another dog's dinner

The following is my personal view only. It is NOT investment advice.

The odds that shareholders would be unlikely to take up the original Rights offer were so incredibly obvious, and showed such deep managerial ineptitude that it stirred a feeling of hopeless exasperation in me. I believe that today's urgent announcement of a 'new and improved' offer confirms that shareholder feedback at large probably reflected similar opinion.

But we still remain with a need for much more information than has been provided. Because of the failures of this team, we are being asked to front up yet again with more money, but we are not provided with any clear visibility of the planned future of the Company. Apparently the $3m asked for does little more than simply keep the Company doors open for a time, with essential progress such as certification remaining on hold, perhaps until some unidentified 'good' thing might happen, even if only by chance.

We don't know why the 40mm live rounds have not been certified. We only know that we were told to expect that they would have been! We don't know why H.E. has never been fired from the shoulder. We don't know what the problem has been. We have not been told. Is there a major problem? Are there numerous problems? How far are we from a final commercial design? Why has this information been withheld? Looking at the size of the proposed major capital injection expected to follow, it appears (almost unbelievably) that there is still a long way to go. But we simply do not know for sure, because we have not been properly advised of the ACTUAL position. Is the engineering team operating without proper focus and instruction?

The same questions are unanswered regarding the 3GL itself. Why do we not have clear and full information of the state of development, the problems that might exist, and the fixes that might be needed? Why did the projected sales and revenues fail to emerge?. Why were we not advised along the way that the Company was failing to meet such critical objectives?.

We were assured by the Chairman that we would be advised of all material news, both the good and the bad. But that has not been the case. Clearly, as the Company progressively failed to hit objectives and milestones that would have delivered the planned certification, sales and revenues, we were NOT advised, and we did not know that progress was falling seriously behind. Why were we not kept up to date with such critical information? We were/are entitled to know.

We did see the CEO do the exact opposite of what was needed, dumping failed strategies silently and without replacement, and then leaving it to the Chairman to paint over the failures with a few lines of political speak.

These people seem to have no idea of the damage their failures and side-stepping style of communications has done to their credibility. They are not entitled to continue to deliver us more of the same. They have failed, and all shareholders are paying the price. A performance bonus of $186,000 in these circumstances, and the payment of directors fees, is ludicrous.

This is not a team that can be trusted with yet another go, at yet another strategy, with yet more funding. Nonetheless, they actually do continue to expect investors to make another investment, and with seriously incomplete information.

Three things are needed immediately, if shareholders are to make an informed investment decision, and if the Company is to succeed.

1: Full no-nonsense open disclosure of the EXACT position of development of ALL of the technology, and along with the reasons for the failure to achieve so many objectives.

2: The release of a detailed development schedule, to include all outstanding milestones, costs and timelines.

3: The Chairman to stand down. The CEO to also go, to allow for at least the potential for real entrepreneurial leadership to re-emerge in the Company. For an extended period, the Company has been going South at a sustained rate of knots. I for one am tired of the inept, long-winded dreadful downward-spiralling performance of the team, and firmly believe that we need the installation of a refreshed team that is more likely to deliver the projected outcomes, and a good part of the potential of the technology.

There are risks in such changes, but if the present course is maintained it will soon be too late for any hope of repair. Better therefore that we try, rather than just wait and die.