Ann: Half Yearly Report and Accounts, page-43

Investing in microcap companies (including BRN and DRO) is by far the most difficult part of the market to invest in and most people lose money in this space.

There are very good reasons for this. The first one is that many list as an exit strategy for the original investors. They sell at the most opportune time. A second reason is that they are often poorly capitalised (most later require capital raisings). A third reason is that they lack transparency and provide an unrealistically positive outlook for their company to keep the share price high in case they need more capital. A fourth reason is that there are few institutional investors in that space because these companies are too small. That means that the market is dominated by inexperienced investors who often get sucked in by a good story and forget the numbers. It is the domain of tattslotto players who drive companies' share price beyond their value, sometimes far beyond their value (i.e BRN). DRO is a classic example of this. If you look at all of the share price predictions on DRO in the last couple of months. Every single one of them predicted a higher share price. Every single one of them was wrong. I have consistently suggested a little caution is warranted but broadly support the stock. That has led to personal attacks and people attempting to silence me. I wonder what it would be like if I suggested selling the stock. The reaction is also a mark of tattslotto players who are not interested in a reasoned or respectful discussion designed to understand both potential and risks.

The difference between BRN and DRO, is that BRN is further along in its development and has been exposed as overhyped. DRO has not yet reached that critical point. I suspect it will reach that critical point in 2024. Only then we will see whether it is the real deal or not. If it grows into 2024 it will be a profitable company with the beginnings of a track record. If the share price rises sustainably, that is when it is most likely to occur (or when significant deals for 2024 are announced). 2023 has undoubtedly been a good year and there is a good chance DRO will turn a profit in a year that has been very favourable for the industry. The question is can it keep the momentum going forward? I do not know the answer to that question, but have bought a few shares to maintain an interest. To my way of thinking DRO has potential because it has shown consistent year on year sales growth. The trajectory looks good, but that needs to be tempered with the fact that DRO is not yet a consistently profitable company and needs to reach sales of >$100 M p.a. to provide consistent long term profits. There are also risks such as increasing competition, their upcoming move, etc.

The price at the moment seems to be a reasonable balance between risk and reward. Hopefully, we'll all be rewarded in the coming 12 months