DISCLAIMER
This document is not for distribution in the US and alone or with collateral documents does not constitute an offer or an invitation to participate in the issue of securities of Alexium. Any statements, opinions, projections, forecasts or other material contained in this document do not constitute any commitments, representations or warranties by Alexium or its associated entities, directors, agents and employees.
Except as required by law and only to the extent so required, directors, agents and employees of Alexium shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatsoever nature arising in any way out of, or in connection with, the information contained in this document. Further, should any of the information contained herein change, Alexium does not have any obligation to inform recipients of this document. This document includes certain statements, opinions, projections, forecasts and other material, which reflect various assumptions. The assumptions may or may not prove to be correct. In particular, there is a risk that the timing, scale and delivery of some of the outcomes referred to in this document will not eventuate.
The use of the name or mark of any specific manufacturer, commercial product, commodity, or service in this publication does not imply endorsement by the United States Air Force (“USAF”).
All figures in US dollars unless otherwise stated. Information provided as at 28 November 2011.
Email: [email protected]: www.alexiuminternational.com
Operating Headquarters: Alexium Inc.
8 Distribution CourtGreer South Carolina 29650 USA
Phone: +1 864-416-1060Fax: +1 864-551-4555
Alexium International Group Limited
Suite 7, 85 Forrest StreetCottesloe WA 6011 Australia
Phone: +61 (8) 6162 1358Fax: +61 (8) 6314 1623
INTELLECTUAL PROPERTY PORTFOLIO
INDEPENDENT ANALYST REPORT
RB Milestone Group, a New York based equity research and corporate advisory firm, issued an Independent Research Update Report in October 2011. A copy of the RB Milestone Update Report has been posted on Alexium’s website, along with our annual financial report.
Alexium expects that the European Patent Office will grant the patent for the “Method for the Attachment of Silicon Containing Compounds to a Surface and for the Synthesis of Hypervalent Silicon Compounds” in December. This addition to the patent portfolio will further enhance Alexium’s position to commercialize and license RST technology.
In addition, Alexium filed a US and a Patent Cooperation Treaty Area (PCT) patent application for the treatment of paint additives. This technology was invented by the Air Force research Laboratory at Tyndall Air Force Base, developed under the Cooperative Research and Development (CRADA) agreement that Alexium has with the US Department of Defense, and applied to Chemical-Agent Resistant Coating (CARC) coating systems as a means for creating low surface energy surfaces.
A key distinguishing feature of the RST over conventional surface treatments we wish to highlight is the “shrink wrap” effect. Certain fibres such as aramids, polypropylene and nylon are relatively inert and don’t have very reactive surfaces. Commonly, conventional textile coatings rely on chemical bonding with the surface of the material which can be challenging without these reactive sites.
RST’s coatings, on the other hand, can covalently bond to the surface of the fibre or - when that is not possible – is able to form a nanoscopic intractable coating or “shrink wrap” – around the individual fibres. High molecular weight polyethylene (HMWPE) and aramid fabrics for example, are being increasingly employed in composites and other technical applications, areas where we believe RST coatings could be highly beneficial.
TECHNICAL CORNER
ALEXIUM – THE SMART SURFACE COMPANY
ALEXIUM OVERVIEWAlexium International Group (“Alexium”) is an international Company listed on the Australian and Frankfurt Securi-ties Exchanges (ASX: AJX) (E7T.F). Based in Perth, Western Australia and Greer, South Carolina, Alexium holds exclusive global commercial rights to Reactive Surface Treatment (“RST”), an award winning technology devel-oped in US government labs. Alexium was established to exploit commercial opportunities for the RST technology
ABOUT ALEXIUMAlexium International Group (“Alexium”) is an international Company listed on the Australian and Frankfurt Securities Exchanges (ASX: AJX) (AX:AJX). Based in Perth, Western Australia and Greer, South Carolina, Alexium holds exclusive global commercial rights to Reactive Surface Treatment (“RST”), an award winning technology developed in US government labs. Alexium was established to exploit commercial opportunities for the RST technology globally supported by a strategic commercial and technological relationship with the US Department of Defence (“DoD”).
CHAIRMAN’S MESSAGE
IN THIS ISSUE:
• Chairman’s Message
• Independent Analyst Report Update
• Executive Management Highlight – Dr. Bob Brookins
• Intellectual Property Portfolio
• UIPE & US Defense Spending Bill Update
• Technical Corner
• Product Development• FR Treatment Nylon• Composite Fibers• Next Generation CB
Repellency • Ballistic Fabric
Treatment
ISSUE #03 | NOVEMBER 2011
NEWSLETTER
In this edition, we take you through four separate products, highlighting the benefits of the Reactive Surface Treatment (RST) process. You will see that there are important “green” benefits in the RST technology which help give our products advantages to meet the new environmental standards being set around the world for protective treatments.
Welcome to Alexium’s third newsletter.Our technical team led by Dr. Bob Brookins has been very active in product development and this edition of the newsletter focuses on Bob, his team and the exciting work they have been doing for commercial product development. Bob and his team have also been fulfilling US Department of Defense purchase orders for technically advanced textile treatments during this time.
The process is fast and environmentally friendly, enabling single or multi-functional coatings to be applied to most fibres, almost regardless of their surface chemistry. The process is based on organosilanes – silicon-containing chemicals that have both organic and inorganic functionalities in the same molecule – which are already widely used as coupling agents across a range of industries and commercially manufactured by the likes of Bluestar, Degussa, Dow Corning, Evonik and Wacker.
Aramid Fibers “Shrink-Wrapped” with Alexium RST Treatment
We are awaiting resolution on the US budget before the Uniform Integrated Protection Ensemble (UIPE) tender process can proceed under the 2012 US Defense Budget, which we address in this edition. All our current collaborations remain on foot, including SSM Industries, for which a one year extension has been agreed. This agreement enables us to use their facilities with an Alexium RST microwave unit embedded as a backup for our Greer Facility and also enables SSM to continue evaluation of RST for their products. Our next edition will provide an update on collaborations, including any material information announced on the ASX in the meantime.
We are also looking forward to Alexium having an ADR (American Depositary Receipt) listed on the OTC QX Stock Exchange in December. Bank of New York Mellon will manage the ADR, whilst Merriman Capital Inc., a US Investment Bank, will act as our first market maker and Principal American Liaison (PAL). We expect to see significant increased liquidity in our daily ASX share trading volumes resulting from this ADR program.
I am also pleased to announce Alexium has been invited to present at the 2011 Livingston Nano Technology Conference in New York on December 7th. This is New York’s premier nanotechnology conference, attracting large numbers of corporations, investors, government representatives and scientific leaders.
Gavin RezosChairman
For
per
sona
l use
onl
y
Alexium continues to await a decision on the Uniform Integrated Protection Ensemble (UIPE) acquisition program from the US Department of Defense (DoD). The UIPE program continues to represent a significant revenue-boosting opportunity for the company. It is likely that the UIPE program award notice is being held back due to the absence of a signed Financial Year 2012 (FY12) defense bill. The presidents’ FY12 budget, submitted to Congress in spring of this year, allocates US$1.5 billion to chem-bio defense, a strategic priority; however, Congress is still debating and negotiating the final FY12 defense bill - with pressure to reduce overall government spending.
In the meantime, to keep the government going, agencies are currently operating under Continuing Resolution Authority (CRA) and preparing for worst-case budget scenarios. Under CRA, typically no new programs are initiated. Once Congress passes the final FY12 Defense Bill, the UIPE program timetable can be progressed and awards made.
Dr. Brookins is the Chief Technology Officer (CTO) of Alexium. Dr. Brookins received his PhD from the University of Florida and his graduate work was in the synthesis and characterization of conjugated polyelectrolytes and polymers.
Upon completion of his PhD, he worked at the US Air Force Research Laboratory at Tyndall Air Force Base where he developed decontamination methods for chemical and biological threats and novel synthetic routes for functional surfaces. Dr. Brookins leads Alexium’s R&D and technical product development activities.
Dr. Bob Brookins, Alexium CTO
EXECUTIVE MANAGEMENT HIGHLIGHT
UIPE & US DEFENSE SPENDING BILL UPDATE PRODUCT DEVELOPMENT
PRODUCT DEVELOPMENT (CONTINUED)
Alexium’s business model is based on licensing the RST treatment technology to commercial partners, and to jointly develop differentiated products for both the military and commercial sectors. The new production unit at Greer is serving primarily to demonstrate the technology to prospective licensees, optimise various treatments for customers, and enable us to offer turn-key systems for licensees operating in full-scale production environments.
Much progress has been made over the last nine months by the development team, led by Dr Brookins. Product development cycles typically require multiple test/evaluation/optimization cycles to find customer acceptance. Exciting things are emerging from the product development pipeline.
(1) Composite Fabric Treatments
Alexium has applied RST’s “shrink wrap effect” to treat composite fabrics and is undergoing a number of customer evaluations. The goal of this program is to demonstrate an increase in the adhesion of composite fibers to the resin matrix. Increased resin-fabric adhesion is expected to result in fewer mechanical failures from inter-laminar shear, a common issue in composite manufacturing. For heat sensitive composite fabrics such as polyolefins, the “cold” microwave process also offers distinguishing capabilities over conventional heat curing techniques, which can damage heat-sensitive fibers. Alexium is optimizing these treatments and working on production scale-up.
(2) Eco-friendly Flame Resistant (FR) Synthetic Fabrics
Environmentally friendly flame retardant coatings (FR) for selective synthetic fabrics is where Alexium feels the RST process offers exceptional opportunities. Stricter environmental regulations globally have meant there is now an urgent need for an environmentally friendly non-halogenated surface FR treatment. Due to the absence of an existing market solution and due to market demand for topical FR Nylon treatments, the company has invested considerable resources over recent months to optimize RST treatments. A new application like this demands exhaustive testing to ensure regulatory compliance and that the inherent properties of the fabric are not compromised after the treatment. Alexium is working to optimize the FR treatments developed to date and scaling them to the production floor. We are seeing some exciting progress and have developed a non-halogenated, eco-friendly FR treatment that preserves good fabric feel. The military demand of FR treated Nylon, used in the cold weather clothing systems, is estimated at several million linear yards annually by itself - with many other opportunities in non-military markets.
(3) Chem-Bio Treatments for Defense Applications
RSTs technology is rooted in military applications and was originally developed by the Air Force to provide the highest liquid repellency protection in chemical and biological threat scenarios. Alexium continues to respond to the military need by developing solutions that go far beyond current military capabilities and conventional repellency treatments. Alexium is currently filling a material purchase order from the US DoD and is continuing to pursue other DoD customers in chem-bio defense. The newest repellency treatment has been optimized to repel Chem-Bio (CB) agents and also includes CB neutralizing agents. Through this effort, Alexium has produced treatments that keep out agent simulants, such as tri-butyl phosphate (TBP) for days on a lightweight, breathable fabric. This compares to “seconds” without treatment and “minutes” with a conventional durable water/oil repellency treatment. Technology demonstrations such as this are key to future DoD acquisitions.
(4) Repellency Treatments on Ballistic Fabrics
Alexium is conducting small production runs for a number of customers who will evaluate the ballistic performance advantages of Alexium’s repellency treatment. Alexium is offering an environmentally preferred (C6) alternative and applying nanoscopic coatings that are expected to improve ballistic performance. The patented microwave-driven chemistry enables the nanoscopic coatings to be applied onto a wide range of fibers in a continuous reel-to-reel process.
Composite Fiber for Alexium Treatment
Treated Nylon Sample After Vertical Flame Testing
CB Agent Simulant (TBP) Droplets after Four Days
Para-Aramid Fabric Used for Ballistic Protection
Dr. Brookins and Laboratory Technicians Amanda Walker-Burkett and Jonas LaRue in the Development Laboratory
For
per
sona
l use
onl
y
Recommended
