FGR 13.5% 21.0¢ first graphene limited

NGA - Release of PureGRAPHTM, page-19

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    Ok, my takeouts from the meeting. Apologies up front on the format (and any typos), my notes are all over the place following the question time (and I have a hangover).

    10 people in attendance which was more than they expected and had to go and get more chairs as people arrived. Peter, Craig and co secretary Nerida there. Warwick was an apology. Peter opened the meeting commenting that usually these types of meetings are just a formality and it was pleasing to see more turn out than expected.

    Official part (passing of the resolutions) only took 5 minutes then an informal question time of over an hour. Lots of questions from most in the room. Both Peter and Craig made a point of saying they obviously could not disclose anything sensitive to the market but we're happy to expand on questions. They also both made a point that with this technology in its infancy there were many companies trying to be first movers and take a competitive advantage and as such they were party to many Non Disclosure Agreements and therefore somewhat frustrated they couldn't share more with shareholders at this point. They also made a point that they understood some frustrations with timelines but with an emerging technology/product not everything goes to plan and not everyone involved has the same sense of urgency. They made a point a number of times of the need to hold people they were working with to account on timelines. An example of this was monthly update meetings with university personnel.
    The end game for the company is to achieve income from I/P and secondly by producing and supplying graphene. The ultimate outcome is to be the supplier of the graphene to the users where we have I/P interests therefore getting two income streams but there will be commercial outcomes where we are only involved in one of these.

    Comments were made that dealing with universities certainly give access to many extremely intelligent individuals however it has been realised that timelines must be managed by the company very strongly as our commercial objectives sometimes don't filter down on a laboratory level (if you know what I'm getting at).

    -Share price. commented that they as both significant holders would love the price to be much higher however it must also be acknowledged that we are well above where we were a year ago and still a very new entity in the scheme of things and many of our competitors prices are sliding. Our German listing has been a success with over 50% of holdings there. It was asked if they had considered a UK listing due to the GEIC relationship. They are thinking about it but no decision at this point.

    -Cash position. Peter has achieved some significant R&D refunds which have helped and cash on hand is sufficient for the near term. They are very aware of the need to drive commercial outcomes. No further expansion on this. My view is we are a start up in an evolving tech so it is not unrealistic that we may need to raise in the future.

    -Sales. The have been some minor sales for testing purposes (I think they stated a figure of $800 per kilo/$200k per tonne) and a significant amount of free samples had been supplied to a variety of industries. Some of these include carbon fibre, fibreglass, plastic, rubber, steel coatings, poly ropes and others I didn't jot down. They made a point in stating we are in the very early stages of the graphene age. Craig also mentioned that there were many misconceptions about graphene such as having a limited shelf life. He stated this was completely untrue. Graphene samples they had produced a year ago remained as effective today.

    - Firestop. Testing has proved the effectiveness of the product and it is awaiting the certitification (I think he said in the UK). Industry feedback has now seen them trying different mixes in an effort to improve astetics as all the current competitor products are "lumpy" and when covered in a gloss coating are not attractive. This is not an issue when 50 meters up side of of building but is an issue when used in areas at eye level (doors etc). They feel that by improving in this area it gives them yet another competitive advantage. They are also working on the waterproofing effectiveness to again give a further competitive advantage. I missed part of the q and a on this due to taking a phone call but from what I can gather many of the current fire retardant coatings then need another waterproofing coating when used externally. Happy to be corrected if I'm wrong.
    Another competitive advantage here was the weight advantage of our product compared to competitors. Two examples they used was in fireproof doors, usually they are very heavy and become almost unusable for elderly or children at some point. The other example was ship engine rooms where contractors are trying to save weight.
    The other point they made was our product gave off far less toxic fumes than our the competitors. This was a significant benefit to first responders (fire fighters).

    -Concrete. Ongoing testing is happening and so far the results are very promising. Made a point is saying the testing is far more involved and timelines greater than many expected. Each test batch using different graphene sizes and concentrations have to wait the 28 day curing time before being tested then adjustments made to the mixes and another 28 days and so on. They see a significant take up of this tech in the future.

    - Polymer coatings. Testing is being done on pipe linings and excavator buckets in the mining industry. The aim being to increase wear resistance. Discussion went on for about 5 minutes but I missed most because I had to take a call.

    -VFD. To be honest they lost me on this but here goes: ongoing testing on various levels but the most exciting was use for the production of graphene oxide. Current methods of production utilise 7 parts acid (some thing nasty a couldn't spell) for one part product. Environmental concerns are very real with this. The VFD method is almost green in comparison. A unit will be supplied to GEIC as well.

    - Mining. On care and maintenance as the market is aware. Sufficient raw product has been stockpiled at Henderson and they can continue to buy from the govt owned mines in Sri Lanka if needed or commence mining at very short notice and with limited spend. All tenure requirements are up to date and not at risk.
    They didn't say this but I got a strong feeling that mining is very much in our past and we are a graphene producer and I/P owner going forward and maybe we are holding these mining assets as a competetive advantage of limiting supply of vien graphite to our competitors?

    - GEIC. They were both very excited about this. The facility is still being commissioned but they likened it to plastics in the 50's. Again another call left me with minimal exposure to the conversation. They are supplying graphene to the centre and are considering a production unit.

    - Henderson production facility. Continued fine tuning of the production process continues to happen. The release of the "Puregraph" product range is an example. Feedback from potential sales customers has always been the end user needs to be confident in the consistency and specifications of the product. They see the ability to market the three grades as a first mover competitive advantage. They also have the advantage with our production facilities and superior vein feedstock of customising batches in large quantities if required.
    Stated they are Working with some local businesses but again NDA's prohibit any further information. My take on this is Henderson is one of Australia's major ship building areas so the opportunities are large here.

    I had to leave before the meeting ended so there was more that maybe Stingemore could expand upon (or correct my notes in need).

    The overall feeling I get is there are many exciting things happening. Timelines are proving longer than expected and the directors are very upbeat but clearly frustrated at this. Also they stated they are very aware of the criticism regarding communication however so much of the business is commercially sensitive and they are bound in many cases with NDA's.

    I attended the meeting with some negative feelings as to "slow progress" and lack of clarity (I've been invested since day 1) and walked away with a renewed positive outlook. I trade a fair bit in the speccie end but think this is one for the long term and serious multiples of the current price.


    Hope that helps guys.
 
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