Ann: ASX Announcement dated 18 October 2024 - Orderly Wind down, page-9

If you believe that there is a possible case, you need to prepare a case proposal with as much information as you can provide:

• Exactly what is the basis for the case. You will need to specific, not just "the board didn't run the company good". It will have to be along the lines of "on this date the board stated X when Y was true (or failed to disclose X, which was a disclosable development)". If you can specify any law, rule or regulation that has been contravened, that will help.
• You have to show that you made an investment decision based on the action above: bought more, or decided not to sell. A purchase confirmation is ideal. It's a bit harder to provide proof that you "decided not to sell" on the bases of a board action.
• You have to show that there were no other statements, signs or signals that would have warned a "reasonable" person that their investment was at risk.
• You have to show that you suffered financial harm, and how much harm you suffered and intend to pursue from the directors. If you are trying to get a class action going, you will have to show that this harm was (probably) suffered by a significant number of others who made similar decisions based on the board's actions. Provide an estimate of the number of class members, and the total amount that the class would pursue.
• If you can identify any assets or income that the directors have available to satisfy your claim, that will also help.

Once you have your case proposal, you can shop it around law firms. Keep in mind that you are selling a business case, not just a legal case. If there is no hope of successfully making the claim, or no hope of recovery from the directors, then no firm will touch it. This is doubly so for no-win-no-fee cases where the law firm will have to get backing from a litigation financier.

In the case of Redflow, I seriously doubt you will get anything up. I suspect you would have trouble with even the first bullet point. And as for the third one – other signs and signals – there were plenty. For example, on 31-May-2024 the board announced that the capital raising had failed to achieve even 25% of the maximum value. Tellingly, the prospectus gave 50% as the minimum for achieving any plans. The amount raised was less than the $3.4 million operational expenses requirement. This is probably the most promising statement for you:


But the prospectus shows that insufficient funds were raised to even fund projects and pipeline conversion, let alone key engineering developments or Thailand scale-up:

But you'll have to show that a "reasonable investor" wouldn't have taken one look at the outcome of the raising and jumped ship to wait on the sidelines to see whether the company could score the additional funds they needed.