Ann: Notice of Annual General Meeting/Proxy Form, page-18

So, 10resolutions on which to cast our votes. It’s surprising how many shareholdings are not voted; AnteoTech’s experience over the years may well be mirrored in the AGMs of many Australian companies. Our Company typically has about 40%-50% of votes counted (1 share = 1 vote).

As always,each resolution is voted separately, and each provides essentially four choices:

· For

· Against

· Abstain

· Blank – i.e. an undirected proxyvote, which by definition is at the discretion of the proxy holder.

There is afifth choice, where a shareholder does not lodge any voting intention atall. This accounts for that 50%-60% balance of total shares on issue.

Many votersappoint the Chair as proxy, to apply their votes as directed, or in the case ofa “blank” vote, at the Chair’s direction. It is usual that the Chair assigns those votes in favour of the resolution concerned. If you have a particular view about any resolution, be sure to direct your vote accordingly.

I’veattended most of the AGMs over the last decade before the impact of Covid-19 ongatherings. We’ve had one or two quite important ones over that time, and I think this 2021 is another potential pivoting AGM. The Company is in the throes of changing from being essentially an R&D operation, to a fully-fledged commercial operation with a major R&D arm that keeps feeding into existing and new markets. The confirmation of the appointments of our two new Directors (Resolutions 3 and 4), is indicative of some of this transformation.

I do havereservations about Resolutions 5 and 6, but not about Resolution 7. Of course,it’s pretty well impossible to undo Resolution 5 (the $9m placement). I need to declare an interest in Resolution 5, because I did receive and pay for shares under that offer – but my preference would be to unwind the whole of the $9m were it possible, instead drawing on the very strong response to the SPP (Resolution 7), but with a Rights Issue to cover the lot. However, that is just hypothetical meandering on my part. Now, what happens were Resolution 6 rejected (the ratification of fee options to PAC)?

Why am Inot happy about the capital raise, and why question it now? After all, past decisions are water under the bridge. Yet they can be an indicator to future judgments, and we have some very critical decisions and negotiations ahead.

The capitalraising was announced on 28^th April last, and swamped the batterynews of the same day about the cross-link binder additive with a 20% or soperformance improvement. Moments before the CR announcement, the SP went to about 48 cents. Remember? It was the first trading day after Matt had resigned from the Board, and Geoff and Chris had been away on some leave. And what was the offer price? Yes, 26 cents. A valuation that I have since learned was produced by PAC Partners. I’ll leave you to look at the SP chart to see how that one went down so well.

To whom wasit offered? $9m to PAC clients; $3m to significant shareholders; and an SPP of $4m to all shareholders. We tracked the share register, and found that over 80% of the “new” clients had stagged their profits and exited the company by the end of May. PAC was rewarded with 6% ($720,000), of gross proceeds from the placement, an amount at the very top end of market, plus over 9 million options – under Black-Scholes valued at a little over $1.25m, per note 15(b) in the Financial Statements. As a percentage of the $12m raised, that is 16.44% commission in all. For very little risk and effort.

Why did theCompany go to a broker? Why not to existing shareholders? The Chairman has stated that in view of the inability of shareholders to stump up all the capital required for the DiaSource acquisition (was that five years ago now?), it was thought they would not have the readies or the willingness to support a full capital raise of $16m. The shareholders were not even asked beforehand. Not one that I know of. As it turned out, the response to the $4m SPP was oversubscribed more than eightfold. So much for the DiaSource reasoning. (The Chairman has told me directly in a phone call, in the context of discussing workload on the CEO, that he himself took the whole responsibility for arranging the CR. I am sure he has meant well and has acted with full integrity.)

Why settlefor such a low offer price? The offer price always drags down the SP itself. Why settle for such generous terms with PAC? An approach to the Top 20 shareholders, or a Rights Issue for the lot or a significant portion, would have done the trick. Normal practice in other companies. I would have preferred to see a Rights Issue for $30m, to all shareholders. The previous two Rights Issues were imaginative, especially with their use of options at that time, and worked very well. The same flair was not evident this time. Why ever not?