CEO's Introduction

Our product platform is built on long, strategic and purposeful research. The company team, together with BTH, has developed techniques of active noise reduction for multiple applications including internal and external metal cutting. Acticut is seeing an increase in the number of interested customers worldwide. Our products are already familiar within the industry and a coordinated marketing strategy will help increase sales of its products and services in 2007 with further expanded sales in 2009.

Acticut International has presented its products in key countries and at several international conferences and exhibitions. A very positive interest has been demonstrated by potential customers and the product supremacy over competition has been confirmed. To secure Acticut’s business concept, the techniques have been patented and today, Acticut International owns a very comprehensive IPR portfolio with patents and licenses. The core IPR has been tested in patent court versus Sandvik Coromant. As a response, we questioned core Sandvik patents. This summer, we had a positive response in regards to defending our patents but also in regards to our questioning of the Sandvik IPR. As a result, Sandvik has requested a Letter of Intent and strategic agreement that was signed during summer 2007. This has proven the IPR strength and further increases the core patent value.

Acticut International’s product portfolio is expanding and the sales of services, educational programs and VibraTools Suite™ is increasing worldwide. The headquarters for Acticut International AB is located in Falkenberg, Sweden. At this time, the Acticut International group of companies has signed multiple agreements with globally established sales groups. We have dedicated facilities in our offices so that presentations can be made for both international and Swedish customers and we have excellent hotels nearby. Falkenberg and Ljusterö provide us with excellent opportunities for international seminars and educational programs. A number of these are planned for 2008. We participate at key international conferences together with our key partners and teams.

Our company group offers internationally competitive system solutions, several powerful software products, passive and active methods for reducing vibrations, in addition to a very competent staff with high levels of experience and expertise in sales, marketing and business administration. In addition to this, we have a carefully selected network of subcontractors who supply us with system components. Acticut International’s overall portfolio provides for a very profitable business model in a huge and receptive market. Acticut’s technology will be the future standard in the cutting industry and Axiom’s monitoring system have already been recognized as a leader in the market. Our VibraTools Suite™ and ROBOX™ systems are new tools that has already created a great interest amongst those people looking for, and desperately needing an open platform suite of software products sound and vibration applications.
To deliver the products to customers, and to enable expansion of the company, some capital infusion is being sought, focused on sales and marketing plus cash flow handling. Furthermore, it is important to expand the patents and licence rights. Today, Acticut International has more than 15 applications for new patents under review. To accomplish this expansion, there is a need for money infusion, with clear milestones versus S&M accomplishments. With the current order portfolio, the team is almost self funded, and will be in a shortly.

We are very optimistic about the future, which will provide good returns for the shareholders in Acticut International AB. We have, in a short period of time, shown that we can expand the company. The Acticut International team has been awarded six prizes for its achievements at this time. The group’s order portfolio is very encouraging and many strategic contracts with excellent profit potential and expansion possibilities have been signed. The group is working towards a clear expansion of the current sales volumes. Currently, the possibility of joining the Swedish stock market is also monitored and considered and preparation work is performed.

Rolf Zimmergren, CEO