replacing the board, page-6

Abu,

Thanks for the suggestions. I appreciate that.

I started my investigations into this matter last year when I realised that the product is reasonably ok and have good chance of success with moderately reasonable returns but a management straight out of the standard mismanagement at maximum cost manual.

I procured the VCR constitution. I bought the shares register updated on 30-09-08. I researched Corporations Act 2001. At that time, I thought of going to the newspapers with an advertisement on what needs to be done. I realised I may actually spook the investor backlash and kept quite.

Unless I missed something, I could not find the way to call Extraordinary General Body meeting. It won't be needed anyway. If the SPP is successful, the notice of the resolution can be issued in January 2009.

Please correct me if I am wrong here.

To call the new meeting we need signatures of either 100 shareholders or 5% of votes being polled in a meeting. Once the notice is issued, the company had to call the meeting within 21 days and the meeting can be held within two months of serving the notice of resolution.

I have personally about 0.19% of shares on issue right now. I applied for the SPP.

I have contacted a few other large (one larger than mine) shareholders who hold their own reservation about the proposal but will be willing to put forward a resolution to change the remuneration clause of the company.

I believe the time for remuneration changes is over as the new remuneration will only be approved in 2009 AGM. So the best way forward is for the shareholders to come forward to run the cost controls. Frankly, if nobody is forthcoming, I have no problem throwing away my A$400,000 salary (I am not a CEO of any company except my own company) and run this company on a salary of A$150,000 as I ran my other projects. Below budget and well ahead of schedule. My benefit is each cent increase will be added benefit to me. I am not greedy.

I know it is difficult to achieve the below budget and on time in this case. I worked in Australian Federal government (5 months) and know how they work and assume FDA is no exception.

I believe that the share price is languishing because of the following factors:

1. Uncertainty how long these deep discounted new share issue will go on.
2. Poor communications to the market
3. Lack of faith in the management team
4. Perceived lack of efforts to reduce the cost.

Looking at the costs of the company, they have fixed costs at the present (before the 10 Million dollar cost cutting) of A$40 Million and a per device variable cost of A$ 30,0000. With my experience working in one of the companies that Elizabeth Chaired, I am pretty confident, the fixed costs can be brought down to anywhere between A$20 to A$25 Million.

That cost reductions actually will let the company to be self sufficient until FDA approval is decided. That is a big risk (and should have been the actual risk in investing in this company) whether FDA will approve the product or not. Once the market sees the revival of this company, the share price will be automatically priced to the reasonable value.

As I mentioned earlier, I do not have experience running a company at CEO level but have run my multi million dollar projects below budget and ahead of schedule.

I also believe that the experience of running a company at the CEO level is not needed to run this company. This company needs somebody with really good commonsense and willing to put in time to work out the cost savings by reducing wastage in expenditure. I understand most of the FDA submission activities are carried out by the specialised consultants and the scientific body presentations are by the eminent doctors and scientists.

So if other shareholders are willing to give this a try, then I wish to go forward with this proposal.