No we don't. The proposed sale prices mentioned in the above...

No we don't.

The proposed sale prices mentioned in the above announcement are reflective of a very 'glass half empty' view of the value of these assets.

As a listed entity, Phoslock shareholders aren't the only ones who are able to pore over the announcements. Any prospective buyers of Phoslock's assets can, and almost certainly are, reading over the releases put out by the company with great interest.

Of course, since August the Phoslock management have effectively been telegraphing to the world that they have given up on the company. It's somewhat akin to a card player revealing their hand.

You can bet that the likes of Sepro will be milking this situation for all it is worth. The one thing we can say for sure about that proposed $3.2 million offer for Phoslock's US assets by that group is that this would be the absolute minimum that these assets would be worth at current. Why would they offer anything more than a firesale price, given that they know the management have now given up the ghost?

This is why the management's proposed wind up of the company is so silly. As they've already made it abundantly clear to all and sundry that they are not interested in sticking around for much longer, they are negotiating the sale of the company's assets from a position of inherent weakness.

However, the fact that the management are at a handicap in these negotiation is not the only factor limiting their chances of securing a fair price for Phoslock's assets.

I think the timing of the sale is quite poor, as well. There are plenty of indications to suggest that market sentiment has fallen off a cliff. In Australia for example, there were just 14 IPOs in the first half of 2023, compared to 59 over the same period in 2022.

There is just less money sloshing around the global economy in 2023 compared to in previous years, which means it is harder for companies like Phoslock to find buyers who might be interested in their assets.

From the perspective of shareholders, the proposed wind-up never made any sense. It is in the interest of shareholders for the company to continue as going concern.

By the way, I do have some sympathy for the management. They are under pressure from all quarters: on the one hand, you have angry shareholders, gunning to vote out the current board; then you have the class actions being orgnaised in the background, and then there is the ongoing AFP investigation. In light of all of the above, managing this company wouldn't exactly be a walk in the park.

However, these issues are largely problems for the management to deal with, and with one possible exception, they are irrelevant to the vast majority of shareholders.

The one exception here is the Australian Federal Police investigation, which as the management have previously indicated, could eventually lead to costs and penalties for the company. ('Update on Going Concern Status', 15/08/23).

But as the management also note in the same announcement, this investigation is likely to drag on for years. I can't see how an investigation into some strange goings-ons in a small ASX listed company is going to be seen as a priority for the AFP.

This is really off in the never-never from the perspective of shareholders, and if the company is whacked with penalties a few years from now, as far as we know, the company might by then be placed in a far better position to cope with the fallout.

So this issue is essentially unquantifiable. We don't know if or when this invesitgation will lead to penalties and costs for the company, and if it does, the finalisation of this matter is so far off it is impossible to gauge the likely impact on the company.

But what we can assert with a high degree of confidence, is that if shareholders do vote to wind up the company, virtually every shareholder will be looking at taking a substantial haircut.

As others have noted already, the suggestion of a capital return to shareholders upon the winding-up of the company offers scant comfort. At best, it won't be much, and there is no guarantee that shareholders will get anything at all.

(Incidentally, it is interesting that although the management repeatedly refer to the 'liabilities and costs' associated with the wind-up of the business, they have never gone to any length to explain exactly what all these 'liabilities and costs' are. I wonder, could this be because they know that the most significant of these 'liabilities and costs' relates to the termination packages of Phoslock's excessively remunerated executive team?)

In summary, the management are suggesting that shareholders should vote to wind up the company because the company might be faced with major penalties at an indeterminate time in future. But if we do vote to wind up the company, shareholders will be hit with certain hefty losses in the here-and now.

The proposal to wind up the company is simply not in any way in the interest of shareholders, and at the meeting on the 18th of next month, shareholders in this company should make this absolutely clear to the lily-livered executives of this company.

So, the proposed asset sale and delisting really deserve to get a clear 'no'. On the other hand, the issue around the 249D notice is not quite as critically important, although I am marginally in favour of the proposal.

Of the proposed new directors, the only one I have any familiarity with is Graeme Newing, and this is mostly on account of the fact I remember that his target price for Phoslock proved somewhat overly optimisitc!

But if anything, that's a point in his favor. After all, we can be reasonably certain that at least one of the proposed new directors actually believes in the company, and we can't really say the same for any of the last crop of directors, who really only seem to have ended up in the job because they were connected to Freedman.

Newing also has 'skin-in-the-game'. Here I am not refering to his Phoslock shareholding -I'm assuming he is still a holder- but rather, the fact that his reputation is on the line, having been so effusive about Phoslock in the past.

I'm less enthused about the other two directors, and as others here have suggested, it is difficult not to suspect that, like the previous directors, they have links to Freedman. But having said that, I can't believe that Newing would sit idly by and let them trash the company.

So I think I'll vote 'yes' to the new board, partly on account of Newing.

The other factor that inclines me towards voting in favor of the new board pertains to the excessive remuneration of the current executives. The company needs to streamline its expenditure, and one glaringly obvious target is the ample salaries of the senior Phoslock executives.

I believe that in the current employment market, you could find a well-qualified CEO and CFO for a wage far lower than what McKinnon and Parker have been earning. The company needs to cut costs, and I am hoping that if the new directors are voted in, they'll set about trimming the executive salaries down to a more sustainable level.

In summary, the proposal to wind up the company deserves to receive an unequivolcal 'No' from shareholders, and I tend towards a tentative 'Yes' for the new board, although the first proposal is really the clincher.

I think it would be a damn shame if this company ended up being delisted.

The reason that I am so strongly opposed to the proposal to wind up Phoslock is not solely down to the potential losses that shareholders will likely incur.

The other reason I object so strongly to this notion is because I believe that Phoslock really is a 'one of a kind' stock. It one of the very few stocks that I am aware of that stands to directly benefit from the global warming trend.

As one study that was covered by the Scientific American earlier this year noted, between 2003 and 2020, algal blooms around the world increased in size by about 13 percent, or 1.5 million additional square miles, and increased in frequency by 59 percent. As the article notes, this has largely -though not entirely- been driven by rising water temperatures.

And this problem is surely set to get worse, with scientists confirming that 2023 is set to be the hottest year on record.

In my opinion, the world is on the brink of a crisis in relation to the blue green algae problem, and I suspect that such a calamity will have become apparent even before this decade is through. I find it difficult to imagine a worse time to be winding up a company that specialises in water remediation.