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

[Audio Gap] throughout the meeting.

Good morning. Welcome to the Webinar Presentation from Alexium International Group. This will be the first of what we hope will be many of these webinars that we'll be holding to update shareholders and interested parties about the progress of Alexium International over recent periods. Our goal will be to hold an update of some form every 6 to 7 weeks. The format will be similar with management led by Billy Blackburn, the Chief Executive, making a presentation and then taking questions from participants in the call. Our goal is that, either with the 4C announcement, or the half full year results, or in the quarters of the March quarter and the September quarter in the middle of those quarters, we will provide this formatted update. And in the process, we hope provide all interested parties with an opportunity to engage with the latest developments at the company and to ask management any questions they may have. I welcome you to the call. Billy will give his presentation. And then as we get to the end of the presentation, we will open up the Q&A function and Billy and Lisa, our Chief Financial Officer; and myself, as Simon Moore, the Chairman will take those questions depending on who they're most relevantly directed towards. We thank you for your participation today. And with that, I'll hand over to Alexium International Group Limited's Chief Executive Officer, Billy Blackburn. Thank you, Billy.

Yes. Thank you, Simon, and thank you, everyone, for joining. And I hope everybody is doing well. So good evening to those in the Northern Hemisphere, and good morning to those in the Southern Hemisphere. We'll spare you the disclaimer. So for our new friends and new interested investors, we will give a little bit of a company overview. And for those of you that have been with us for a long season, we appreciate your patience. Company overview. Alexium is a performance materials company. We leverage our proprietary inventions and technology to take novel products to the market. We're really focused on thermal regulation in dehumidification and temperature control for textiles, which can be effective in mattresses and bedding space, also apparel, athletic gear and also temperature controls for other markets such as packaging, electronics and even automotive applications. But the company was really born out of flame-retardant technologies and doing work initially for the Air Force for flame-resistant materials and textiles for uniforms. One of the core competencies of the company is microencapsulation. So we're very good in encapsulating chemistries and putting them in capsules as delivery systems that basically form crystals around the chemistries that can deliver, in most cases, that we're doing now, thermal regulation in textiles. So the materials, the crystals will melt absorb heat providing cooling. And then when you take the source of heat away, they recrystallize and regenerate. So that's one of the novel things around using microcapsules to deliver chemistries that makes Alexium very unique in delivery of our solutions. But we really focus on comfort, heat management in the textile space. And then the separate lane for our business is flame-resistant materials and technologies. Now, we get there through advanced research. And one of the challenges for the company that will continue to juggle and make sure we have the right priorities, which first is to deliver financial results and sales; and secondly, to continue to innovate and grow the company. We do that through advanced research, product development, analytical. We have very advanced laboratories in South Carolina at our headquarters. And it's separated in 2 specific areas: one for product development. And in that area, we actually take materials and products from our customers. We integrate our technologies, and we do all the testing to give them the marketing claims and performance claims they need to differentiate their products. So really said differently, what we're doing there is, we're enhancing our customers' products so they can either sell at a higher price or sell more volume or better yet, both. And we proved that with analysis that they can take to market and substantiate to their user base and consumers. But second to that, we continue to innovate in the background. We have an R&D lab here where we are testing and developing new molecules, new chemistries and new materials that we can take into these spaces. One of the challenges for the company is, we have a whole world of opportunities to chase, and we have to be disciplined around what we go after and not trying to do too much all at one time. So we've brought a lot of focus around that over the last 1.5 years since I've been here, and I'll speak to that a lot this evening. We have 25 global patents, whether there are applications or granted patents, and we're continuing to write more in the background with some new technologies that have come out recently, and those are specific into the FR space, and we've got some renewed energy around an FR and some good opportunities in the market for that. And then lastly, we make our products in the U.S., and we distribute globally. And we've had some nice developments recently, even in the Australia and New Zealand markets and also Europe where we're starting to move out across the globe with our products. So market segments. Our core market is in the bedding space, and that's in cooling for mattresses and pillows and toppers. Most of the cooling sales right now are through our PCM, or phase change materials, but also flame-retardants that go into PCMs to make them basically flame-resistant where we're not adding a fuel load to a mattress. Also, we're starting to do more work right now, and we have multiple active projects in flame-resistant textiles that go into mattresses. And there's some regulations, especially in North America that are lending some tailwinds to that effort, namely fiberglass is being regulated out of FR materials for mattresses and then forever chemicals, halogenated, things like fluorides and formaldehyde. Those are chemicals that are being regulated out under sustainability and toxicity regulations. We have formulas that are well ahead of that change in the regulations that we're rolling out now, and we're getting significant traction there. One of the larger projects that the company has been chasing for a long time, and I know it's a source of frustration. And there was the term that was used by one of the questions that came from an investor, and I share your sentiment that the military seems to move at a glacial pace. I agree. And so, the military is a tough place, and we are now closer than we've ever been to a success there, but no success is promise when you're subject to public dollars and political decisions where a politician may get voted in office and pull the budget or change the direction of those dollars. But I can tell you the technology and testing we've done with the military is as close to success as it's ever been in the history of Alexium, and we're very active there, but it's not guaranteed. But the beauty of that and the silver lining is, all that work in development has lend itself to technology that we can take into the retail and private sector, namely workwear and personal protective equipment. Also, we've made -- because of the work on the military and the renewed investment in time and innovation in that area over the last 2 years, we've made strides that opened up other spaces in home goods and bedding as well, and we're capitalizing on those now. And again, I'll get into more specifics shortly. Tactical gear. That's been a -- it's been a challenging one. We rolled out Eclipsys and tactical gear. We have mountains of data that show it work. We have user tests that have worked well. We found it's challenging to work with a lot of small tactical vest producers, and this is for the ballistic vest where we're putting Eclipsys in for cooling. It's been difficult to get any significant volume there. So we've changed our approach there to really selling to large buyers for public offerings where there's large tax dollars available for large institutions. So in America, that's your border patrol, your federal prison systems, large state and federal law enforcement divisions. And then certain sectors of the military as well. So it's a change in strategy on how we sell there. But the work we've done in tactical gear parlays itself nicely into athletic gear and athletic pads. So we're starting down that path now, and we've been developing with some brands, some interest, and that can be think, athletic armor, so shoulder pads, as you can see pictured in the screen here, helmets that also opened up the opportunity in shoes where we're active with a couple of large brands right now. So the work we did with the military and law enforcement sectors also opened up and gave proof of concept for these other markets. And then lastly is packaging. We've been doing a lot of research here and our phase change materials are very much applicable in temperature-controlled packaging. So think small packaging and typically reusable packages where we can control the payload, the contents of a package with our technology to keep it within a specific temperature range to keep the payload basically from spoiling. And that's really applicable in temperature-sensitive areas like pharmaceuticals and life science products, even things as simple as blood transport. And they're wanting to move away from mechanized packages and ice and water, [ styrofoam ] and cardboard and large packages that take up a lot of footprint on shipping vessels, create a lot of waste. So it's a sustainability story. It's a reusable circular packaging. And we're now developing a lot of new business there, and we've added a sales professional from that -- specifically from that market to help in that initiative. So we have an ESG commitment at the company. And I'm going to just jump to the bottom here and point out something that's a bit obvious, but I want to say we are committed, even though, frankly, by law, we don't have to be because of the size of the company and the stage we are in our growth and also the way the regulations are working in Australia. That said, we're still going to go down this path and be ready for when we are at that size. And we know it's inevitable. But beyond that, it's the right thing to do, and we're investing in that. And we always have sustainability in mind with what we do in our business with our operations, our carbon footprint, the products we develop. We don't want to put products out there that have toxic materials in them or have a large carbon demand that are just going to make matters worse. So we're very cognizant of that. Most of the chemistries and even the rolled goods and non-woven materials we put out typically are going to be from natural materials or sustained materials. And we've showcased this quite a bit in our communications to our investor base, but we want you to know that we're, not only going to do the right thing under sustainability, that we're committed to it. And we know also that makes the company more valuable long term, makes it more bankable and it makes us basically where we won't be regulated out. Beyond that, we're a publicly traded company. We want to be very open with disclosure around what we're doing. The team here is ethical and its principal as any team I've ever worked with in my 30-year career, and I'm very proud to be associated with them. And when you ask us questions, we want to be open with you and tell you what's going on. And then our company is at the very -- for a small company, we're very diverse. We're very much focused on pushing people forward from every sector of every walk of life. And we really look for the best people that are most qualified. And we've been very fortunate that by hiring the best qualified people, we're naturally diverse anyway in our population. But we are committed to the ESG program despite regulation, we know it's the right thing to do, and we're going to continue down that path. So for our new friends and again, thanks for our friends that have been with us a long time, but our product suite, Alexicool and BioCool are phase change materials, and those are focused on cooling -- and those are microencapsulated thermal management cooling materials that mostly are in the bedding space right now, but we're starting to push those products into some other areas. And some of that is in cooling apparel and also in some medical applications for cooling. So you'll hear more about that. That's on the drawing board in our research group. But those are secondary efforts to delivering the initial success that we need in bedding and continuing to move our bedding products, saturating our current customer base in North America, moving PCMs globally, and then moving into the right into some of the other products in the core market in bedding. But Alexicool is our traditional workhorse, hydrocarbon-based PCM, BioCool is our bio-based and best-in-class in PCM in the world at 94% bio content. And those are really -- they make up the lion's share of Alexium's revenue right now, which is great. That revenue is foundational for the company, and we're going to grow on that foundation and continue to grow that foundation, but it's not enough, we know. And we know we're very concentrated in those products. We're very concentrated in bedding. And what you're going to hear a lot about going forward and tonight is that, we're moving into other markets with our technologies. And we're also diversifying our bedding markets globally and diversifying the products into bedding markets globally and in North America. So that brings us to DelCool and Eclipsys, and we developed DelCool and Eclipsys both because phase change materials like Alexicool and BioCool are very effective, but they exhaust pretty quickly in the first few hours of the user experience, and we wanted products that would carry people's comfort in cooling and dehumidification through the night. So that's why we developed DelCool and Eclipsys. DelCool deals with thermal comfort through the management of heat index and humidity reduction. And I like to tell people that are marketers as they're pitching this product and they integrate DelCool into their products, I would invite you to think of it this way. Have you ever been humid and hot? Typically, that's uncomfortable. Have you ever been humid and cold? Also very comfortable -- uncomfortable. That humidity makes you to feel much harder than you actually are or much colder than you actually are. The story with DelCool is, it's a regenerative product that deals with humidity in the microclimate. So dry is comfortable, and that's the story we're starting to get more and more traction, and we're seeing growth in the top of bed products that are in the retail space of that right now. And we also believe it has some applications in medical bedding into the medical space and had some health benefits. Eclipsys is one of our more novel technologies, textile composite. It's a laminate. And we started it in bedding. We're now launching our first bed. It will be live this summer. The orders are in, and the bed is being built. And that is actually an Eclipsys and DelCool bed, which is 2/3 of the platform leg that could be phase change materials, along with DelCool and Eclipsys for a best-in-class thermal comfort bed that deals with both heat and heat index through humidity. So we'll be making some announcements over the summer, specifically where that's being launched so that you can tune in. You'll be able to see it on TV when it runs, and you'll be able to see the election product live commercially. So you won't be hearing it from me. Luckily you can see it from the ads, and there's going to be a big basically home shopping network push in one of the U.S. holidays. And we'll put out some announcements to get folks to tune in to see that, but we're very excited about that. And if that sells well, we expect it to ramp thereafter. And as I mentioned before, we put a -- we were born out of FR technologies, Alexiflam and Alexiguard were the traditional 2 products. Really, the difference between the 2 is one's more for natural fibers and one's more for synthetic fibers. Alexiflam for natural, Alexiguard for synthetic. The combination that you hear about when we talk about flame-resistant NyCo, flame-resistant nylon cotton fabrics and that's for military uniforms. That's really a combination of Alexiflam and Alexiguard. It's mostly Alexiflam with some Alexiguard in it. Why is that? Because it's nylon and cotton, so you got a synthetic and a natural fiber together. So we use both in that mix in the flame-resistant materials we've been developing for the U.S. military. And again, that has lent itself well to us moving towards really shorter lead time opportunities in workwear because the development work around the military, we've improved the fill of the fabric. We've improved the FR. And again, for our new friends, we passed the most rigorous flame-resistant uniform test last September at North Carolina State University and that was the Pyroman test, which is essentially a mannequin with sensors all over it, 8 flamethrowers on 4 sides for 4 seconds, basically, it incinerates the mannequin with all the sensors, and it's got to have less than 35% body burn. The material needs to self-extinguish and the material needs to stay intact, and we passed and we outperformed one of the market leaders in traditional FR material leaders in those same tests, that same day, burning uniforms made of that material. So that opened up a lot of new competence in the election product with the military, and that kept us in the -- unfortunately, the question was right in the glacial pace of a government decision. But we're going to stay the course because the size of the prize there is so large. But that investment at time is not lost because again, it's opened up other doors for the company. And I will -- a little bit of a teaser here. We have a third FR technology that's been born out of all that work. And it's also come out of a request from one of our largest customers to get ahead of some regulation in the bedding space. So we're now rolling out a new FR chemistry, and we're going to announce it soon, and it is free of any materials that are being regulated out of the bedding space at the state level in the United States. And we're ahead of that, and we're getting significant interest. So it's a treatment that goes on FR socks, which are mattress socks, which is basically the fabric that they will wrap completely around mostly foam mattresses, which are highly flammable to make them flame-resistant so they can pass bed burns and pass all the regulatory burn requirements under the U.S. guidelines. And so, we'll be making announcements around that, but we've signed a commitment on exclusivity for that with a large top 3 in the world brand, and we're working to roll that out now. There'll be specific announcements coming as we move further along the commercial terms for that, but that exclusivity is for a short window that gives us basically a guarantee on the revenue when we pass all the testing, which we're well into now. Everything looks promising there. Okay. Strategic pathway. We got the rearview mirror FY '23. Really, that was around me joining and restructuring the business. Dr. Brookins moving into the Chief Technology Officer role. And then again for our new friends on the call, that happened in the last 2 years. And Bob and I now partner every day in running the company and moving the company forward down a more commercial path. And it was Dr. Brookins team that developed the technologies that we're now commercializing. And really the reason I was recruited and brought in was to drive a commercial outcome, was to take that technology offering and all the development work Bob and his team had done over the last several years and take it to market and grow sales. So that's now the step change that's happened between '23 and '24. Look, we drove the culture to one team, and we do operate as a unit here, small company, and we all are very clear that our culture is driven around one thing, we serve the customer. It doesn't matter if you're in accounting, if you're in product development, if you're in sales, we all serve the customer. And nobody here at Alexium is confused by that. During the early throes of me being here, we put in a strategy around growth, which was 70% of our time and efforts will be focused on our core markets, 20% into adjacent markets, which meant moving technologies into other spaces, and then 10% on breakthrough. So modifying technologies, developing new technologies again into further breakthrough markets. And that was us bringing operational discipline to the company to really focus our time and money on where the short-term revenue and where the investment had already happened to monetize that. Moving forward, we've changed now and we're diversifying. So the strategy has been grow and diversify. Now we're building out the sales team. We've gotten the structure in place with the company to support the sales team and them adding on additional revenue. So that means, not only secure the sales, close the deal, but actually make the product, run quality control programs around it, and do the accounting and collections around it. So, as I always joke with people, nothing's really sold until it's paid for. But we've been bringing a lot of discipline around, growing and ramping up the production to get ready for sales growth. There is a shift going on this year that will play out over the next few years, and that's a shift in the original focus, where we did 70%, 20%, 10%, 70% of the core market, where we're shifting 40%, 20% and 40%. Now, 40% is in the bedding space on the front end of that. And the bedding market is -- it will break your heart. We've been in a 2-year slump in the bedding market, and it's very tough, but we've held on to our customer base and we've held on to our position in that market. But it's a down market, and the bedding market can be a feast or famine, and it's been in a prolonged famine, but we're hanging on to our customers there. We're continuing to saturate those customers with new products, with our phase change materials, and we're pushing it globally. But we're not going to continue to bet everything on the bedding market. So we want to hang on to that foundational sales and that foundational relationships, grow it incrementally, but we're going to push energy into our breakthroughs. And really, where the growth markets are going to be for Alexium long term and the significant sales dollars are. Many of the markets we're pursuing now are exponentially bigger than the bedding space for Alexium long term. So that's really what you're seeing there, is the shift to position the company for growth and leverage the technologies that we've developed. So that's year-on-year bedding growth, that's progressing to work with the military for FR fabrics, that's commercializing Eclipsys in tactical gear, which really segues to the next bullet point, which is Eclipsys in new markets for shoes, athletic padding, cold chain packaging, and then workwear. And cold chain packaging and workwear, workwear more for FR. But there are some cooling opportunities in workwear, and then cold chain could be Eclipsys and our phase change materials and a combination of each to really solve some of the -- we call it the golden hour or the last mile on cold chain packaging. But one of the areas we're working to solve for is once a package delivers, they take the temperature sensitive materials out, an inner package that can take it for that last hour or that last 8 hours while they test the materials, or they get it to the final use and return packages, or return the original container back to the truck that it came on. And there's a big need in the market for that. We're shoring up our supply chain right now. We are actually looking for efficiencies in our raw materials. One of the challenges Alexium had to overcome was delivering volume and ramping up volume. And in order to get efficiencies in your supply chain, you got to have turnover, you got to have volume. So we're just now starting to get that in some of our products, which allows us to basically have better margins and also have better price position for our customers, which ultimately allows us to win more business. So success breeds success. So we need that momentum and that volume to be more efficient. For a company this small, and I've been here again, 1.5 years, the financial discipline in this company is, bar none, to any place I've ever worked. It's first class. And that's a tip of the cap to Simon and his team and to Lisa and her team. But we run this just like any Fortune 500 company. We run a very tight ship on accounting and financials. Being a publicly traded company, we're very open. We get audited regularly. We have a lot of disclosure. And again, I'm quite proud of our team, and I think that's one of the areas of excellence in the company. And also to those on this call that have invested in us and been patient with us, the funding, we've got a bridge note in place now. We'll speak to that later in the presentation. But we're also working on a recapitalization plan, and we're positioning the company for multiple years more of growth, and ultimately to deliver on the return that everybody originally sought when they got involved with Alexium. 2025 through 27, I'll pick up, and as Simon said early on, we're going to be reporting in to you regularly. So you're going to see this slide again and we're going to update progress on this slide as we go forward. So I'll move past that tonight, but I'm going to pick it up in the next 6 weeks presentation to track against it. So as I mentioned before, we're bolstering our sales team and business development. And I say sales and business development side by side because I want to draw a distinction between the 2 here at Alexium. For me, sales is mature products that we have a specification. We have set costs, set pricing, and our folks can go sell it into the market. The market, there's competitors and we're selling on price and quality and it's selling against specs. Business development for me is more of a technical sales and more of a solution sell where we're solving a problem and we're creating demand in a space. Those are very distinct skill sets and they're very different to me. So we've got adequate sales in our PCM area right now in bedding where we're building the team out to go forward is around business development. So we brought on 2 new executives that are -- and we were very slow in hiring and very stringent in our screening of these folks, but they're focused on business development. So they're going out and creating new markets, creating new demand, leveraging our technologies into those spaces. And then lastly, we may be adding some manufacturing reps as the year goes on. And that's a lower cost, lower risk way of bringing people in from the industry that are quite experienced in these markets. So, say we want to go into cold chain, we may add some contract manufacturing sales reps in cold chain, or we may bring in some folks in the athletic space. So you'll hear that as we move forward and we roll these out and we want to start pushing further into those markets that will bring in folks from those markets that have the relationships and the technical know-how to get us where we're going faster. Heightened cash and commercial discipline. Look, we've improved our funding runway and we're going to speak about the recapitalization in this call. But that's critical. Myself and the team joining the company here, we've had to overcome some tough markets. We've had to overcome some difficult history and some stiff competition. And it's been tight on cash and we've managed the company as it's very tight on cash. So we're very careful with every dollar we have and how we spend it. We're not frivolous. We keep our belts very tight. And so -- but we put all of our energy into growing sales, piling on more revenue, but not just buying our way into it. We do manage the company very strictly. Pipeline conversion and supply agreements and partnership agreements. Since I've been here, we've signed multiple agreements. I'll make some announcements tonight or this morning. And one of the things we're bringing to the company is discipline around agreements with our suppliers and agreements with our customers. And we're going to continue to announce those as we knock them down. We have multiple agreements in negotiation in the background right now, and each time we sign one, we'll be announcing it to the investors in the market. So more coming on that. Again, we're looking at year-over-year growth in bedding with our existing products. Again, staying on the long program, large program with the military, which pushes us into workwear. We will get Eclipsys right in tactical gear. I believe that's going to be through large tenders with public agencies. Eclipsys into adjacent markets is a large opportunity for growth. That's in cold chain, footwear, also athletic pads. It's not mentioned there. And then FR into adjacent markets. We save mattress, textiles and workwear, but there's also home goods. In the U.S. many home goods, like even carpet, curtains, furniture, there's a lot of FR that's not bedding for FR textiles and foams. And then we diversify our supplier base. Again, we're not going to have a single source of any of our critical raw materials. So there's been a lot going on in the background to go 2 and 3 deep on suppliers to make sure we have adequate supply that can't be disrupted. It's also a lot of geopolitical things going on. So we've had to position some long supply chains from places as far away as China and other places in Asia to bring them back to the States. Some of that's just freight challenges and getting things delivered, some of its tariffs, some of its workforce with COVID and other pandemics going around the world, it's been difficult to import. So finding closer to home and alternate supplies that are more secure has been critical in our supply chain. Then lastly, the funding, which we'll get to shortly. So the strategy at its face is quite simple, and it almost sounds too simple when you say it out loud. Grow and diversify revenue. Well, of course, anybody would want to grow and diversify their revenue. For us, that's actually become a battle cry here. And it's quite poignant when you think about it, because we have 2 prongs to that. It's grow and diversify revenue in our core market, which is bedding. And that's growing the revenue in North America, growing the revenue globally. But it's also diversifying that revenue by launching new products like DelCool and Eclipsys to shore up our space. So it's not just phase change materials, which is most of our concentration now. Now we're starting to launch the Eclipsys bed, and we're growing sales with DelCool, which diversifies the revenue in our core. But the second leg to grow and diversify is grow and diversify our revenue outside of bedding. Because we have a concentration issue in bedding. We have too much of our focus around that, too much of that focus around PCM. And historically, a lot of those sales came from a major player in that space. So we're diversifying that by adding more customers and going after the other large players, which we're being successful now in that, and diversifying the revenue through the products. But the other markets we're heading into are key, and I believe that's where the significant growth over the next few years for Alexium will come from. So again, sustain the foundation through growing and diversifying within bedding and then significant growth and diversification of revenue, weatherproofing it from the market, being in multiple markets. So if the bedding market gets weak, we would be in military. Military market is not good. We're in bedding and athletic gear. If the North American is weak, then we're in other markets around the globe. So the whole scenario is growth, but also risk proofing future proofing the business from such an up and down scenario that we've seen over the last few years by the over concentration in bedding. So again, we're not going to walk from bedding. We're going to keep that foundational and keep growing it. But we're going to pile on top of it and build from that foundation. So we've shifted to the breakthrough balance I said earlier. And the overall objective right now is to really get out in the market with a new sales team, new business development team, and break new ground. And again, in bedding globally and also in other products, in other markets. So Uriel Infante, he joined the team a few weeks back at the end of February. We hired him from the cold chain packaging industry. He has significant experience there. He's coming on as our new Business Development Director. He's on the team. He was here with me today, and we're working on the business plan for him to go to market, and he'll be working with us to develop new business in the cold chain market. But he's also working in FR markets adjacent to bedding, so non-bedding FR markets. He will also be working in the athletic gear and footwear markets. Jay Shealy will be joining the team in April. Jay has significant sales experience in specialty chemical industry. Jay is a former colleague of mine. He's worked in 3 different businesses with me over the last 30 years. I was able to -- fortunately, I was able to recruit him in at late stages of his career to come in and help us on our journey here at Alexium. I trust him. He's extremely effective, and he's very good at opening doors, writing terms, and closing deals. So I went after someone I knew could do the job and do the job well. And fortunate for us, he said yes, and he'll be joining this spring here in the States. And again, the culture journey continues here and the team here, I would welcome anybody to reach out to a team member and ask them these questions. What do they think the culture is at Alexium right now? But everybody knows we're all in sales and we all serve the customer. And that is our main job. Serve the customer well or someone else will. The golden rule. So we've shifted the focus priorities, as I said before. So the 20% adjacent focus and 10% breakthrough, which was 30% combined, are now 40% of the daily efforts. And that will be evidenced in the pipeline, which we're going to talk about tonight. Year-on-year growth in the bedding market with our core products, Alexicool, BioCool, DelCool and Eclipsys. Actually, as I reported, also FR to have new placements of PCM, BioCool and Alexicool, are in testing abroad. New inquiries from 3 producers in Australia and New Zealand. I know a lot of our friends on the call from Australia have been very keen for Alexium, an Australian owned company, to finally do some business in Australia. Well, just like the military, we're closer to having business in Australia than we've ever been in the history of the company. So I would stay tuned there because I believe, just statistically, with the amount of folks that we're now engaged with there, that success in launching products in Australia is imminent. And we're quite excited about that. And one of the things we've seen in that region is, it seems to be a little behind North America. And I don't mean that it's a late adopter. It's just the way it's played out. And we've seen the same thing in Europe, but we're seeing an increase in interest in thermal regulation and bedding. So we were working with several large bedding brands in that region right now in active development. And what does active development means? It means we've shown them the data, we've shown them the presentations. They've said, yes, we're interested. They're now testing the materials and reviewing the materials, which is really the precursor to building prototypes and then testing how it performs in the prototypes. So early stages of that, but it's moving along quite well. For the NyCo in the military, we passed the Pyroman, as I said earlier. From there, we moved into the next stage of development, and they asked us to make improvements to what we say in the America is hand. And what they mean is the feel of the fabric. So that's the aesthetics, that's the feel and the drape, the softness and the feel of it, the breathability, the way, the touch of it, and the comfort for the soldier. So we were able to pass the main hurdle, which is the FR requirements. Now we're working on the aesthetics of the product. And we were constantly hovering over the Army asking for when are they going to put this out for a bid. We expect that to happen in the season coming up here soon, but it's really beyond our control. But we are in the fight. We're on a short list, and we've had promising results there. There were some specific questions that came in from the investor base about that. So I'll answer the specific questions at the end here. Eclipsys fabric for tactical gear. Look, we've completed that, and now we're shifting to public dollars. What we really [Technical Difficulty] want there is further base, which is typically hundreds to thousands of employees that wear these vests and this gear for them to get specked in for Eclipsys. So that when we get a bid, we're not trying to convince multiple retail vest producers and all these segmented producers to adopt the product, because really, that's a tough road to go for small volume. We're looking for a large volume buyer to spec it in that way, those vest producers will adhere it to the product and respond to the bid as it's specified into the proposal. So a change in strategy there. Commercializing PCM Eclipsys fabric and FR into new markets, which is shoes, cold chain, and workwear. We have 2 development projects with 2 major shoe brands. Our initial tests have been very compelling. Technology really is like nothing in the market as far as managing heat flux. So we are in late stages with one getting towards a commercial discussion around pricing and timing of launch. And we're in the early stages with the other in testing with their shoes, and both are for an athletic sneaker. The Alexiflam products wash durability are underway, and that's readying it for workwear. The difference in workwear and military fabrics is, workwear typically comes out of tough industrial applications. Think refineries, steel mills, places where they wear 1 piece jumpsuits that are FR materials. And typically the employees that wear those take them off each day in a locker room and they go to an industrial laundering cycle from there. So wash durability is critical in that space. Got to stand up to some very harsh chemicals that they use in those laundering processes. And we're very close on the launch there. I'm glad to say, we're actually working with some local textile companies that are already in that space, that are in the Southeast, local to us in developing some of those fabrics now. More to come as the year unfolds, but we're gaining traction there. I mentioned this earlier, but we've signed a letter of intent with a major international bedding brand. And that's exclusivity on a new FR chemistry for FR mattress fabrics, otherwise called FR socks. And that's triggering expedited development. The company is actually looking to make a running change with their existing sock producer. So we're not starting from scratch. It's actually -- the chemistry would be applied to a sock that's already in a commercial channel. Already being made and is adding a finishing step and then launching it into that product. And we're now moving into the testing of the fabric at the lab level. We finished up the chemistry, we finished up the letter of intent, and then we will produce the prototype fabrics to build beds, which will go to bed burns. And that will be in the next few months. I won't talk too much about the supply chain, but we have done a lot of work in the background there. It's not sexy, but it is very critical to making sure the company is secure. So the worst thing that could happen would be we go secure business and we can't get the raw materials to deliver the goods. So that's very critical. And it's always going on in the background to make sure that we have robust supply chain. Cash and commercial discipline. We'll pump that a little bit further down into the discussion here. But lots going on in that area. The new loan from Colinton Capital closed in December. That bridged us to the recapitalization plan that's underway. And we're expecting that to finalize in April. And that's pending shareholder approval. Supply agreements. Since I've been here and I've done this my entire career is to open with terms and close with terms. So we've been going back with our legacy customers, pushing supply terms to them, and then with our new customers, we're opening with terms so that any new business we start with the contract terms and pricing upfront. Again, no surprises, and making sure what's expected from Alexium. The customer understands that, so we have a better chance of closing and heading off any misunderstandings. There's quite a few in the history of Alexium. So there's some cautionary tales out there that we've learned about and we've learned from, and we're going to apply those learnings going forward. But for me, in my career, I've always used contracts as a way of getting the terms on the table and making sure that everybody is kept honest in the dealings and that everybody understands the outcome of all the work that goes into developing business. We have a very long business cycle. So getting terms on the table early and pricing on the table early is paramount. So BekaertDeslee is actually Alexium's largest customer by revenue, and also a very large opportunity to do exactly what I said earlier, grow and diversify in the bedding space and also the textile space outside of bedding. BekaertDeslee has a global footprint. They're on every continent in the world. They're one of the largest textile finishers in the bedding and home goods space. We just inked a national supply agreement that also has opened doors globally with BekaertDeslee NV. They're based out of Belgium. As you can see, large company, 4,000 employees, 19 countries. So we're going to leverage that agreement to basically move our products into other markets and saturate the bedding space with Bekaert. And they are one of the premier fabric finishers in the bedding space. SSB, Serta Simmons Bedding, one of our largest customers for PCM. BekaertDeslee is actually one of the OEM producers for SSB. So it's SSB that specs a lot of the products that BekaertDeslee makes for them. SSB being the final brand of the mattresses and accessories and bedding. Bekaert does a lot of that finishing. But there's a host of other companies that are Tier 1 and OEM suppliers to SSB that you'll see us buttoning up supply agreements with as we go forward. But we buttoned up the agreement with SSB, and there were some legacy agreements in Alexium, some that had been basically had played out over time and had terminated over their term and some that were somewhat inactive. We consolidated all of those into a single agreement with master terms, paving the way for more growth with SSB going forward. And again, they represent the largest volume of our PCM sales and customer base in the bedding space. So that's been signed in the last 1.5 weeks and we're operating under that new agreement now and multiple projects active with SSB right now as well. And then contract negotiations with 3 other additional major customers that we expect to announce in the coming months. So near term focus for us is converting these opportunities into recurring revenue streams. Again, the strategy of growing diversify is simple at its face, but actually there's 2 prongs to it that really are future proofing the company and getting the foundation ready for scaling up and for significant revenue. We have a lot of qualified projects in the bedding space and non-bedding markets now. Our pipeline is more robust than it's ever been. And with the addition of the 2 new sales pros into the team, I expect the pressure is going to shift to our product development team and our operations team because we're going to be bringing in a lot of opportunities and expecting them to deliver on them. And that's a healthy tension that we want to create here. So we'll put the pressure on that team to deliver and we'll get them to where they run out of bandwidth and then that's where the company will start hiring and growing there. Once we catch up there, we'll add more cells and we'll repeat that process. And that's kind of the bricks in the wall that we're going to use to grow going forward. Again, we got to commercialize our existing technologies. There's a lot of sunk investment in those and they need to be taken to market and they're ready for the market and there's demand for each of them. And our technologies weren't just designed just for bedding. That just happened to be a good space where we were able to launch them. Bedding actually has been a good proving ground to prove the materials work, that the technologies work for us to get measurable results, and then take those results and parlay them to new interests and new markets. And that's how we're opening up other FR opportunities, how we're opening up thermal opportunities and athletic gear and packaging is by showing the proof of concept of what we do in bedding, getting those customers and markets to see that, and then showing them how we'll adapt that technology for their products, and that's proven to be a pretty effective sales strategy. So again, we're going to keep this balanced approach and we're going to leverage everything we've done before going forward. We don't just want to walk away from all the effort that's happened. We really want to monetize it and deliver on each of your investment. And anybody who's interested in investing, we encourage you to continue to tune in and track our progress. From there, I'm going to turn it over to Lisa Hubka. She's our Vice President of Finance and Accounting. Before she gets on, I'm going to give her some kudos. She's done a great job the last 6 months getting us through audits. She stepped into the role, our CFO has stepped down last year. Lisa stepped into the role and has done a really good job of getting us through half year, getting through audits. We've been working on this recapitalization in the background, which is a lot of work. She's done a great job there. Beyond that, she's just a good person. So turn it over to Lisa.

Thank you very much, Billy. I appreciate it. And thank you to all of you for being with us today and expressing interest in Alexium or your continued interest in Alexium. We appreciate that. And so, I just want to cover a few points from our financials. I know you have seen the presentation online, so certainly not going to read everything to you, but just want to point out a few things. So we did finish the half year for fiscal year '24 at $2.8 million in revenue, which is down from the first half of '23 by 19.5%. Billy's already spoken to the bedding market just continues to be down, but we have maintained our customer base, which helps. So, as the bedding market recovers, we should be able to recover along with them because we haven't lost customers per se. Then in our gross margin, our gross margin, you can see a nice uptick there over the last couple of half years. And we closed the first half at 44.3% in gross margin, which -- that's a 6.7 percentage points increase from last year. And a lot of that is due to both manufacturing cost improvements and our customer product mix, along with a little difference in pricing strategies and some things like that. But as we introduce new products, we should be able to continue to be at about that range going forward. Then -- and with that kind of margins, what is nice about that is, we just need the volume. We're poised for success if we just have the right level of volume. So that's always good to see with a healthy margin like that. Our borrowings and capital raise, so we -- as Billy already spoke to, we did announce the proposed capital raise, which will be going before all of you and -- that are either here or virtual for approval. And the intent is that, we raise a minimum of new equity of $4 million and $2 million of that we've already received in cash through a bridging loan from Colinton Capital, which we're very appreciative of, and the remaining $2 million to be received in additional cash. Again, all of this is assuming shareholder approval in the EGM in the first part of April. Then with the retirement of the company's existing $7 million convertible note and accrued interest, that is another part of the refinancing transaction, and that will help us with getting the debt off our books and improving our net equity. Then taking a little bit closer look at this from a cash flow perspective, our receipts from customers were up this half year even though sales were down, because sales in the second half of last year were up. And so, then we were collecting on a lot of those going into this year. The proceeds from the borrower, when you can see from the bridging loan, is the USD 1.4 million, AUD 2 million that we received. And we finished the half year at $1.8 million in cash, which is a good position to be in. Then, looking at our P&L. Again, we talked about revenue being down $0.7 million, but with the improvement in our gross margin of 6.7 percentage points, our gross profit was only down $68,000, which is a great result in spite of the downturn in the revenue. So we were able to recover some of that. We then further controlled costs in our operating expenses. So those are down by $0.4 million for year-over-year comparison. And that helps us then to minimize the amount of the net loss that you see there. If you look at our finance costs, our interest is up this year because of the higher interest rates on both the line of credit and the restated convertible notes. And so, that is also something we hope to get rid of is that, high interest rate if we're able to convert the notes. Looking at our balance sheet, again, looking at our cash position at $1.8 million compared to last year at $0.5 million, again, a lot of that is due to the bridge loan. But then we have also had -- with our decreased operating expenses, we've had decreased payments to customers. And our -- I'm sorry, our line of credit, we did close the half year with a balance on our line of credit of $600,000, which was virtually all of the capacity on it at that point in time. But remember that our line of credit is an asset-based line of credit. And so, it varies with our receivables and inventory balances. We've lowered inventory on purpose to help minimize the cash outflow from that. But that's where the bridge loan came in into play quite a bit for us was because of the position on the line of credit. But when we got the bridge loan, then in the first part of January, we paid off the line of credit, and we'll just resume using it normally, but have not had to use very much of it at all so far. One of the measures that we use internally for the management team is EBITDA, earnings before interest, taxes, depreciation, and amortization. So a lot of you are familiar with that, at least those in the U.S., in Australia, maybe not as much, but it's looking at what are our earnings, that is, excluding non-cash things like depreciation, amortization, and then our financing expenses with interest. And even though our sales were down, we -- our operating EBITDA is an improvement over period last year by almost $400,000. So that at least is a good result in spite of what has happened from a revenue standpoint. Okay. So now I think we have some questions.

Yes, we've captured everybody's questions, and thank you for sending those in. We'll kind of pass them around between Lisa, Simon and myself. It looks like there's some more questions starting to come in as well. So we'll get the questions that first came in before the meeting, and then we'll move to those that are coming in as we've [Technical Difficulty] presented here, and we've done this kind of by categories, bedding, body armor, capital raise, and so forth. A bedding question. So it says, discuss the development and progress we are making with alternate Tier 1 mattress manufacturers as a backup insurance to SSB, which is Serta Simmons Bedding falling over. For those of you that are new to us or don't know SSB, they've been through bankruptcy over the last year. They've restructured. New management team in place, new plan. We're actually familiar with the team that's in place now. We've met with them. We know their new plan going forward. So we do believe SSB is going to be successful going forward. We do not believe they're going to fall over. They still have a large share of the North American and worldwide market, and they still present a large opportunity for us. But the question is, should they fall over? So our progress with other Tier 1s we are working with, I won't name names, but we're working with, we'll say the other of the top 3. We're quite active with them and we'll be making announcements as the year progresses. So -- and that is -- it's not necessarily a Tier 1 that is a brand. For us, Tier 1s are typically the suppliers that make the products for those brands. So we're working with the end brand to work through their Tier 1s. And many of the end brands, which is SSB, Tempur-Sealy, Sleep Number. It goes on and on. Lots of other brands out there, King Koil example. They use a layer of Tier 1s to manufacture the beds for them or the components that go into the ultimate factory. And typically, Alexium works with the brand to spec in the technology they want in their product. And then we work with the Tier 1s to introduce those technologies into their brands and work with them on the testing, work with them on the application so that they could actually make the components that go into the ultimate products and bedding. So the agreements that we've signed recently are shoring up our business with SSB. Again, we don't believe they're going to fall over. So that's been shored up, but that shores up business along their whole food chain of tiered suppliers, OEM suppliers. And we're working with folks that make the FR fabrics. We're working with folks that make the foam, folks that make the finishing fabrics that go to the top of the bed, the ticking or cover fabrics where we apply PCMs. So we have active projects up and down that food chain. We're also working with other tiers with global licensees, that's in the Australia, New Zealand region, Asia region, and also Europe. And with the advent of Uriel Infante joining our team, he's going to be focusing on other developing markets in Latin America, as well as Europe and Asia. So he will be doing global salesforce and bedding, as well as the other areas I mentioned for him. He's a very custom world traveler, speaks multiple language. And so, then also cold chain. But to answer the question, we're working up and down the whole food chain with all the other brands outside of SSB to shore that up. And again, that's again diversifying and grow revenue. So diversifying the customer base is also part of that, not be so concentrated with just SSB. I hope that answers the question. If not, please put some more detail around and I'll be happy to address it. Okay. And the second part of that question is, any other products we're developing in mattress sells? Again, that's the new FR technology that we're rolling out. That's ahead of a regulation curve. And so, you're going to hear new announcements around that, but there's no other chemistry in that space right now there. We've got significant interest. So that's another diversified product offering in the bedding space for FR, which is core to Alexium's business. And we've been able to leverage that knowledge into a new launch that's coming out. You'll hear that brand name soon because of the agreements we're not announcing it publicly yet, but that's coming in the next few months. Next question is relative to body armor, asking any progress or roadblocks with body armor suppliers. At the last update, it seemed only one supplier was using the product. How are we going attracting business from alternate manufacturers? That's been a tough road for us, working with a lot of these small folks and trying to get it into the small volume. We've had sales with 3 different folks in the tactical gear space, but it's small and it's slow growth. It doesn't move the needle for us. It doesn't give us any manufacturing efficiency. So the answer there is that, strategy was not working. So the progress there was slow. That became the roadblock. This change in strategy is to go after public dollars and large tenders and not only to do that in America, but to do it globally and look for large bids where we can have the end user base test it. So we're going to be taking a basically product agnostic vest. So we're having a generic prototype made with Eclipsys in it. We're showcasing it to those user bases with their purchasing decision makers. The plan is for them to write it into requests for proposals, requests for quotes for public dollars, large tenders, as you would say in Australia. And that's the change in strategy. Jay Shealy joining the team is going to be working that market space. So a complete tide change in the way we approach that market. But the roadblock was the slow adoption from really small user base. It wasn't working. So we've had to do a pivot. Capital raise, overall picture. What do Colinton's, Wentworth and company directors and management see in the company and contributing so largely to this funding round and underwriting it that smaller shareholders perhaps cannot see, particularly given the poor state of the bedding market now? Well, I can speak for company directors and management. It's the change in the team. It's the new plan that's in place. And I say new, it didn't just come out yesterday. It's the new plan we've been working over the last several quarters, but it takes time to change the culture and get that plan into place. For me, my confidence in that is the team here at Alexium. It's the technology that has. Look -- and that team, our investors, our Board, and the technology are the reasons I left actually a fairly lucrative career to come here to Alexium. I took personal risk coming here. I have confidence in this company. I have confidence in the technology and the people working here and our directors. So for me, that's where it comes from. And that's why I'm willing to stay in the fight here and see this thing through to success. But I'll open it up. But maybe, Simon, you might want to color that in a little more.

Yes. Look, I can only speak for Colinton. James Williamson is obviously the person at Wentworth who's most involved with the investment on his side. But from my perspective, we've been invested in the company since late 2019, early 2020, and we remain very excited about the potential of the technology. That has never changed. And I think our perspective is that, the technologies continue to develop, the opportunities for broader applications of the technology continue to develop. And we really needed to find the right team to work with Bob as the driver of that technology to take the business forward on the commercial side. And we were most fortunate to find Billy. And I think the combination of Billy and his leadership of the organization, and especially the commercial aspects of the organization with Bob. And it's a credit to Bob that he's been able to transition from the CEO role into the CTO role and really form a true partnership with Billy. That's given us the confidence, in turn, to continue to financially support the business. We think that these stage of life companies are never a straight line. They never go from A to B. There's always a twist and a turn in the journey. But we do feel that we're definitely on the right path now, and we have confidence to put our money where our mouth is and support the guys in the pursuit of the opportunity that both we and they have as a shared vision for the operations and the company itself. So I know we haven't been through the dizzying heights of the 2013, '14, '15, '16 sort of period, and we haven't ridden that roller coaster ride, which a lot of the small shareholders have. And so, I understand those who may have some skepticism about the outlook going forward. It has been a long journey for many investors, but certainly from where we sit today, we feel quietly confident that the company will be able to realize its full potential over the course of time here and that we have got the right team in place to pursue the opportunities that the company has in front of it.

Next question is relative to cash flow, when does the company now expect to be cash flow positive? Look, there's also a history of things being said that didn't happen. So I'm going to not do that. What I'm going to tell you is, that is our ultimate goal. That is the battle cry at Alexium and the management team daily. We call it the BHAG, the Big Hairy Audacious Goal, and it is cash positive. That is our North Star right now. So I'm not being evasive, but we'll tell you it's in our near-term plans. Statistically, the opportunities we have in our pipeline suggest that we can get there, even if it's just on the lowest percentage of those statistics. But I'm not going to peg a date on the calendar and miss that date and give you an unfulfilled promise. What I will tell you is, I promise to do our very best. I promise to be a good steward of the investment money and the business, and I promise to keep you updated very frequently on our progress. And when we're very close to that, that's when we'll peg a date, when we know it's to be a sustained cash positive. We've been cash positive for short seasons before, and I know that's met with a lot of trepidation as well to be cash positive and to fall back into the red. So when we say we're cash positive, we want to be at a point where we're in a sustained trajectory of cash positive, self-financing, restructuring the company around that milestone, which would be a new day for this business. And I can tell you it's coming soon. But I'm not going to peg an exact date and disappoint. And next question came from cash flow and sales pipeline, it says in the half year presentation, the company stated the hope of being cash flows positive for FY '24. Given the company had negative cash flow the first half, what areas does the company expect to pick up the additional revenue required in the second 6 months? It is possible in that 6 months to hit that milestone. It's going to take some things falling in place in timing. We have hit some delays. The projects are not gone. They're slow moving, so they may trickle into the next fiscal year and this calendar year. What's driving that is actually new products in bedding with DelCool and a new mattress. DelCool and Eclipsys mattress rolling out and then FR -- new opportunities in FR ramping up in that same time period. So those will be the commercial drivers. Next one is around cold chain, asks, what are the progress and roadblocks with our product development and the packaging supplier base? Is it possible to expand on company's progression of cold chain packaging and footwear markets the company is entering? For example, timeline to revenue expected income from these. Cold chain packaging, I'll tell you, is a breakthrough area for Alexium. That's not something we're announcing revenue from right now or projecting revenue from right now. That's a developmental scenario. We do have technology we know will work there, which is PCM. We are doing testing with Eclipsys in that space. And so, that is in the drawing board right now, in the pipeline and coming. But it is not something we're forecasting right now. Footwear is different. We are active there and we do expect near-term revenue from footwear. We're not at the closing table on that yet, but we are moving closer, and we have had successful results with 1 of the 2 major brands that we've published. We're in discussions around pricing right now. Like any customer, they're saying our price is too high. And like any seller, we're telling them their ask is too low. So it's an active scenario where we're trying to find a middle ground for them to adopt the technology and see what level of product they can roll it out. And again, we're going to be updating every 6 weeks. So as we get close to a close on that, or we actually have a signed deal, we'll announce it to you. But I would tell you, cold chain is not something we probably would forecast a lot of revenue in the next fiscal year. There may be some on the back end of that year, but footwear would be something we'll do some forecasting around because we believe we're going to be successful there sooner. The next question is around delisting. Are there any thoughts to delist the company in the future in order perhaps to save money or lessen ASX and shareholder responsibilities? I'm going to give a pretty binary answer. The answer is no. And maybe, Simon, I would ask you to maybe color that in a little more.

Sure, Billy. Look, I think at the moment, being listed seems like a burden on the organization. But in reality, we have a broad shareholder base. We think that being a public company gives people liquidity and a choice of whether they want to buy or sell shares. The reality is, if you become a private concern, that that liquidity option goes away. And many shareholders we have are small investors, and the option of being locked up in a private company situation for an indeterminate period of time is not something that's really something that's viable for them. The absolute dollar cost of the difference between being a public and a private company, there's a cost there, but it's not nearly as much as people like to think. Private companies still need directors. You want to have a high-quality Board of Directors, so you're still going to have to pay reasonable amounts of directors fees. We are in an interesting structure because we're a U.S. company listed on the Australian Stock Exchange. We're a private company. Again, we're still a U.S. company with a predominantly Australian share register, which again makes for some increased disclosure and information requirements for people. So I think there is certainly no plans to delist the business. And I don't think through time that, that will prove to be the right step for the current share register that we do have.

Next is around the military. There's a couple of different questions here around military and flame-resistant materials. So the state of product testing by the Army for an FR uniform progress we've made and roadblocks we've hit. Is material comfort still an issue we're trying to overcome? So the progress is, we continue the development work and we're at the mercy of when they're going to put out an actual tender where we put in a formal quote and proposal. So the progress was we've gotten over the FR hurdle, which I'll remind our loyal shareholders that have been with us a long time that we never overcame that in the past and our new interested investors that we did recently overcome that, and it's the closest to a commercial outcome Alexium has ever been. So that's the Pyroman test last year and the active testing directly with the Army. In the past, Alexium was working arm's length from the military through a middleman that was controlling the bidding scenario. In this case, Alexium is working directly with the military on the testing, with their engineers and decision makers around that testing. But we are at the mercy of when it will go out for a public bid and when the military wants to make the change in their military fabrics for uniforms, and it's not easy for them to make a change, they don't just flip a switch and then start wearing new uniforms. They'll have to phase out the supply chain that's in place right now. There'll be a phased in approach. There is risk to the Army and the vendors to make that change. So that's part of the reason it moves at a glacial pace. The rest of it is just the way the government makes decisions [Technical Difficulty] that would actually be a barrier to entry for our competitors. So it actually would serve us well once on the other side of that hurdle. Are we still working on the comfort? And is that still an issue? We've made significant strides on the comfort. The engineer involved, the textile engineer involved from DEVCOM, which is the Army's testing grounds, has approved those improvements we've made. Next, it would be to take those improvements into production level fabric for more testing, more uniforms to be cut and sewn, and more burn testing to make sure the changes that we've made in the aesthetics and comfort don't in any way deteriorate the results on the FR and burn test. So that'll be the next hurdles that we come to. But we have made strides on the comfort and the improvement, and they are pleased with the results. We need that to be formalized in the form of a bid there. For the Marines, has Alexium been reincluded in the major testing program, tendered and being undertaken by the Marines? The answer to that is, unfortunately no. And we are working to get our way back in there. We are going to be making a unsolicited proposal, which is our right as a U.S. company in any entity to make another proposal to them and that the military across multiple branches, which would be the Army, Marines, is likely to be going with the same fabric. The bigger budget, the bigger user base is the Army. The Army does have more influence over the fabric that would be selected. And this is a unique change, because in the past, historically, the Army and Marines have gone with different fabric types, and the Marines were typically using wool-based materials. And now they're both looking for advanced, lighter weight, natural and synthetic blends that are more breathable, that are less expensive, so they can roll it out to a larger user base, and that are more inherently FR. So you're likely to see the work that was done for the Marine bid get folded into the Army program, which where we're highly likely. And that's the outcome that would be best for Alexium, unless they do revert back to their old ways, which would be to have 2 separate fabrics, which really doesn't make sense for any economy of scale for the U.S. military to do that. So we will petition the Marines and put in another offer and continue the work with the Army and then stay close to the subject to make sure we're ready to bid when they do put it out for a formal tender. Next one is, what exactly is happening with the military? It appears to stall again. It's not stalled, it's just slow. So I'll really point to what I've already said to answer that. A little bit redundant, but it's -- again, I'll go back to the term glacial. That's in the next question. But next question says, can you provide any comments around the almost glacial-like progress for an FR NyCo over the years? Other than my opinion about the way the government moves, which is totally different than the product sector, there's not much I can do to change that other than stay relevant, stay at the forefront with them, stay active with the relationships and make sure they know that our product is, in our opinion, superior on costs and quality and performance, and stay at the forefront and be ready for a bid. And again, they're in budget discussions right now. The money was approved for the military. Now, they're parsing it out for what it will be spent on. Those budget decisions are being made in late March into April and we expect to know what the next round of testing will be where we're active with the Army. So what we anticipate there is a request for more fabric with the enhanced feel of the fabric to move into more testing at DEVCOM where they do the material, breathability, tensile strength, initial FR testing [Technical Difficulty] and then we would move to cut and sewn fabric, we would produce to make uniforms and then move to the Pyroman [Technical Difficulty] ultimately from there their budget would be to significantly more fabric to make [Technical Difficulty] uniforms to go into [Technical Difficulty] for active and listed soldiers and marines. So at that point we'll know the budget and really a step scenario in their bidding where they shortlist certain suppliers to get into those next phases of testing. And when I say they're approving budget for that, it's not hundreds of thousands of dollars, it's millions of dollars they need. So they'll be spending a significant amount of money to do that testing because they won't make the change in fabric decision. They won't make it lightly. It'll be a very tough decision. Again, though, we're as close as we've ever been and we're on the shortlist and still in the fight. For sales, the company's focus and direction definitely appears to have changed. Why is this not being seen through increased revenue? What I would tell you there, and I'm not being cute is to stay tuned because that change is happening now. Look, since I've been here, we've had significant turnover in sales. We've had turnover in sales leadership right when I joined, and we've had turnover of other salespeople since then. And that's just the hard truth. And again, not being cute, but good help is hard to find. We've been very -- working very hard at recruiting [Technical Difficulty] and we [Technical Difficulty] people, the type of skill set, type of experience and the type of market focus has been heavily scrutinized here. But we've had turnover. It's been a shaky labor market and we've had difficulty with that. We're overcoming it now. And so, you'll see the increased revenue come from the folks joining second half of this calendar year because we're going to be piling on the activity as we put them out into the market, again, with our mature technologies, ready to go, and again, focus on our core business first, not on chasing new things, but seeing the commitments and investments we've already made through to commercial outcomes. So it's early in that phase now. Next one is around sales pipeline. Where does the company see major revenue gains for the coming 18 months? Which of these areas provides the best prospects for significant new additional revenue over those -- over that time period? It's DelCool and Eclipsys in bedding. It's Eclipsys moving into athletic gear. And one that you're hearing a lot of new energy around, but it's not a new technology except for the new formula we're releasing is FR. Expect significant growth from FR. DelCool is still in its early stages, but it's become quite popular in the retail space and top of bed. Actually, we're live in multiple pillow products right now, and that's gaining traction and it's growing month-over-month. And there are mattresses, multiple mattress projects right now where DelCool is going into that. And so -- and kind of to make that an easier scenario to understand, PCM is generally $3 to $5 a mattress. DelCool is going to be in that $20, depending on how they use it and how much they use in the mattress, $20 going up to $40 a mattress. So you can see the revenue per unit in a mattress launch is significantly higher. And then in pillows, it's in that $10 to $20 range. And a lot of these pillow programs, some of them are new launches and they're small retail ramp up growth. And then some of them [Technical Difficulty] large pillow programs that can be 100,000 to 500,000 pillows a year. So landing one large pillow placement with a DelCool technology and 0.5 million pillows a year. From a revenue standpoint, it's a game changer for Alexium. And we have more than one of those in our pipeline. Not to be too specific and disclose too much, but we're active on those types of [Technical Difficulty] We have a good chance [Technical Difficulty] actual success in business that we already have in our pipeline. And then back to the salesperson question, adding the new business development professionals only assures an even higher percentage chance of success. So the activity is there, the opportunities are there. It's all about execution and conversion. Any other areas we're making progress which have been removed from our current works development? Let me read that again. Any other areas where we're making progress? Yes. One of the things I want to tell everybody here is, when I talk about a percentage of focus in core markets and breakthrough and adjacent, I wanted everybody to understand what that really means. That means we're going to be disciplined on the opportunities that are in our pipeline and converting those and putting most of our effort into -- my grandparents used to always tell me, eat what's on your plate before you go back for seconds. At Alexium, we're going to eat what's on our plate first before we go back for seconds. And what I mean by that analogy is, we need to deliver on where the investment of time and money is in our technology and those projects that are in our pipeline. But as a secondary initiative, not a primary, where it doesn't take away from our main focus. We're going to continue to innovate. We're going to continue to work on the next things. And for us, that's going to be FR into adjacent spaces. It's going to be cold chain packaging. And then behind that, we want to move Eclipsys and other thermal regulation, like PCM into other temperature control and thermal regulation markets where there's significant volume and requirements. And that could be electronics, it could be construction, it could be automotive. But we're not going to go into those spaces right now and dilute our core and core markets and our fundamental focus on delivering where we've already invested most of our time and money. So there are new developments coming, things that have been removed. Look, we have been down some blind alleys over the years, and we've learned from that. And we're [Technical Difficulty] but I can tell you they really weren't around technology. They were sometimes around business practice and around the business approach [Technical Difficulty]. We're moving closer to the end user, we're moving closer to the brand, we're moving closer to the people who actually draw the dollars in for this product and not trying to work through a lot of intermediaries or middlemen. And we want to control our destiny. So that's really around driving contracts, making sure we're calling on the right people who can make the decisions of adopting our technologies and just doing a fundamental better job selling Alexium than selling Alexium's technologies. Lastly, 2 more progress in roadblocks and other product development and top tier shoe suppliers. It's early in that Eclipsys is going to be something that's not one-size-fits-all. Sorry for the pun for shoes, but it's not cheap, right? So we need to be in brands that are willing to pay for technology. Now, I'm not talking about the new superconductor or anything radically expensive. We're talking a couple of bucks, a pair of shoes. And not every shoe brand out there is willing to spend a couple of bucks on a pair of shoes, believe it or not. And they may be selling a pair of shoes for $100, and they won't absorb a little bit of cost in that. Now, some of their competitors will, and they won't even bat an eye at a couple of dollars for technology that differentiates them, likely can allow them to sell it at $20 to $50 higher per pair. So shot selection, picking the right customer, picking the right target is key. So we've called on a lot of shoe suppliers, and not many of them, excuse me, not all of them, are willing to pony up for technology. So we'll skinny the fill down to those that are and spend our time where there is. So that's the roadblock. Progressing our efforts there I've already spoke to tonight, so I won't repeat that. But we are moving down the path, and every step we make forward with them emboldens us to go after more. But we're starting early on with them. When we put the technology on the table, we show them the testing that we've done. We talk to them about their appetite for cooling and thermal regulation. We're putting pricing and terms on the table right upfront, as I said earlier tonight, to make sure that we don't get into a development and a long business cycle just to get to the end of it and don't tell us it's too expensive, because that would be a waste of everybody's time. So there's some business discipline around how we approach that, that will increase our percentage chance of success. Last on the list that was submitted early. I think there's some that have come into, but developments with respect to top of bed and accessories. Look, we are active in DelCool and pillows, and we expect a DelCool a top of bed. So a mattress topper that sold as a separate SKU than a mattress. We expect that to launch in the second half of this calendar year. The pillow sales for DelCool is ramping, and we do have a customer going live under a national brand. And we will announce this also in one of our coming webinars. With an Eclipsys pillow, believe it or not, and they've suspended Eclipsys in a fiber-based pillow. And to our surprise, we never thought of this design. The results, thermal regulation results were very good and very compelling. And that's interesting because Eclipsys is one of our more expensive technologies, and a fiber fill pillow is probably one of the lesser expensive pillows out there. But the combination worked to get the pillow in the right retail price point. So we expect that to launch also second half of this year, and it could end up in a large pillow placement program with some of the numbers I mentioned before. 2 questions have come in regarding the FR socks. Are you able to provide an estimate of the size of that market in the U.S.? And could you comment on the decision to go with an exclusive agreement for that new chemistry? The market size is, that's hard for me to pin down. If you'll allow me, we'll come back and address that in the next presentation. But I can tell you the biggest piece of the market for the most disruptive area of that market is the bed in the box. So, foam mattresses that are stuffed into boxes and sold generally less than $1,000. And that level of mattresses, I can send you guys all an ISPA reports, and that's International Sleep Products Association, where they track all the sales in the market by market segment, by mattress type, foam, spring, textile, et cetera. But it's in the millions of mattresses, okay? And if we're putting our chemistry into, say, just the sock, call it, $3 a sock. We only have to have a piece of that market to generate significant sales growth in the $5 million to $10 million a year range. So sorry I can't be more specific. I'll have to do a little research there to give you the actual size of that market, but it's substantial for small business like Alexium. The decision to go on the exclusive agreement with a new chemistry is quite simple. We were challenged by this company to solve a problem they had in their product line to get ahead of a regulatory curve for a large market that they might lose because of the type of sock they were using before. They asked us for exclusivity. We asked them for a commitment on price and volume. To get that exclusivity, they said yes. For us, the reason we would do that is the speed to market. They were willing to make a running change on the products they're using in the short-term, meaning in the coming months to get to that volume. So we would start and start to ramp that volume with a volume commitment with terms upfront. So we did it on a price and volume commitment that will expedite Alexium's chance of near-term revenue. That's why we did it. That's a 1-year scenario. So after 1 year, it's free market. We'll take it to the rest of the market, and by that time, we will have ramp sales around it. It'll be popular in the market, it'll be seen on a premier brand. And that should seed the opportunity for us to take it out and really saturate the market with it from there.

But we haven't finalized that yet. We're still working on finalizing that agreement. That's why we haven't announced it yet.

Yes. We granted the -- well, the exclusivity agreement is there, but that's not the supply agreement. So the exclusivity terms will reside in the supply agreement. We're now in the next stage of testing. We got to prove, make it through all the bed burns, make it through all the testing of the chemistry. Then the running change would start after that. In parallel, we'll be negotiating supply. We would be negotiating the supply terms. That agreement would be material price and volume, and we would announce it to the shareholder base at that point. Last question. Some companies with low share prices conduct a share consolidation, especially before a capital raise. This usually results in further capital loss to existing shareholders. Is management intending to undergo a share consolidation in the foreseeable future? Simon, I'll ask you to weigh in on that one.

Yes. No. The answer is no to that one.

Okay. Looks like there's no more questions. Unfortunately, this is one of these meetings where I'm speaking into a camera and can't see your faces or wish you all well. I hope all of you are doing well, that you're healthy. Hopefully, your families aren't going through COVID. We've seen a resurgence of COVID here in the States. Seems like we're getting past that now that here in the Northern Hemisphere where the trees are blooming and it's starting to get warm out, but hopefully everybody's healthy out there. We really appreciate your support. Those of you that are just tuning into Alexium, we appreciate your interest in the company. Again, we're going to be doing updates more frequently and send your questions in in-between. We don't have to wait for an investor presentation. Send them through our investor portal. Could you tell them the website.

It's [email protected] is the e-mail address and the website is www.alexiuminternational.com. So...

Yes. Please keep the questions coming and we'll do our very best to keep you informed. And again, we'll be doing these presentations at a more regular cadence. With that, we'll get a wrap and I'll leave the close to Mr. Moore.

Thank you very much, Billy, and thank you, Lisa. And again, we hope this is the first of a number of these style of engagements with people. We'll provide a recording and put it up on the website so people do have access to it. Again, as Billy said, if people have questions, please don't hesitate to e-mail those into the company and we'll endeavor to answer them at the next get together in this particular format. We envisage that that's probably going to be in conjunction with the 4C release, which will take place probably in the third full week of April. But the company will make an announcement well ahead of time on the ASX of when the 4C will be released and also the details for the associated call. And with that, thank everybody for their time, and wish everybody a good day here in Australia and a good evening if you're dialing in from the U.S. Take care. Bye.

Thank you. Take care.

Thank you. Bye.