EBITDA positive next month did EBITDA negative. And we're having some discussions on when we actually want to give a fair -- a good clarification of a number of months that are in sequence, where we've been successful there. But we really are here at the cusp of that and it's just a matter of getting a few more pieces in line. I don't want to obviously prognosticate on the exact month, but the -- based on level of sales we have now, we are really at the cusp of it currently.

And next question is reverting back to Eclipsys. And so Chris, just in terms of the expected time line to enter other areas. So thinking about adjacent market, shoes, et cetera. Just where we have been.

Yes. So this week is being spent on interviews for a BD position in the company and that BD person, this is their main role is to go into the adjacent markets and create market space for our products and Eclipsys will be the main concentration of those efforts for the next 12 months. And immediately, it would be body armor and probably helmets. Shoes is a little more difficult because of the supply chain and where they're located as most people know, most shoes are made in Vietnam. So it's a little less accessible than the other markets for us. But definitely body armor and helmets will be happening pretty quickly.

And there's a question -- an additional question, which is are we working with only 1 body armor client at this point?

I did see that. We are concentrating on 1 client for field testing, and that 1 client has asked to work with us in the field with the major clients within North America. And we're trying to scope out what does that mean commercially for us and for the market. There are 3 major manufacturers in the U.S. And this 1 commercial client has ends at all 3 of those and could lower the time line. But with the BD position coming on, we may decide to go at it ourselves and kind of cut out the middleman. We're still scoping out what that means. And we'll have an idea within the next 4 weeks, what that will look like.

Yes. I just want to jump in there. One thing that we get a lot of questions from people when are you going to take PCM to furniture, when you're going to take PCM into medical gear. And these are all things -- items that we talk about. But I think the 1 thing I would hope the shareholders appreciate is that we are 100% focused on executing to the strategy right immediately in front of us. If we get through the milestones that I've laid out in that presentation, everyone is going to be thrilled about where the company is. And we're really at a point now it's about the quality of the decisions we make and the focus we have in the right areas. And we absolutely will go into these markets, but realize that as a low 20s in terms of staff count, it's -- we can't do everything. And our focus is just really making sure that the strategies that we've laid out here for shareholders and given how imminent these opportunities are. It's just a matter of just supporting the -- at this stage, it's about supporting the customers through their commercial process. It's not about getting them to buy into the technology. That work has already been done. But it's about that the more project management side of Chris and his team needs to do. And once we get it there, cash flow positive, EBITDA positive and based on -- from the perspective of where we were, the world is our oyster. But there's -- obviously, there's a lot more growth ahead of Alexium beyond what we just have laid out in terms of the strategy that we showed in the presentation.

Thank you. And just in terms of -- I got a question about the FR testing of military uniforms. And so Chris, can you just sort of give us a quick overview of how we move into that testing phase and what they're likely to do as part of the testing phase.

Chris, do you want to handle that? Or do you want me to take that? Obviously, I can probably...

I will preface it and then throw it over to you.

That works, that works.

The way we understand this process is as soon as we finish with all of our internal work of proof of concept is to take basically a finished product to the military purchasing group and try to get them to put this into their testing phase and that testing phase from what I understand is fairly lengthy 18 to 24 months. And that will be done in -- there's a terminology for it, and it's a limited scope uniform, but I'm going to pass it to Bob because that's about where my knowledge ends.

Yes, the 18 to 24 months will be the full cycle, which would include the wear trial. The initial work, I'll say, the very initial phase would just be working from the product on a roll goods basis. And then they do basically do Jeff, a full battery of textile testing. It could be tear strength, it will be obviously FR performance, wash durability. There are published specifications of what a nylon cotton fabric should look like and also what a flame retardant fabric should look like. And they'll put that to those specifications and through the battery specifications that are required for that. And then based on how it qualifies there, then they'll move on to the next step, which would be a scale-up of the fabric to do some more of a garment scale testing and then a full wear trial, as we talked about before. The focus for us is on the marine simply due to the -- their speed and adoption of technology. Also, we got the support of Stephen, which is great to have as well.

So the next question, just in relation to FR sock. Just in terms of the adoption of this, can you talk a little bit, Chris, about how we're taking this out to customers. We're just dealing with 1 customer, we've got multiple. How does that look?

It will speak more broadly to our entire strategy is that we approach every bedding manufacturer that we can get into -- many people on the call probably know our major customer, but we have approached pretty much the top 20 bedding manufacturers within North America with the idea of bringing this FR cotton stock to market. We have yet to run into 1 customer that wasn't super interested. We have dispersed 12 finished stocks, 6 to our major customer and the others have gone out to more minor customers. The other larger manufacturer is taking in socks as soon as we can have them made where Jonas Larue, our Innovation Manager, is arranging for 24 socks, additional socks to be made to be sent out to the customers that have yet to get them. So this is a broad-based strategy, not just a customer strategy.

Chris, if I -- Rosheen, if I could step in real quick. I'll make a dialogue [indiscernible], but there obviously is a market trend going on in bedding in the market more broadly for eco-conscious bio-based materials, and it is definitely a trend we're seeing in terms of the ability to bring a cotton-based sock, and the fact that our BioCool product is USDA bio preferred, would you kind of help shareholders understand what is that trend that we're seeing in the market and how that can play in our favor in terms of adoption of our products.

Is that to me or Rosheen?

That was to you. No, that was absolutely to you.

I am sorry, I thought you were talking to Rosheen. Sorry to the audience. Yes. The more natural approach is becoming very largely accepted in the market. We've seen it with the growth of our BioCool products. We had a customer meeting yesterday where upon learning that not only do we have our BioCool line of products that we may actually have a dry version that they could infuse into a pillow in a natural sense really set the guy's innovation mind spinning. Couple that with the Eclipsys coming to market, which is a less of a chemical approach to cooling and with our FR sock, there are customers that believe they can now bring a very natural type of product to market from top to bottom. There is a method now to use bio prepared polyols to combine those bio-polyols with isocyanate now make a hybrid natural home bed coupled with an FR cotton sock and BioCool technology, many customers that are going that route feel like they've got a unique offering to the market. And -- but even the traditional customers that are doing just normal polyurethane still have taken that message to the market to very wide acceptance of the customer base.

Thank you. And we have 1 final question, which is about what sort of helmets are we looking at in terms of Eclipsys?

So that's a great question. We're going to a couple of different routes. One of our external consultants has contacted a race company that is already interested in the idea behind Eclipsys, possibly reducing thermal stress during a race. If any of you know anything about racing, it's a very thermally stressful situation when you have a car out for 4 to 6 hours at 200 degrees. But beyond that, our major market that we really want to focus on is first responders and military. Those bits are really asking for something like Eclipsys to reduce that thermal stress. The anticipation of Eclipsys is that through the reduction of thermal stress that we may be seeing a lot of reduction of fatigue. And when you think of first responders, SWAT teams, fire and rescue, even Ranger access in the mountains, that reduction of fatigue could save a life. And the value proposition is very strong. Now the concept is to prove it out, find a few partners that can be early adopters and get into the market in that segment of the helmet market.

Chris, I think the key thing that we've seen from the wear trials that the body armor has done so far is there is big reduction of fatigue that people feel after, for example, foot pursuit.

Yes. I mean what Rosheen is talking about there is in our field trials, numerous officers have noted that in a stressful situation caveat being what is stressful, a foot pursuit, dog sniffing, investigation at a house somewhere where there is stress put on by the officers almost unanimously have found that their recovery rate is substantially improved instead of having a cool down of 1 to 2 hours, they're seeing 15 to 30 minutes. That means a reduction of fatigue, possibly even the ability to have another situation should it come up very rapidly. So that is very well received in the law enforcement community so far.

And Rosheen, I just want to mention, we will build -- obviously, we're not wanting to preempt the work that our customer is doing. But once they finalize their work and are fully commercialized. We'll be providing some of that data for shareholders to see and also wanting to as we begin to further our market penetration in that area. So more details -- specific details will be coming about that.

That's great. Thanks Bob. Thanks Chris. I think we've come to the end of our questions. So with that, I'll just give everybody a quick minute just in case there's a last question to come through. But hopefully, shareholders have found that a really useful dialogue and just an update on where the business is. I do want to take a moment just to thank our management team and the team back in Greer. It has been an enormous year and everyone has been working really, really hard without -- with COVID and also the fact that a number of us haven't been able to get over to the U.S., although we're looking forward to being able to do that sometime next year, hopefully in the earlier part of the year. But the amount of work that the team have done, it's been great to have Chris and his team join us. We do talk in Celsius not Fahrenheit on these calls. So when he said 200 degrees that was...

Yes, I was thinking the same thing. Yes.

But just to reiterate that we really do appreciate all the hard work that has been done. And I think shareholders can see there are new hires that we're looking to bring on now, which goes to commercialization of the products. I also want to thank our service providers. So our company secretarial team, Mertons, they've been through a lot this year. But we really do appreciate all the work they do with us. Automic, thank you for today. It's been very, very easy to the system, and I heard shareholders have found it easy as well. And finally, we've not had any questions for the auditors today. But I do want to thank Matthew and his team. They have been great to work with, and we really appreciate the insights that they bring to our business as well. Finally, I do want to thank shareholders. This has been a long journey for many of you. But I know on behalf of the Board and myself and the management that we're very pleased with how the company has positioned the 5 platforms are particularly important. The diversification of the products but also the commercialization and the fact that we've got customers who want to adopt the products. And so I want to think back 2 years ago, we did a big capital raise ahead of COVID. Thank goodness, we did it, but it has positioned us incredibly well for where we sit today. And I'm very, very positive about the future. So that's all from us today. Thank you very much for joining us, and we look forward to providing you with future updates in the near future. So I'll draw the meeting to a close and say thank you.

Thanks, everyone.