Ann: Company Update, page-109

Hey Gallea

I understand your frustrations with the whole CN debacle, nobody in their right mind can consider it anything but and it is very disappointing that the BOD did not acknowledge the impact at the EGM, it would have been the smart thing to do BUT they didn't. We can bang on about this until the cows come home but all it will do is raise your blood pressure and solve nothing.

Like you I will be looking very carefully at the remuneration report and it will definitely be a NO from me at this stage unless there was to be a significant change to the BOD salaries going forward.

So on the main points we agree but I cannot agree with some of your other issues

ADRC has not been the be all and end all, Marty made it very clear in discussions around the AGM that the real jewels in the crown are RML, Xped app, gateway and cloud services, this was reinforced in the update. He went to some length to explain his reasoning but many do not seem to want to listen. People need to get over ADRC as it is only one small element in the most competitive segment of IOT so it will take a long time to get traction. Work with the OCF is ongoing and it appears to be positive but you need to remember that Xpe is such a small fish in a massive pond and the big sharks are not interested until you can show proof of concept, hence the JCT venture, this has been gone over time and time again but we still come back to it. Show us your tech works in the real world thats what the big guys want, thats what Marty asked of Xped when he was still with Intel.

People keep hoping for an agreement with GE etc, well that will probably not happen, Xped are way to small for GE to deal with, but guess what, the Debapp will be able to control the Hue lighting, the key advantage of open source, the DebApp will work with most things once the software work has been done. They have already tested 80 products to date and still have a long way to go but they are progressing manfully.

XPED is a SOFTWARE company primarily and as such they need programmers hence the increase in salary costs, part of the overall cash burn, YES I know about the BOD salaries, but other expenses have to be incurred. So lets get over this part for gods sake.

Yes, I got burnt just as badly as yourself with regards the SPP, in fact a fraction more, but your assertions about the Directors buying $250K at less than a 1 cent is just BS. The approval was for them to participate in the FUTURE share placement, it has not occurred yet and if the share price is still at 1 c when this happens then we are all stuffed.

NO, the Directors will not be eligible for the bonus options, except for Athan, who already holds shares, as the FUTURE placement has not occurred yet for them to have any shares. Could they be doing the placement in this 2 week period, possible, but it would seem highly unlikely, as there are no rumors from the sophs about any offers being put to the market place.

Agree the bonus options should have gone to existing holders, not for those after the consolidation, but there are very few shares being traded at the moment so I cannot see anyone currently taking a big position. To be eligible they would have to have the shares purchased by the 19 June, which is not much time after Xpe comes back on line on 13 June. If there is a bit of a buying frenzy between these dates then it will be very interesting indeed.

I agree with some of your points but I do not agree with some of the inaccurate statements you have made as they are not supported by facts.

Just my thoughts

Regards

Rayda