a shareholders concerns

Copied from the UK CFU BB. It's not my post, it is a shareholders concerns.

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I have read through the document released to the ASX and I have the following concerns;

1) The financial data provided is insufficient. There is an adjusted historical balance sheet, but no cash flow projection. What is the company's expectation of the expenditure of these funds. They say that it will carry through to end 2013. What's it going to be spent on & what's going to happen then.

2. If these funds are going to be exhausted by end 2013, then is there going to be a need for another raising. With the company's assets mortgaged now, what will secure that fundraising. Should they be raising more now.

3. The term of the Loan Notes is three years, but are they only going to address the funding needs for this year?

4. We are told on page 4, that if we don't approve the resolution it will call the company's solvency into question. So our choices are approve a possibly inadequate fundraising or don't approve it and become insolvent. So no choice really.

5. The company Chairman (AL) will be subscribing to 4.7% of the fundraising. So, if we approve his participation this large shareholder will be in the privileged position of contributing a relatively small amount of the funding (relative to his current holding that is) and securing his future share in the company (or its assets), while the rest of us are left with crossed fingers.

6. So, our Chairman, AL will enjoy the benefit of an investment in our company, paying a 9% return (what have your dividends been) AND he will be getting the benefit of a discounted share price AND he will have it secured AND he will be in the box seat to take a share of the assets in the event of default. If the funds we are raising will only last until end 2013, and there is no cash flow projections that suggest it will last longer what confidence can we have that this is not a set up. Are we just kicking the can down the road, being asked to approve our own demise?

7. I would be more comfortable with AL participation, if he were prepared to back the company '"at risk", like the rest of us. So that is without taking a charge over the assets of the company.

8. Does AL get to vote for this resolution?

Personally, if these factors are not adequately answered in the explanatory notes yet to be provided to us, I will be voting against AL's participation in the fundraising.

http://www.iii.co.uk/investment/detail/?display=discussion&code=cotn%3ACFU.L&it=le&action=detail&id=10594089