Ann: Notice of Annual General Meeting and Proxy Form-XPE.AX, page-14

Hi Fastha et al,

Agree that Resolutions 10 & 11 should be voted down, as it effectively gives Athan and Co. the power to embark on a 208m share (Resolution 10) + $25m (Resolution 11) shopping spree without any further approval from shareholders.

Note: in addition, the company already maintains the ability to issue 15% of its issued capital without shareholder approval over a 12 month period (pursuant to Listing Rule 7.1). So surely that is enough?

Therefore giving management free rein to dilute our existing shareholdings by a further 40% (or $33m within 3 months, based on the current share price and market cap.) is not a wise idea IMHO, as it is almightily excessive and totally unnecessary at this early stage of the game.

If the SP was closer to 25c for example, then I might hold a different view as it would mean only a further 300 million shares or so (i.e. 208m shares + 100 m shares at 25c per share) could be issued, resulting in far less dilution.

But as it stands, management needs to be able to demonstrate to all shareholders that they are (collectively) capable of growing the SP organically - and can do as they say as per their 'start with what we have' spiel in today's presentation so that we don't all get diluted to kingdom come.

If you are a current shareholder, you have the power to VOTE NO to both Resolutions 10 & 11 if you agree with the above.

Also note: Listing Rule 7.1A requires Resolution 10 to be passed as a Special Resolution, meaning that it must be passed by 75% of the votes cast by members entitled to vote on the resolution.

By contrast, Ordinary Resolutions (as in the case of Resolution 11) are not specifically defined in the Corporations Act and require only a simple majority to pass i.e. more than 50% of shareholders present at the meeting, either in person, or by proxies. Therefore every vote is important.

Finally, the revenue amounts of $2.5m and $5m that have been proposed to trigger Milestone A and B cash bonuses for Athan Lekkas and Martin Despain (refer Page 9 of 43) are far too low IMHO, particularly as we are already providing an incentive for Eddie Jackson to achieve $3m revenue this year i.e. from JCT alone.

Therefore I intend to write to Chris and John asking that the proposed triggers be either raised to $6.5m and $9m respectively, or that revenue generated from both JCT and Codium not be included for the purposes of calculating revenue triggers for Athan's and Martin's cash bonuses.

Again if you agree, then feel free to send Chris Wood and John Schultz a message asking them to amend their current proposal, as the cash bonuses do not appear to be dependant on the approval of Resolutions 7 and 8.

Also, I am perplexed as to why Athan should receive an additional cash bonus for raising $5m. i.e. Is this in lieu of either he or his company now being responsible for future capital raisings (of at least $5m) or will he be simply giving Seneca and co. the nod to conduct a CR when he feels the time is right? If it is the latter then I will most displeased (particularly as his bonus is not conditional on achieving a set strike price for any future CR) and I intend to make that a point for discussion at the AGM if it is not addressed prior.

Management must understand that whilst we (as shareholders) generally support their endeavours,
it is not a free for all.

Regards
Elpha

p.s. just booked my flight to Adelaide so hope to see some of you on the 30th Nov.