Scheme of Arrangement, page-5

Perhaps i can add a few more points and observations, and maybe because its the weekend go off on a tangent just a tad.

But first as I like to do I will put in a disclaimer! While I'm certainly not the oldest shareholder of SMN (apparently by a country mile eh JB? - and I'm not referring to JB HiFi!), I do suffer from a fading memory (I'd like to think its more related to the miles covered clouding my small memory bank than Alzheimers), and thus the gist of what I say is more relevant than the actual examples attached!

My comments on this potential threat of losing our grip on the CVM technology through SMN isn't directed at any individual party (including Drake), but certainly having a substantial shareholding obviously does increase the opportunity for such party to facilitate the process, particularly if they have a representative on the board. (But Drake certainly has a valid argument to have such representation even though its very much a divisive issue)

In the case of Spookfish I quizzed the Man Dir, both at an AGM and on a number of occasions privately, regarding Eagleview being granted a 15% shareholding in return for placement funds that kept the company in funds whilst it sought the STC approval from the FAA with respect to its camera placement outside the aircraft fuselage. The MD assured me that Eagleview was simply assisting with funds but the quid pro quo was it would enable Eagleview to use the camera technology in its American operations on strictly commercial terms. Just like in the case of SMN Spookfish was frustrated by the never-ending saga trying to achieve FAA approval. And I'm sure that frustration enabled Eagleview to enable the shareholder support required for the Scheme of Arrangement process! A lesson to be mindful of!
As an aside if you've followed Nearmap, NEA, history (which of all things is currently under friendly takeover offer from a large USA private equity fund!), the Spookfish camera technology was developed by irate NEA technical staff who fell out with the NEA board, and left to establish Spookfish - and funnily enough Eagleview (which now has Spookfish camera technology and is the biggest competition for NEA in the USA) has taken on NEA (May 2021) in a legal battle over patents wrt aerial roof reports!

Getting back to SMN, and the similarities with Spookfish, both have been frustrated by lengthy FAA process to achieve STC approvals. Both companies share prices suffered as a consequence of the delays, despite the superior technology that each company owns and holds patents in. Each company has/had an USA Substantial shareholder (18% Drake/15% Eagleview). Based on my observations at AGM's for Spookfish, and on HC for SMN there is considerable pent-up frustration by shareholders (including myself, for BOTH companies).
In the case of SMN we have the added complication of a boardroom spat - yes its been brought to a head by Drake, but actually it pre-dates that based on at least a couple different issues - the Tulip Bay (group of supporters and) related royalty arrangement, and the Toby Chandler ("TC") (to be clear JB) issues (which have now evolved to be the Perth outcasts!). Just on TC I always found it difficult to rationalise how the CEO of a Company could continue to work on a number of deals outside the Company related to other ASX listed companies, when theoretically at least you'd expect the CEO to be fully focused on the business at hand. And yet he never seemed to be visible from a shareholder point of view- even to this day I wouldn't know if I passed him on the street!

Whether Drake has taken the opportunity to seek representation at Board level is a question yet to be played out, and I personally don't know the answer to that.

Another "out of the blue" observation relates to our Director Rick Deurloo. And I quote the SMN news release at the time of his appointment:
Structural Monitoring Systems Plc (“SMS” or “the Company”) (ASX: SMN) Is pleased to announce the appointment of Rick Deurloo to the board of SMS as a non-executive director, effective 1 April 2022. Rick has more than 23 years of experience in management and sales in the global aerospace industry and is currently SVP & Chief Commercial Officer for Pratt & Whitney. In this role he is responsible for leading and directing all Sales, Marketing and Customer Support worldwide for Pratt & Whitney Commercial Engines and International Aero Engines (IAE)."

Personally I think it was a real statement at the time to get such a highly credible aviation figure onto the board of SMN, so please don't misinterpret my following comment - does the fact that Rick still works for Pratt and Whitney in a very senior commercial role represent a potential conflict of interest? Perhaps Ross Love will address that particular issue whilst he ponders over the future composition of the board, and the relevant complimentary skills seen as necessary. Certainly if there is no conflict of interest Rick's background would have to be considered ideal for SMN.

Finally, as a parochial Australian I do get very upset when I can see the rights to the technology developed in this country effectively sold to overseas interests for a fraction of what its potential value is. As a matter of fact I do favour investing in new, potentially disruptive technologies developed in Australia, but it's rare to see the full benefits of those technologies arise in Australia, probably because Australia doesn't have the funds to assist in commercialisation of the technology, nor the markets to fully exploit the technology.