Fred Bart has resigned as chairman of ASX-listed Electro Optic Systems with immediate effect to give the colourful Sydney businessman time to focus on ‘‘his other business interests’’ such as the futuristic but perennially delayed speaker manufacturer Audio Pixel Holdings.
Former lieutenant-general Peter Leahy has stepped up as replacement chairman for the $600 million Electro Optic Systems (EOS), which ships military weapons overseas, invests in laser technology to track rubbish in outer space, and is building an information superhighway for the space economy.
Shares in EOS tanked 7.3 per cent when the news was announced on Tuesday. The stock is one of the most heavily shorted companies on the ASX300, with about 8 per cent of shares held short.
Mr Bart has chaired the company since it listed in 2002, and in a statement EOS said he had ‘‘overseen tremendous growth and success of the company’’. ‘‘However, given the increasing time commitments of his other business interests, Fred has decided that now is an opportune time to step down,’’ the statement said.
Mr Bart’s other major chairmanship is of ASX-listed sister company Audio Pixel Holdings which, despite having big plans to produce ‘‘revolutionary’’ wafer-thin speakers for more than a decade, has not sold a single chip.
EOS paid Audio Pixel Holdings about $30,000 a year to share its Sydney office before a relocation to Canberra less than a month ago.
Audio Pixel Holdings was this month issued a ‘‘please explain’’ notice by the Australian Securities Exchange after the company blamed ‘‘a recent outbreak of the COVID-19 Indian variant in Israel’’ for yet another delay in providing a demonstration of its chip speakers.
Although Mr Bart said in February 2013 that planning for the fabrication of these speakers was ‘‘well advanced’’, the company has routinely pushed back the time frame to demonstrate the chips to investors.
Mr Bart responded to the ASX noting the next demonstration will be in May, at next year’s AGM, depending on ‘‘travel restrictions between Australia, Israel and connecting countries’’.In an update yesterday, Mr Bart said subject to meeting ‘‘performance specifications’’, the company would hold ‘‘in-person demonstrations’’ with ‘‘a number of prominent industry players that maintain relevant staffing in Israel, and have repeatedly expressed keen interest in our technology’’.
‘‘Currently such in-person demonstrations are being scheduled for the latter part of August. To the extent confidentially clauses permit, we intend to provide further insight as to the industry’s reaction.
’’Audio Pixel Holdings’ auditor, Deloitte partner David Salmon, said he tested the ‘‘likelihood of the commercialisation’’ of the speakers in part by ‘‘assessing the status of the technology development based on discussions with management’’.
EOS came to life as a listed company via a back-door listing through Growth Property Investments (GPI), a company controlled by Mr Bart; his wife, Cheryl, was previously a board director of EOS.
EOS has planned to make hundreds of millions of dollars selling its remotely operated vehicle-mounted weapons platforms to interested nation states, in particular the United Arab Emirates.
Despite announcing a $410 million contract to supply remote weapons systems to the UAE in January 2018, the company is yet to receive payment for the arms, many of which have been delivered to the Middle East and are awaiting final approvals from the UAE.
Of the $43 million of cash inflows between the start of April and mid-May this year, $30 million came from its main UAE customer ‘‘drawn under an international letter of credit which fully covers this entire contract, through a major Australian bank’’. In an update for the quarter ended June 30, EOS said it had booked total cash receipts from customers of $65.5 million, of which half accounted for the letter of credit.
AKP Price at posting:
$28.50 Sentiment: Hold Disclosure: Held
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