Email to RHT

The following is an email I sent to RHT yesterday. No response as yet but its a bit early for that.

"Dear Lisa, Adrian

I have been watching Hot Copper since the announcement of the possible acquisition of the stent company. The following is my summary of why there seems to be so much opposition to the idea.

The long termers (of which I am one) have seen Resonance progress slowly but surely towards breakeven, to the point where the most recent quarter showed a definite positive outcome. Further, the FDA approval of Hepafat just before Christmas 2013 was seen as very positive.

It looked very likely to us that the immediate future was one of increasing profits. Small but increasing profits were likely from Ferriscan alone. These profits would be after paying overheads and administration costs. The coming on stream of Hepafat was expected to give rise to significant and rapidly increasing revenue of which perhaps 80% would go straight to the bottom line since only the small increase in processing costs needed to be set against them (other costs are already covered by Ferriscan). We saw the possibility of dividends emerging quite soon. Assuming a bit under a 50% distribution, a one tenth of 1% dividend would require a profit of about $1 million. That would pay a dividend of $1000 on a holding of 1 million shares. These dividends would be likely to increase rapidly with the growth of Hepafat, and a lot more rapidly if the Fibrosis scan gets up.

What we fear now is that the acquisition, should it be approved, would require development costs that would simply put off the transition to profitably at least 3 years and probably longer.

Having said all that, I confess to having no knowledge of how the proposed acquisition company would fit in with Resonance (and I expect not many of us do). Nevertheless, the fears I have outlined are genuine and would, I think, take quite a bit of good explanation to overcome."