Ann: La Jolla funding update , page-17

Newland , Nathan B

Much as I would like to join in the condemnation of management I cannot in this instance and no I am not blind and have rose tinted glasses on. LJ did offload some shares during this period in fact there was a time that a few were purchased so I dont think that this has been long - I think this transpired exactly because shareholders had the CR and you dont pay brokerage and we all said we would rather take up CR than help LJ sell shares.

I think this is a very recent event as I have always stated that LJ secures the payment of salaries so its the end of the month right now so I personally believe this is a draw-down that they have rejected.

On the basis of disclosure _ I have every faith that Mr John Evans would not risk a breach of anything given the state of the company. Certainly I dont believe that he would be party to anything that could put him personally at risk.

LJ response to not being able to offload its shares - I believe is logical as well - Lets see if we have a way out. It could be a blessing in disguise. We have now got rid of LJ and in fact IMO there is a material breach of an agreement.So do we actually have to refund any of the money owed to them - maybe not.

This does not bode well for LJ as it also sets up other companies issues. What has happened is that we have a hole of around $700K in our funding seeing that directors got a lot of the under subscription placed.

So the big question is can we fill that. I am not sure but if I was the C Group I would step up as this may well turn out to be a turning point in this saga.

What must be noted is that this company does have a lot of headwind and reading the AFR article is not a happy place to be. However nothing in that suggested that there was anything wrong with the present management as I read it. In fact they seemed almost favourable.

I am not sure whether I feel positive or negative about this - one of my main concerns that I have expressed here as well has been LJ- If the company could place $700K shares @ 0.085c I would be happy even if it was more to the C group.

You have to ask yourself who these guys were who stumped up the 0.1C in the shortfall - They must have some confidence and done some DD I presume so what positives are they seeing we cannot see.

I have to ask - why if none of us see LJ as positive and think they have been mostly responsible for really destroying the sp , but at the same time they run away and we seem to then become even more negative and want proof that the directors acted honestly. I dont think KR or "Good Evans" would have done anything underhand or wrong - Just my opinion no facts.

However even companies making progress can go under its about not running out of cash. Waht I did think was positive in the AFR article was that they seemed to think the platform works and that its a good idea - I like that comment.