Ann: Quarterly Activities Report & Cashflow, page-3

Really? Read the cashflow report. 10x more money went into sales, marketing, admin and corporate costs, than went into R&D.

This statement should be a red flag to a holder or prospective buyer: “The majority of this expenditure (US$753k) was research and development, advertising and marketing, staff costs, product manufacturing and administration and corporate costs.”

Firstly, the order of the list is deliberately misleading. The order is different to that used in the cash flow report, and so the order is carefully curated to provide comfort to the SH, by implying that R&D is a larger expense than admin and corporate costs. Which is far from the truth.

Secondly, if that is “the majority”, look for what are they trying to hide in the remainder? Perhaps the US$76k that went to “1.8 Other (institutes)”? The 6 month YTD is a lower number, implying they had positive income from this source last quarter and now it is costing them almost twice as much as they gained?

In the report of next quarter they will have to address their liquidity in 8.6. Surely another capital raise on the way. What sort of discount will that need to be?