Ann: Lease of new warehouse, page-16

Here are my interpretations of the news on the new warehouse:

·The rental charged is below market rate and board had independent reviews and had discussion and approved it. As indicated by @Mauombo and @CaptainSteve, at $170K at 2035sqm for our new warehouse vs. a nearby warehouse at $210k at 2039sqm.

·The company currently use 4 warehouses, so it means moving stock around the different locations and paying for more overhead(power, water, rates and insurance etc). It is highly inefficient currently. My understanding is that there are not enough rooms already.

·It is a related party transaction, but because the party related is the majority shareholder, therefore, we can expect that the CEO will consistently support the business. We the long term shareholders appreciate the interest free loans provided by the CEO in the past a few years. Rental from the majority shareholder means that the owner will provide the company the flexibility when it comes to things like rental, vacant notice etc. I see this being a positive thing.

·Once again, the CEO demonstrated a very strong commitment and confidence towards the company by investing together with the company. It is hugely different when you invest into companies where CEOs are just managers who take salaries. Congratulations to him and all the shareholders for another milestone when the business is able to operate in one location with rooms to grow.