Xeros Technology Group (LSE:XSG) — Interim Results Investor Presentation

0:03 Good afternoon, ladies and gentlemen, and welcome to the XEROS TECHNOLOGY GROUP PLC Interim Results Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply select Q and A, type the question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard.

0:34 I'd also like to remind you this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Mark Nicols, CEO and Paul Denny, CFO of XEROS TECHNOLOGY GROUP PLC. Good afternoon, guys. Yes, good afternoon, and thank you very much for the introduction and also the ability to have a conversation with current and prospective retail investors. That's the first time we've had the opportunity to do so and Paul and I are very much looking forward to doing so. So we have our interim results, which are not financials heavy, but we also have a pretty important business update to share today. It's a short presentation, but I do request that you do submit questions to us.

1:24 It's a great opportunity to do so and we'll do our very, very best to answer them. It it's probably worth me saying right now that a number of the agreements that we have have fairly strict confidentiality agreements. And so we'll do our very best to give the fullest answers we can, but obviously sometimes within the limits of those confidentiality restrictions that we've got. So I'm going to get straight into it. Please do put your questions up on the Q and A panel. We do have two questions that have come in, one around the licensing deal structure and about new wins. And the second one is about how we're going to use our funds, how long they're going to last and timing to break even. Paul will cover that further on in the presentation that we've got.

2:15 So I'm going to start at a high level. I appreciate that we've put a lot of information out in the public domain, some of it in fairly dense documents like the circular for our fundraise at the end of April, which you may or may not have had the opportunity to read and digest. To the degree that you have, that's great. But to the degree that you haven't, if at any time you need some extra clarification of what I'm saying, please do, as I say, ask that as we go through. So what we are in XEROS is a pure play sustainability and environmental reduction impact company. And over the last nine months, we've added to our portfolio really important application in the field of microfiber filtration, which is a really, really significant pollutant in our world today and becoming increasingly understood as something that needs to be abated.

3:14 And what we will do today, given that most of our press previously has been around our XDRAWM and XORP technologies that we use in a number of applications. This is a new addition to the portfolio and I will spend a bit of extra time covering that today. But in combination, what we have is the ability to transform the clothing that you wear both during its manufacture and during its lifetime of ownership. And I hope you come to appreciate that as we go through. In 2017, we started to evaluate how we compared on the sustainable development goals that the United Nations put forward correctly so for implementation by member states by 2030.

4:01 At that time, we were predominantly influencing the water objective, but since that point and we've highlighted them on the right hand side here today, you can see that we now have a broad sustainability environmental impact beyond a pure water play and actually across a number of the other SDGs which we haven't highlighted. But it just goes to reinforce hopefully the point that I made is what we do is around environment and sustainability. And if that's your motivation in terms of an investment, as I say and to repeat myself, we are a pure play in that regard. Over the last year, eighteen months, we've been working on moving from a company which was profoundly integrated in vertical businesses actually touching customers predominantly in The United States, predominantly in the commercial laundry business, which was a very costly and experienced force, but one which gave us all the credentials which enable all the businesses that we're now licensing today.

5:04 And the migration that I'm pleased to announce today and indeed progressively over this year is that we've now achieved that state of being a 100% licensing company. And one which are now has a commensurately low cost base, one which is transformatively lower than the one that we previously had. So it's right that I have a little introduction around COVID. When we announced our fundraise at the end of April, we thought that we might have a three, six month impact of COVID. We weren't quite clear how it would affect our own operations, but quite clearly, we knew that it would have some impact. And that turned out to be about three months both for us and for our licensee partners.

5:51 Perhaps a little bit better than we expected, but our licensee partners have been incredibly active and really committed to executing the licenses in spite of the disruptions that they've had. And in our commercial applications, which are commercial laundry and I'll talk a little bit more about that. And in terms of our garment finishing applications and say, we'll cover that as well. We thought for the three licenses that we had in aggregate in those areas that we would be in the market in this quarter having had affirmation and trials with customers with our OEMs in the previous quarter I. E. Q2 that has slipped one quarter. And so imminently those three licensees will be placing machines in the market and we'll start to have royalty incomes in terms of full market launch in Q1 next year. So that's a delay, but it doesn't significantly impact our financial forecast which Paul will come on to later.

6:57 The other significant application that we have with our Xtraum and XORB technology which is separate to the XFILTER technology is in domestic washing machines. And the good news is in that consumer durables in India, China and indeed Europe have not been impacted by COVID. The demand is still there. A number of you will appreciate that everybody buys a washing machine when one has their current version broken down. It's an impulse panic buy and therefore requires perhaps not a lot of discretionary spend and therefore the demand has held up. So the good news is that our licensee in India, IFB has not changed its timing to market in terms of its domestic washing machine and that will be in the middle of next year.

7:50 Now, the added platform technology of filtration has been a very significant year for us. I mean, significant. We've been working on this particular issue for five years. In my humble opinion, we are world experts in the creation of microfiber pollution from washing of clothes and also its abatement. And earlier this year, the University of Plymouth identified our technology, our device as the most effective on the planet. And in addition to that, the University of Antwerp published a study which we'll see a bit of later whereby we identify it identified 11 criteria that a consumer would seek from a device that would provide that solution to that pollution And we ticked every box.

8:41 And so I will talk a little bit more about that as we go through as I say, because we perhaps haven't given as much airtime to that previously. And we've been working hard on making sure our filtration IP is up to the task to support and defend the revenue stream from that activity going forward. Our cash burn is down. We have a very significant amount of funding in the bank, which we believe is sufficient to take us through to breakeven. And as I say, I'll ask Paul to take us through that towards this end of this presentation. So for those who don't have a long history of understanding perhaps some of the details of the business, if we look at the the top section here and I've mentioned the the players that we have in terms of garment finishing, that's Ramsons in South Asia, leading player for garment equipment in that territory.

9:38 Commercial laundry, Sea Lion and IFB,

9:42 they are the leaders in China and India respectively for commercial laundry and they're moving in with the timescales that I previously mentioned. As regard the license model for that particular market, it's it's not particularly complicated. For every machine that those licensees sell, they pay us a royalty when they've sold it. And that's a bit in the sort of high single digit numbers. But the other thing which we'll come on and show is the fact that our technologies, the Xtrauma and the Xorbs, create a lifelong ongoing benefit to the users of those particular pieces of intellectual property under those licenses.

10:28 And we get an ongoing royalty for the deployment of those XORBs over the lifetime of those machines. Having established what the new value pool creation is by those technologies through those licenses with those customers and there's enough in it to share it between the customer which gets the license share and there's about a 50% share which is then paid back to us through the medium of us selling those XORBs to those licensees. I've covered a lot of ground there but hopefully that was fairly self explanatory. The same technology, XORB PLC used in domestic laundry, we have IFB entering the market as I mentioned with a smaller version of a washing machine in the middle of the year and they will pay us a royalty based upon the number of machines and a percentage of that machine sales value.

11:23 Now that is commercially sensitive, but somewhere in our averaging out of this, you'll be low mid single digits in terms of the pricing that we would get back in terms of the royalty. And the average machine price in these jurisdictions is about £350 and the market size of IFB in India is about 600,000 machines growing at 20% per annum. And Medea in China where we don't yet have a contract, but we have a joint development agreement which we're working through a lifetime testing before production prototyping exercise with the crossover there being a point where we would hopefully enter commercial negotiations and principles which have already been agreed.

12:16 Their production output is 16,000,000 machines. And they would have the same licensing royalty mechanism as we would that I just described for IFP. And then last but certainly no means least in our commercial X filter, that's the commercial size of filtration development that we have. We will have a product in the marketplace for those large machines next year and that is a product that we're developing one of the top three commercial laundry equipment companies in the world. And that will be an optional product on every one of their devices within a certain size range. And we have had pre negotiations to some large degree on how much that will be, and it will be percentage of the price that they charge to their customer.

13:08 And hopefully, in the very near future when we reproduce this slide going forward, there will be another bar across the bottom which will be for our domestic filtration and we will give a bit of bigger expose on that in the next few slides. But suffice it to say, there's about 850,000,000 washing machines on the planet. There's about a 110, 20,000,000 sold every year. They're creating about half a million tons of microplastic pollution, let alone non synthetic pollution. And if what we believe is true and we have every reason to believe it would be, is that we would be in the market starting from 2022 to have our devices deployed within washing machines for us to receive a small royalty having already market tested what the price receptivity would be for such a device, which is something in the region of £20 to £30 So that's our portfolio and Paul will explain later how we see the royalties starting to accrue opposite the cost base that we've got, which as I've explained has reduced somewhat.

14:27 And I won't spend too long here if I may, but you would have heard us talking about the fact that we have hard benefits, quantified hard benefits in terms of water, in terms of chemistry, in terms of energy, in terms of effluent, in terms of what's in that effluent going down.

14:47 And that is a very, very direct cost to people who use our technology and therefore reduction in that. But what's worth sharing here and now is that our technology, our licensees provide value beyond that and it is significant. And so for example, in our denim finishing, which I wish we'll show you a video of in a in a second. We have the capacity to increase load in the machine, therefore, improving its capital payback. We have the capacity to reduce cycle time. We have the capacity to reduce the amount of water post cycle reducing time, time, and cost.

15:34 In our in our domestic washing machine, we will increase the life of your washable wardrobe by more than 20%. That reduces the cost and the environmental impact of the clothes that we wear by an enormous margin. It takes 3.7 cubic meters tons of water to make a pair of jeans before you start washing it and 2.7 tons of water for the T shirts that you have. And in our filtration technology, it has the capacity to reuse water therefore improving the benefits from that technology in and of itself. So I hope that gives you a flavor of the fact that we have an aligned portfolio around the clothing industry with hard environmental and hard cost benefits, but with other benefits that once we have our machines properly working in the hands of our licensees, there will be two things that happen. We will prove out the value benefits that you've seen there on the

16:38 second line of the benefits case. And we will have also proven out the technology to the degree that we will then step into the other markets that we sequenced in terms of where we want to have similar license agreements with the selected partners that we're already starting to window in those selected geographies. So rather than just show you a lot of slide wear, I thought it'd be really helpful just to to for you to get a visual understanding of what we have. Now what's in front of you and you're gonna get fifteen seconds of it is what's called our X drum. And inside that X drum are XORBs.

17:25 This is the five cubic meter drum. So there's five cubic meters of space in there.

17:32 And that XSG drum built by Ramsons is now in the Ramdam laundry, which is a systems company to Ramsons. And they do garment finishing in the denim world and also garment dyeing. The significant customers such as Levi's. And right now, as we speak, this device is being used for trials, not necessarily opposite Levi's, but for brands that you would know and understand. And currently, that drum would probably have about a 150 kilograms of denim within it, number one. And number two, instead of using those XORbs, it would use pumice.

18:18 Now one fifth of pumice of the pumice used becomes redundant, broken up, no longer usable on every cycle. A 150 kilograms of that pumice for five cycles in a day, which is about what these use is about a ton of pumice. That pumice is a pretty bad pollutant once it's been used,

18:42 and that's about a hundred to a hundred and twenty dollars a ton. And if it's disposed of properly, there's 4 or 5 extra dollars to do that properly. And so what you have in terms of what you will see now is a real live example of a commercial application shortly to go into the market with named customers who we now know and have agreed with the licensees. There's similar machines going into the marketplace in India and China for commercial laundry, albeit smaller, but with these premises. And what you're going to see are those XORBs going around and what happens is they get collected in our patented lifter design, those three bars and get stored in the back. And we've got, as I say, quite a lot of intellectual property around that. And the last thing I would say is in the garment world,

19:36 it is quite normal to fit these devices as a retrofit. So they don't have to buy a new machine to enjoy all these benefits. And both the retrofit option in the garment world and the new machine option will be that that's offered imminently to that into that market ahead of the ahead of the launch q '1 next year. So we just have fifteen seconds of this so you can get a real view and understanding of the tech.

20:28 So thanks very much for showing that. So here's the expose before we get on to the numbers on filtration. Everybody on this call, myself included, is contributing to microfiber pollution. It is in every organism within the trophic range. That is the food chain. And it is in your body right now. It is in the bottled water you drink and it's in the water that comes through your taps. It's in the Coca Cola that we drink and it's in every seafood that we eat.

21:05 And increasingly, the world has come to understand that this is obviously something that just simply has to be abated. But there's something in the region of 40,000,000 tons of synthetic fiber used in clothing in the world every year. 60% of garments have synthetic fibers within it and they're not going to go away. They're performance materials that we all want to wear,

21:32 including me who needs a bit of elastane in his jeans in terms of, you know, perhaps a flexing waste from time to time. But the serious part about this is that the only sensible place to remove this pollutant from the aqua cycle, knowing that wastewater treatment plants can't remove all of this pollution, they remove some but not all, is that you need a device in your washing machine. Those 850,000,000 machines that across the world creating half a million tons of this pollution. And in April sorry, in July of this year, we were accredited of having the very best device that could do that, not just in terms of the microplastics, but the non synthetic fibers as well.

22:19 And we've continued to increase our intellectual property since that report in terms of having a device which is pushed even further forward than the limits and the sizing in terms of the gains that we have here. And it is the only in machine device that has been designed thus far in the world. And we believe strongly that our intellectual property is robust around it.

22:47 France, just slightly ahead of the EU, has said that every washing machine will require a filter inside it if it is to be sold in France by the 01/01/2025. Our ambition is to have this in the marketplace in conjunction with the machine OEMs and pump manufacturers in 2022. And we have been invited to join the standards and solution group of the French government to bring about the introduction of a product which meets the standard. And the truth will be is the truck the product that makes the standard at the highest particular point that is achievable will be that standard that becomes regulated.

23:38 Commercial progress, as I said, we have one of the world's largest commercial laundry manufacturers already working with us on a large scale design. So we've had an accreditation in terms of a company of scale and substance and credibility wanting to work with us. And if I just move on quickly, I'll give you a sense of the scale of the problem and also how consumers feel about it. Now what you'll see on the left hand side is the scale of the problem in the different geographic areas, both in terms of how much is produced and how much is released into the environment. Won't spend too much time on it, but I'll leave you to ponder why North America,

24:24 which has one third of the people in Europe, has doubled the emissions. But quite clearly, Europe is legislating for this and the and the countries on this planet which are increasingly well, to have been known to be high legislators around

24:43 pollution and the environment. The first one is Europe. The second one is North America. The third one is increasingly now China. And we have a solution that has the capacity to reduce the green bars, the blue bars, sorry, and therefore, the green bars or the green bar elements by 90%. And at this point in time, we see no other competitive product in the marketplace that has the capacity to do that nor has the intellectual property shelter that we have. So that was what I just wanted to cover on the previously, let's say, not so well trailed and perhaps not so well publicized XSfiltr.

25:33 So, Paul, can I hand over to you, please, on the financial side of things? Okay. Thank you, Mark. Good afternoon, everybody. So on the financials, I'm gonna spend most of my time focused talking about cash, plus the current cash position and the projections for cash and the the runway to EBITDA breakeven because that that's the area of major focus. The historical results for the six months to June 2020 are pretty self explanatory in terms of the turnover reducing as a function of moving out of the direct operations, but correspondingly, the cost base and the cash coming down. And when we were talking to shareholders in April, back of the results and with the fundraise, we were operating at a cash burn of 600,000 per month. And we said at the time that that will come down further.

26:30 It has come down further. We've got a 45 head count employee base now. We've got a cash burn of 400,000 per month. And I'm just gonna address one of the pre pre submitted questions, which was around what can we expect from the to see from the cost base, and how does that fit with the company's expectations of future growth? So addressing that, our cost base now is fixed for the foreseeable future. It's the 45 employees that we have are sufficient to execute the technology transfer for the portfolio of licensing agreements we have as well as moving the joint development agreements through to full contract whilst also preserving some know how and sort of bench strength capability to allow us to go and talk to a potential new partner. So until such time as there is material income from our licensed partners coming in, there won't be a change in that cost base.

27:38 Now in terms of the runway of that cash, the reason why we we we still stand behind the guidance of reaching EBITDA cash breakeven by mid twenty two is as follows. And there's both a kind of quick sort of back of envelope calculation that I'll do for you as well as a more sort of qualitative side to it. So in terms of the numbers, we've got 6,200,000 of cash at the end of August. Now with the, r and d tax credit that we've submitted for the previous tax year plus the r and d tax credit for the year that we're currently in, we have very high confidence that we will receive about a further million pounds from HMRC this year and before the end of next year. So £7,200,000.

28:33 With the cash spend of 400,000 a month, that's eighteen months worth of cash. Eighteen months from the end of August takes us to the end of February twenty twenty two, which is almost to the point of cash breakeven. But that is also a scenario where there is not one penny of income from our licensing partners. And it also that no income from XSG which is currently not in our forecast that Mark mentioned before. And it also includes no upfront income from any from any of the licensing partners that we would move from JDA to commercial commercial agreements. So a scenario of no income at all from our licensing partners through the balance of this year and next year is clearly very much a a kind of real worst case.

29:23 And if we were to be in a situation where license income was not coming in as fast as we would wish next year, we do still have the option of taking that headcount reduction down further, reducing our cash burn, extending the runway. That That is is clearly not our our current strategy at the moment because if we were to cut our headcount out further, that really would that really would impair the, you know, sort of the human capital base of the company, which is actually crucial for future growth. Now in terms of how we see the license income coming in next year, you know, the analysts, brokers, forecasts that are out there have a forecast that we agree with of £1,200,000 of turnover net next year.

30:15 And even with the COVID related delays that Mark mentioned, we are still very confident that Celine, Ransoms, and IFB, with the fact that they are weeks away from shipping machines to trial affirmation customers now and then having a full market launch with paying customers in q one of next year, we we are are very confident that they that they will hit the targets that that we set. And to put some scale around that, to hit the 1,200,000 turnover number, we need to get combination that looks some something like 200 commercial laundry machines in the market by the end of the year from from a combination of IFP in India and Sea Lion in China, 20 denim machines from Ramsons in the market by the end of the year, and domestic machines with more likely IFB, but potentially, Medea and well as well in the region of 30 to 40,000 machines by the end of the year.

31:27 Because with the with the royalty arrangements that we have in place, that order of magnitude of machine implementation from our license partners through the course of next year, that keeps us on track with the forecasts. Now almost certainly, that mix that I've run through there, it almost certainly won't end up like that. But what I haven't focused in there at all, because we don't have a specific forecast against it yet, is anything from XSGROUP. But the real point around this is that the future financial success of XEROS isn't solely focused on one application or on one licensed partner. We've got a portfolio of of agreements with a number of different partners in a number of different applications in a number of different parts of the world with more coming on track.

32:26 And we need, you know, I won't I won't say only one of them, but we need a number of them to come good for us to be on track. So we are not dependent on a single application. And that was certainly the position the company was in three or four years ago when we embarked upon this journey to move it to a broader licensing company. So with that, I will reaffirm the statement, and there's a question that's come through, which is about the guidance. I reaffirm the statement that says, from where we are now, we believe that we are funded through to EBITDA cash breakeven. Clearly, it's all about keeping track on this closely month by month, quarter by quarter.

33:16 And I should just obviously mention the caveat that you would expect me to mention that, you know, the impact of COVID nine nineteen, perhaps in India, in particular, is still out there. That still does have the the the the risk around further delays in the market. But with the experience that we've had over the last six months, we're confident that that won't have a further negative impact. So with that, I will hand back to Mark. Thank you, Paul. Yes. You answered the first question. I thought it might be best just to run through the questions that have been kindly submitted first, and then we'll just summarize with our outlook. So is there any risk that XORBS escape from the machine into the water system?

34:08 Clearly, we have principles inside our organization is is not to be in any way contributing to environmental harm in anything and everything that we do. The machines are developed that they cannot escape into the water system from within our device. The areas which they can do that is specifically in the drum seal and we have developed drum seals that prevent that migration into the effluent stream. And you'd be pleased to know that in the domestic version, we've we've got filed intellectual property around that as well. The the main concern and the question we always get asked is how how do these XORs, these small spheres, polymer spheres get captured and recovered and it's taken a very, very long time, but the way that the cycles and the machine is configured that in an average wash, you you would have less than five. So you do get two, three or four, but the the work that we've done with consumers is they're very happy to deal with that challenge, you know, the old one or two in your pocket in order to reap the benefits in terms of the sustainability, the cost reduction, those lasting longer and that obviously is going to be trialed and tested in

35:38 the Indian market first. So no is the answer. And the second part of that question is, well, you use plastic, don't you? So do bits come off? You come contributing to the problem. One of the very, very first things that we did to establish, we needed to establish is actually, we've got statistic and scientific evidence behind this is because Bear with us one second. Looks like we've March may have a little bit of a technical issue. Let's give him a couple of seconds just to jump back in. Hold on. Just do bear with this one second while Mark just reconnects. Looks like he just had a technical issue there.

36:26 Paul, perhaps you could just have a a scan through some of the other questions and and just pick up some of those while we get Mark back in, please, if that's okay. Yeah. Sure. Thank you. Sure. Well, perhaps in terms of the questions, the balance of the questions are for Mark. But let me just take this opportunity to address one of the points that's on the Outlook side. Hopefully, you all will have seen from the announcement this morning, we are planning to do a consolidation of our shares before the end of the year. That is effectively a purely sort of administrative exercise because we have a very high number of shares in issue, nearly 2,000,000,000 shares in issue, which is a function of the number of previous funding rounds that we've done. We are going to be going through an exercise to consolidate those down. We will publish more information on that and put a circular out. Yeah. So I'll give you a call. And as I said, that that won't have any impact on the value of of the company.

37:37 It's purely just to tidy up the number of shares. So it looks like Mark's back, so I'll hand back to Mark. Mark? Can you can you hear me? Can you can you hear me? I've got reverb now as well. Got reverb. Yes, Mark. Have you just turned the sound down on your computer? Yeah. And then sound on. Done. Can you hear me now? Please do. Yeah. Sorry. But as as sorry. But yeah. Hang on. Yeah. Hang on. As luck would have it, my Internet dropped. As luck would have it, my Internet We seem to be getting the reverb, Mark. What I might ask you to do, if it's possible, is if you click on the microphone icon on the top of the screen icon on the top screen, and then it will have a dial in option.

38:38 If you click the dial in option, there will be a telephone number along with a dial ID and a passcode. So that's at the top of the panel. Above track, q and a polls, and handouts, there's a little microphone. If you click on that. Sorry, Mark. I've just put you on mute. Can you can you hear me now? I can hear you, sir. Yes. Without reverb. Without reverb, sir. Yeah. Thank you. Thank you for that. And sorry to investors for for cutting across the presentation. What I can't see now is the questions. Okay. There might be a little blue bubble at the bottom that says chat. No. It's it's just loading. No. Haven't got them. So if you could read the questions out to me, then I will be able to answer them. Know where I was in terms of the last question is that we we don't release any more particles into the effluent stream from our XORBs.

39:40 The amount of microfiber production from using our technology is actually reduced. So any amount is added from our XORB being used, the total is actually reduced and then obviously XFilter can deal with the rest. What was the next question, please? Paul, I don't know whether you want to just pick up on the questions and just post them. Obviously, I just don't wanna come across questions perhaps. Okay. So, Mark, there was a question on, are our licensed partners trialing any other techno knowledges? A very simple answer to that, not in the fields of our intellectual property.

40:28 Okay. So there there are a couple of fairly lengthy questions with I shall summarize them down to the core questions. So there's a question about the fact that in March, we announced the appointment of Donald to help embed our our technology into the supply chain to major apparel brands and manufacturers. And the question is asking whether we can share any update as to what he's helped us with. Yeah. By all means, having Donald Van Eckmeyer from the Kofra organization, which clearly is CNA top 10 retailer in in Europe, has brought to us a lens on the apparel market, which is really important to understand the evolution of that market and also to help us as a as a technology company understand the product benefits that we bring such that we can maximize those benefits and also talk to manufacturers and brands in a way that they understand.

41:42 They also this is a thematic invest investment for them and clearly their reputation and in terms of their organization which they're part of fashion forgot for good gives us a unique view of all the, let's say, all the more viable technologies that are coming into the market space in the apparel world, a number of which we've identified as being complementary to ours, which enables us to work through that. And I suppose the last benefit is is that there are strategic investors that doesn't pose a threat in terms of wanting us to favor them in terms of any particular application or favor them in terms of any value add that's directly attributable to their organization.

42:38 So yes, it is a vibrant relationship, number one. Number two, and there is a number of dialogues that they help us with the product service offer in the apparel market. And last but by no means least, they've been really, really helpful in us understanding the impacts of COVID both short and potentially longer term in the clothing industry. So that's that's that's an answer to the value added role that Donald plays within our organization. Okay. Thanks. So there's another question, which I'll I'll answer sort of the first part of it, Mark, and then so that you can add to it. So the question is around our announcement in January 18 at the Consumer Electronics Show that we had that we had a transformational technology for domestic washing machines.

43:29 And the question asks for whether there's been any fur any further developments since. So kind of the context around that, the announcement that we made at CES in January 18 was not that XEROS had a domestic washing machine. We never announced, and we never intend to manufacture our own washing machine. The announcement was around the technology to fit inside washing machines made by the leading brands of the world, and that that was the XTRUM and the XORB technology. And since then, very much part of the licensing model that the question references, we we have licensed the technology in a commercial agreement to IFB, who are the leading domestic washing machine manufacturer in India. And as Mark said earlier, they are going to market with a product in mid twenty twenty two.

44:27 And we have a joint development agreement with Medea, who produced 16,000,000 washing machines. They are the number two manufacturer on a global scale, and we are working towards having a commercial agreement with them. So just wanted to clarify with the with the question there that we didn't announce our own washing machine. We announced a technology to go in other people's washing machines, and the progress is as I've just mentioned. So, Mark, I don't know whether you want to add anything. No. I couldn't have answered it better, Paul. Yeah. It was a it was a prototype technology at that stage. Okay. And there's just one final question, and I suspect the question the questioner perhaps missed the earlier part of the presentation, but I'll just run run run through it again. Because the question asked with around 500,000 cash burn a month, how does XEROS expect to get to mid twenty twenty two without having to raise additional funds?

45:26 So that that's the point around the fact that our cash burn is a 400,000 a month. We've got 6.2 in the bank. We will get another million from HMRC for r r and d tax credits. $7.2400000 a month is eighteen months of cash, which gets us to end of Feb twenty twenty two. And that's a scenario with no income from our licensed partners in the balance of this year and next year. And clearly, that is very much a worst case. On top of that, there is the very strong likelihood of XSG filter income to come in there. And there is also the likelihood of upfront payments from some of the parties that we will sign agreements with. And even with all of that, should there be a delay in license income coming in, we could choose to flex our cost base down even further. But we we that is not our current plan because if we if we cut if we flex our headcount down further, we would be impairing our capability for future growth. So hopefully, hopefully, that re answers that that question.

46:39 So I looked through that, Mark. There weren't any other questions. Thanks. I think I'm fully back online. And Perfect. I think you actually have gone through all the questions there, Mark and Paul. Of course, investors can still submit questions and the company will be able to review those. So please do so. If there's just any others that you may have seen guys that have come in, do feel free to answer them. So to to summarize then, as we said we would after the q and a Fantastic. A really, really important three, six months for for us. We've after announcing we were gonna do this in 2017 and and and starting the progress in mid twenty eighteen to this new model, having put new products in the portfolio in 2017 and on new applications rather than proving them out.

47:34 We've got to a pivot point in the history of the company with our licensing deals, both in the commercial framework for short term implementation and in the not too distant future in the domestic side, and of course, whole new platform technology, which we've been working on for five years in filtration. We we are going to keep our burn rate, you know, where it is. We've got a long runway. Next year is really about setting a steady firm base of proof and then increasing our licensing deals into the other geographic areas that I as I mentioned earlier, we've identified and also started to shape the list of licensees that we want to work with. But we have to get things working and working well to have the conditions precedent to engage and execute, but with learning curve. So execute more quickly and more effectively than the the license deals that we've currently got.

48:40 So that heavy lifting of getting to this point is done. The heavy lifting is now about execution. And as Paul said, working closely over the next three months to get these machines on the ground and working and starting to pay us our royalties, steadily grow that next year and then the fast ramp in 2022 when hopefully we will have yet another license income of substance from our filtration technology in the domestic market. We do plan late this year, early next to have an online market update, hopefully using this technology and obviously we'll get the invites out for that. And of course, as and when we get the appropriate news flow that is of significance, we will release that to the market.

49:32 And I just like to say, you know, really welcome the opportunity to have this online conversation and thoroughly appreciate the fact that you've taken time to register and time to log your questions. I do know that it's a difficult world out there as a small retail investor to be able to get access and for us to be able to answer questions because quite clearly, it's just not in a it's just inappropriate to do so in in chat rooms. But we do we do look at those from time to time. And I do feel it's a good opportunity just to share what we're doing to the degree that we can. And we will look to do this as frequently as we can. But as I say, hopefully, with some more news under our belt, we'll be able to do something along these lines for our current and effective retail investors again. But thank you once again.

50:25 That's great. Thank you very much, Mark. Thank you very much, Paul. And thank you for updating investors today. That was a great run through. Could I ask investors not to close the session as you will be automatically redirected for the opportunity to provide your feedback? As soon as the webinar ends, you can just wait a couple of seconds. If you've accessed the meeting directly from our website, the feedback page will appear. If you clicked on the link in the email, you'll be asked just to log in and give your feedback. It takes just a couple of minutes. And thank you again, Mark, for coming back in. It's always good in the live environment. It shows we're live, which is a great thing. So on behalf of XEROS TECHNOLOGY GROUP, an investment company, thank you so much for attending today, good afternoon. Thank you.