Technologies Sonomax Inc SXHHF

Sonomax - BUY

[GACAB]

The recent press releases regarding Creare and Racal Acoustics Limited are I believe to develop products for sale into the military markets.  Good news.

However, the recent analyst report by Fabrice Taylor forecasts 2011 sales of $13.5M (historical Revenue unless I am mistaken has never been greater than $1M approximately) which is made up of $5M sales to the industrial market and the remainder to the consumer market (Fabrice believes these consumer sales to be optimistic).  This sales forecast is obviously based on the assumption that Sonomax will sign a licensing agreement with an OEM for both these markets (none of which have been announced as yet).

Management have stated to me that the licensing agreements with the OEMs for these two markets are currently being negotiated with announcements expected ASAP and by September at the latest.  As these are the agreements which will drive the FY11 sales, I believe these announcements (if they are achieved) will be the catalyst for significant moves in the share price of Sonomax.

The agreement with Creare and the term sheet with Racal is good news but is probably more important for growing sales in 2012 and beyond.

I therefore believe, that Sonomax is a good BUY at today's prices (even though they have appreciated lately) to get in before any potential announcements of agreements with OEMs for the industrial and Consumer markets.

This is only my opinion of course.