3gl and h.e. certification, page-6

The following is not investment advice. It is my opinion only.

I would really love to be wrong on this, for the sake of all shareholders. But unfortunately, a read of the CEO Bulletin of 23 November 2010 confirms that the 3GL HE ammo is not certified for shoulder firing. "The Company has yet to commission the final STORM40 qualification tests, though discussions on timing and costs are underway."

In other words, the Company has gone from the supposed almost absolute certainty of qualification of the ammo by Jan 2010, to now confirming that it failed the qualification timeline, and worse still, no longer even has any timeline for 40mm ammo qualification! As much as I wish I could, I can't read it any other way.

On top of that, the Bulletin also confirms HE 3GL weapon is not qualified for HE shoulder firing, and that its qualification will be even later still, as that process will not begin until after the ammo is qualified. "The 3GL will be ready to commence qualification to man-fire HE ammunition as soon as the STORM40 ammunition completes its" (now delayed, unfunded and untimed) "qualification process."

With neither the HE 3GL or the HE ammo presently qualified, any shoulder fired demo to Arch Bevis (or any other shoulder fired demo) was and can only be with inert ammo. A read of the relevant ASX release dated 18 Sept 2009 finds no mention of shoulder fired HE.

Beyond all that, note that the Company specifically now blames the MPM and MAUL awards for the HE ammo qualification timeline failure. 23 November 2010, "The recent contract awards for MPM and MAUL have taken resource and funding priority over STORM40 testing".

Interesting. But the MPM contract was announced 20 April 2010, over 3 months AFTER the Jan 2010 due completion date for the 40mm ammo qualification. How does a contract received in April 2010, prevent the completion of a task which was due 3 months earlier? Even more so, when the Company also seeks to include the MAUL contract in the same claim, even though the (3 August 2010) MAUL contract was not awarded until approx 7 months after the failed qualification schedule.

The Company also claims (23 Nov 2010) that the HE firing 3GL has been "intentionally delayed" due to resource constraints imposed by the same MPM and MAUL contracts. This is much worse than just nonsense, given that the 3GL qualification was due (but not achieved) approx 12 months earlier.

I recall that according to very specific announcements by the Company, the Redback was going to going to pay the bills well before today; but it's now dead! Both the mighty 3GL and the 40mm ammunition were also going to pay the bills; but we no longer have even a qualification timeline for either, let alone sales, revenues and profits.

These failures are appalling, but the fact though that some are presented to us as intentional delay is intolerable.

They have failed. They have failed repeatedly and massively. How can this lot possibly continue?.