The following is a letter I sent to Peter Atherton recently. I'm...

The following is a letter I sent to Peter Atherton recently. I'm still waiting for a reply:

Peter:

I hope the lack of success with the recent rights issue has been a lesson in forward planning for you and your Directors. The take up has to all intents and purposes been poor, the money raised ensuring only limited survival for Mikoh.

The recent announcement of the collaboration with Invensys was extremely encouraging for shareholders like myself, but so too were the the very first announcements (some 14 months ago) of the use of Smart&Secure in the first US pilot program for container security. Any fair minded shareholder will understand that trials of this nature will always take longer than anticipated but the original estimates of 6 months seem to have come and long gone. Based only on past experience, for instance Avery Denison, one has to be very suspicious of the chance of these trials ending in commercial orders, given the seeming lack of progress.

It is an extremely tough time for many companies given the current market environment. You must honestly be counting your lucky stars that Mikoh raised enough money to continue in the immediate future as a going concern. I don't know whether you are familiar with an Australian Company called Metal Storm but in my opinion this is a company that stands out in terms of management of an emerging speculative company. Metal Storm have realised the significance of employing the highest caliber resources and have attracted the likes of Admiral Bill Owens (ret) and General Wayne Downing (ret) who was recently appointed as head of the presidents anti-terrorism initiative.

Mikoh has advanced it's technology I believe to a point where additional skill needs to be brought to the company. You are no doubt a brilliant engineer or scientist. My understanding is Smart&Secure was invented by you and all the software is written by you. This in itself is a great achievement but such an achievement requires a person with certain attributes including strong analytical abilities. You know what I am getting at. Scientist and engineering types are rarely people orientated, they are just as happy messing around with test tubes or soldering irons than dressing up in an Armanni suits and giving sales pitches. In my working experience this type of person rarely has the attributes that lend themselves to a sales, marketing and deal making role. I would urge you to consider at this point in time offering a positon to the likes of Mike Ohanian or an equally experienced member of the RFID industry. Mikoh, in my opinion, is in desperate need of a credibility boost and bringing someone like Mike to the payroll may just do that. While you are continuing to develope Smart&Secure for individual uses and open up new avenues for the technology someone needs to be out there talking to existing clients, negotiating sales agreements, selling the product, talking up the product, giving broker presentations, talking to partners.

This is my impression of what is happening. The announcements of pilot projects and new industry avenues are genuine, that is obvious, the technology is so good. Peter Atherton expends an enormous amount of energy on the inital sales pitch. The pilot program gets underway. Someone else approaches Peter Atherton with another potential application and Peter Atherton launches excitedly into modifications and enhancements of the hardware and software. Yet another person approaches Peter Atherton with yet another application and so and so on. What has happened to the first pilot project. How can one person possibly have the time an energy to maintain continual liason with every potential client, to continually reinforce the sales pitch, to eventually CLOSE THE DEAL. Nothing seems to ever reach a conclusion expect one where a deal is lost.

I've rambled on enough. If you are interested in the general perception of Mikoh by shareholders and you have the time take a look at www.ozestock.com.au and go to Message Boards, type in MIK and press Go. Alternatively logon to www.hotcopper.com.au and type in MIK and press Lookup. I speak regularly with the analysts from Huntleys, a widely distributed investment newsletter in Australia. They have nothing more than what could be described as contempt for Mikoh, not the technology, the way it is run.

It really is worth considering adding some sales and marketing talent to the board.

Regards

Graham