Hi Peter I’d suggest like others the main ‘bug’ other than those...

Hi Peter

I’d suggest like others the main ‘bug’ other than those you’ve alluded to is the salaries and performance bonuses the directors have allocated themselves. We are obviously in an exciting, emerging industry but in my opinion these rewards are extremely excessive considering the infancy of the company. I don’t think anyone would begrudge the directors fair remuneration if it was tied to revenue growth but right now it seems completely out of whack with the company is at.

The sale of Derma might be a short term fix and may as you say increase the speed of roll out of Malta and pharma sales. There is obviously a clear strategic benefit in that. The concern I have is that by selling this asset to accelerate growth and focus on pharma the income (albeit minimal compared to expenses at present), is gone. There has been much talk of Cannepil and the expected significant returns from a small number of patients. This from the announcements we here should be happening shortly, perhaps next quarter. My question would be why sell an arm of the business when sales are increasing and thus the value of said arm is increasing? Also we are supposedly on the brink of cannepil sales and with $9 million in the bank it would seem odd to lose an arm of the company (unless buyer pays big overs)...Or perhaps we aren’t as close to significant revenues as we are being led to believe and the directors know that cash burn and Malta commitment will drain cash reserves before any real significant revenues are realised!

I’d suggest the latter is more likely and the directors should trim their take and use the funds to grow the company first!