Ann: Kidder Williams to advise on strategic and growth options, page-7

Im still around hanabi, watching and reading.

CSS's whole business strategy revolved around bringing sales vols up to a point where self sustaining CFs could be achieved. That's no longer going to be possible given the uncertainty that covid has introduced. In this regard, no one forecast this type of event. Having said this, there was a significant risk to being able to achieve the sales revs and profit figures that CSS was targeting and this is where my views diverged from the company's. Ironic..they appear to be looking at the costs side now which should have been the priority rather than growth/vols. They need to continue on this path and bring down the amt of sales required to achieve consistent positive cash flows and profits.

Clearly pressure is mounting internally as well as from SHs, hence the third party review. Let David look after the mgmt of the bus and get someone else to look at options which may include a sale. Im certainly not advocating for this, but the company is sitting on very large cash balances without a market to take up the proposed vols. Its somewhat of a sitting duck. Another option is to do a captial return which is something that SHs deserve but also pointless as cash is sitting at $22M but they burnt through $9M as per qtrly. This is a big problem as they only have 3qtrs of funding available. Covid is a LT problem not a 9mth issue.

I am a contrarian so my opinion is that now more than ever they need to invest. Its counterintuitive but in downturns its a good time to ramp up. Labour and equipment should be cheaper, however timing is everything. When the market does pickup everything will be in place to sell and meet demand. The investment will require a CR as they just dont have the cash. It will also be a difficult one to get over the line. I would envisage that our new partners may want a large slice of the pie. This should be their 2nd priority behind stripping out more of the costs. This is the most important activity at the moment.

Unfortunately the SP will continue to languish in the absence of a positive third party review including the outcome of that. Again, its a case of wait and watch. I wont be participating in a CR Ill leave that to the top 10.