goods news coming very , page-7

re: what news? The expected subscription to the convertible bonds will be polished to be very good news - MHI’s vote of confidence and what a great partner MHI is going to be. The truth is if no covenant is breach, MHI is legally required to take up the bonds as agreed in the term document. With MHI fully participating as directors in the CMQ board and a CMQ appointed management team involved in the day-to-day running of CMQ, every shareholder should wake up to ask why did MHI had to ask CMQ to provide additional information to determine whether the covenants were satisfied! Does this indicate that a party like MHI so intimately involved in the business knew or suspected something the public do not know of or is MHI playing games?

Then there is the question of what is happening with the production process. Dr Melrose had proudly announced in his newsletter on 3 June the filter was ready for fixing and (Quote)-“testing will commence in the NEXT WEEK or so and we WILL THEN KNOW if the solution will allow us to achieve major manufacturing capacity increases”. That “NEXT WEEK” in the announcement was 10 June 2005. It is now 22 July and there is still no announcement even though Dr Melrose (and the MHI management team) should already know whether “the solution will allow us to achieve manufacturing capacity increases”!! The CMQ cheer squad will argue CMQ is waiting to make sure the exact production capacity before announcing the good news. If that is the case, the likely scenario would have Dr Melrose announcing prominently the solution is working and he is still determining how much above nameplate capacity the plant is capable of producing!! AND it is most unlikely for MHI to ask for more information to decide whether to subscribe to the bonds?

There is also this question whether the $1.5M SA contract was filled or has the sun set on it. In the same paragraph in the newsletter, Dr Melrose said “production continues at the plant and we are currently producing and shipping product to customer in South Africa and New Zealand”. Please note when Dr Melrose announced “First Sale shipment and production update” on 12 May, subsequent accounts information showed sale receipt for the period ending April and also May. But the 3 June shipping information had been followed by a ZERO sale receipt for the June account!! See anything different between the 2 shipping announcements?

Shareholders should remember one of the 7 incidents in the ASIC charges relates to CMQ’s alleged failure to inform shareholders the sun had set on a South African contract! The “new $1.5M SA contract” Dr Melrose repeatedly announced had to be filled by 30 June 2005. Why have we not heard whether the sun had set on this contract or what portion of this contract had been filled?

Come on ASIC – wake up these guys!! What’s happening?

Cheers