I've been a strong supporter of CFO and believe CFOAM has...

I've been a strong supporter of CFO and believe CFOAM has great potential... but it's hard not to be disappointed by this Quarterly.

The modest increase in revenue is welcome, but the perfunctory one-pager at the front of the 4C, with it's casual reference to exiting the ASX, is not. This half-baked statement makes it seem more likely that Alain left in frustration. His efforts to move CFO away from composite tooling appear to have come to naught and there is little to suggest that CFO will do more now than serve as a manufacturing arm of Touchstone. The short-medium term future of CFO isn't looking much like the Investor Presentation of November 2018 at the moment. Which brings me to the Convertible Note issue.

The CN's are redeemable at 18c/share, but they are subject to a variable (not fixed at the time of issue) exchange rate. That makes the issue of dilution rather uncertain, but the fine print does allow for a two for one AUD/USD exchange rate floor, which would result in a very substantial  issue of new shares (38+M). That all makes sense from the point of view of attracting investors to take up CNs, but given interest payments on this and the significant other debt the company holds, and the complete silence on new customers, things start to look rather shaky. 

It's possible that the US Navy trial will soon result in a major new order to drive CFO's short-term manufacturing success. That would be welcome relief for long-suffering holders and help justify the significant - continuing - build up of inventory in spite of the apparent absence of new customers... but it still won't address the issues that prompted Alain to want to move the company into the much larger addressable markets of transport and construction where CFOAM applications might have really lit a fire under the company. That didn't seem too much of a stretch in the Presso only a few months back in November.

I've seen some very impressive and detailed updates accompanying recent 4C; updates that demonstrate the commitment of management and Directors to the success of the company and their commitment to shareholders even when they can only report ordinary revenue results. The apparent lack of interest here is in stark contrast to those reports, and to the updates that were being issued when Alain was at the helm.

I've reduced my holding of CFO for now, but retain enough to keep interested in the company and its future. Here's hoping for better communication and some good news for shareholders from a company that was - only a few short years ago - held up as a star IPO (where even TC was prepared to lay out big at a SP of close to 60c for a cut of the action). GLTAH R-7