Ann: La Jolla funding update , page-20

Newland Hi - I did note your comment should have differentiated my statement.

I like your shoe analogy.

I agree with your frustration but dont believe this share is only worth 0.1c. The problem is the damage that has been done by LJ is big and its got us , with a little help from a few bad past decisions to where we are today. I reckon a consolidation will result in another 40% off the value and yes I must say that that is the market we are in and the past as told in the AFR. However I must also say that out of present management who are there only Mr Kemp and Mr Kiddle were party to the poor decisions outside of getting LJ involved. So the Mr G and that issue , the AM , the failed promises and other issues cannot be laid at KR , JE or the new Financial person BH.

I would think that upon walking in JE could not just walk into the C group and access the chequebook and I would think they would want to see what they had got themselves into before putting too much in. I think the $6million contract was a great way for the company to make sure they passed the insolvency tests. However a short term destruction of value.

The issue of shares is the most expensive form of finance and having to give a 15% discount at the end of that was an added concern. Had the consolidation gone through the LJ share issues and ongoing value destruction would still be continuing. Essentially having started at a much higher value it would be travelling along the road to where we find ourself right now. The 0.1c no bid is a logical outcome for any share that carries on for any length of time with the LJ process. You know that they will make a profit each month of 15% that overhang must suggest that unless buyers keep stepping up to the plate the price is forced down. They have no interest in the long term value of the shares either as the discount endures all the time. You cannot, in a micro cap, be absorbing what is a net sale position of $117.64K (say on a $100K each month) as its issued at a 15% discount. ( 100/85). Assuming your market cap is $5million that's 2.34% per month to sell. Its far too big an overhang IMO.

The implications of no consolidation were never anticipated by any of us to be a 0.1c share and no bids.

I cannot see how anything that is currently happening to this company is reflective of the actual business being carried out day to day by what is largely a new management team.

Yes Newland you are correct in that JE did say break-even December so lets see. I am not as unhappy as I was feeling about this.

The AFR article did not seek to attack new management as I saw it but did rake up the skeletons of the past. In fact they stated that they believed the process worked that's good and that it still seems a good idea.

I hope they seek to place 15% of the equity @0.1c as that should on a 4.5billion company raise the $700K that we are short from LJ. Hopefully another cornerstone shareholder could be found.

Oh well time to wash away the week with a cold one.