A Letter To Investors

August 9, 2016

Dear Shareholders and Interested Parties,

I am pleased to share the Moelis report of August 2, 2016 and provide you with information on Alexium. We have seen significant progress, are executing on our plan and are excited about our future.

Moelis initiated coverage of Alexium in March 2016 with a “buy” rating and 12-month target price of $1.20 for Alexium; the most recent report reiterated that rating and price target and described the company as “a strategic investment leveraging increasing scrutiny on stringent fire regulations and banning of toxic and harmful chemicals in traditional brominated and halogenated flame retardant products.”

Alexium was added to the S&P Dow Jones S&P/ASX 300 index in late March 2016. We were pleased to be in the select group of ten growing companies that were added to the index.

Alexium holds over 20 patents, and the Company’s innovative, environmentally friendly flame retardant (FR) treatments have received industry-wide recognition since the Frost and Sullivan Technology Innovation Award in 2013. In March 2016, Alexium was recognized as a winner of FabricLink’s Top 10 Textile Innovations for 2015-2016, joining the ranks of other major industry players that have won the award including: 3M, Outlast, Mt Vernon + Carhartt, Schoeller, and more.

Continuing our tradition of innovation, we have just launched a new product, Alexiflam NF, which is a durable FR solution for cotton and cotton blends. Alexiflam NF is superior to the current FR treatments in the marketplace and is ready for sale into Europe.

Alexium’s suite of environmentally friendly FR products have a wide range of applications in the military and commercial sectors, and the Company is in partnerships to further advance the technology for military uniforms through research and development efforts. We are well positioned as recent legislative activity in the U.S. indicates that there is a movement toward protecting service men and women with environmentally friendly FR uniforms.

The shift toward safer uniforms and workwear extends beyond the military. Firefighters are concerned about the risks associated with hazardous FRs such as Decabrom, and Dr. Bob Brookins, Vice President of Research and Development, recently presented Alexium’s safer FR alternatives to the International Association of Fire Fighters (IAFF), and additional meetings are planned.

In addition to the military sector, Alexium serves the transportation, outdoor fabric, bedding/decorative and the coatings/polymers market, and we continue to expand our targeted industries as more companies look for environmentally friendly technologies. During 2016, we have secured new business in a number of sectors including interior furnishings, floor coverings, fiberglass epoxy, tents and bedding.

Within each sector, we are serving an increasing number of companies. For example, Alexium is now working with all of the major players in the bedding industry due to our Alexicool technology which makes fabrics cool to the touch. (For more information on our markets and solutions, please click here.)

To increase efficiency and better serve our growing customer base, our new headquarters in Greer, South Carolina is now being completed. The facility features state of the art equipment, and we plan to move in in late fall.

I am pleased with our accomplishments to date and the Company’s upward trajectory. If you are an Alexium investor, I thank you for your support.

If you’re not currently an investor, I would encourage you to consider doing so. We would be happy to provide more information on Alexium. Please see our investor presentation or contact Melissa Kelly directly.
Sincerely,

Nicholas Clark
CEO