Thought I'd start a discussion on these related topics since...

Thought I'd start a discussion on these related topics since they're going to be pertinent to ESI over the coming four years.

I think one main issue that's ongoing and clearly evident for ESI is funding and the manner in which Management are undertaking capital raising.

Generally speaking every funding initiative to date has been poorly planned, poorly anticipated, poorly executed and severely disadvantaging to most shareholders. Management seem content with last minute funding initiatives mostly to 'sophisticated' investors who are likely to be in the know while corporate strategy heads in ''an aggressive sales strategy'' direction. Meanwhile cash burn continues and the average shareholder loyal to the cause because the 'fundamentals look good' gets hit hard with huge share dilution and downward selling pressure because someone or some party has the rest over a barrel. This continual over generous discounting in capital raisings has led to an unlevel playing field among shareholders and plays havoc with the SP.

The most unsettling thing however, is that the company still needs to fund itself another four years and it should be noted that progress towards the positive cashflow milestone is already delayed. If you read the Intersuisse report it claims that option conversion overseen by Intersuisse themselves should provide the company the financial means to self sustain itself until positive cashflow is reached in 2014. However, looking at the current SP this funding strategy appears vulnerable perhaps even flawed?

In addition, the Intersuisse report states the Company's cash burn is approximately $2.5 million each year. Perhaps a more practical way to look at it given there's no cashflow yet is, for every week of delay surrounding progress with TinCom it's costing shareholders close to $50,000. Also adding to the existing cash burn for 2010 is the scheduled Matmor develop costs which will fall on top of the $2.5 million.

What's strange is management's nonchalant attitude to funding and shareholder value. It's so obvious the company routinely needs cash but things are always done last minute. There seems to be either a lack of proper foresight or listed company financing experience on Management's behalf or their advisors. But what is even more curious is a perceived reluctance by Management to acquire a notable industry player as a strategic investor? There's been no indication that the company is actively sourcing or even open to a strategic investment partner. Are they scared control will be lost?

The issue though is if Management are happy to continue raising cash in a haphazard manner while current cash burn remains as it is, then shareholders should be asking more from Management regarding financial cost control. For example what's the logic in the decision to roll out ''an aggressive sales strategy'' using precious capital when the tech itself is yet to be completely market proven? By market proven I mean one customer has actually signed the dotted line, forked over the cash and plant construction is underway.

Imo the company's priority right now should be to demonstrate to the world that Coldry can work and campaign for serious industry player investment to get them through the long project lead times. Maybe then things will get easier for the company and shareholders.

We all know that in May 2007 WEC who supposedly has an inferior product to ESIs own Coldry somehow managed to catch BHPs eye. BHP pumped $35USD million into the company.

Are current management open to strategic investors/management involvement or will we continue on the same funding path?

Cheers,