RCE Charts, page-1485

I have a few shares in this company and having another look given the recent decline in the share price. Thought I would share some interesting tit bits that came up. Recce marketing communications is slick and that comes through in the latest annual report.

* Recce is a family company listed by the senior founder (Melrose) and his family members when he was 81 in 2015.

* His family members (James Graham, grandson and Michele Dilizia, daughter) got the top jobs after Melrose's retirement at the start of the year.

* The family directly owns 27.6% of Recce at the end of August 2021. Recent decline may be partly due to the Melrose selling. Prospects of further post retirement sell down.

* The family's take in 2021 was 48.8% of total remuneration for directors and other key management, consisting of 60.6% of the salary and entitlements component and 46.0% of options granted as remuneration.

* The option valuations were high due to the relatively low strike price (1.56) with respect to volatility (77%) and expiry (5 years). This had a material impact on the income statement. The number of options granted as remuneration in 2021 equates to 4.6% of current shares on issue. Hopefully this is not the start of a trend where the board gets the bacon when share price surge but gives nothing back when it reverts as is the case now. Perhaps it was part of a strategy to lower risk but maintaining family exposure by reducing shares and increasing options. In the last 12 months the family was short 4,223,842 shares at 1.083 and gained 3,750,000 options through remuneration. Something to keep an eye on.

* Recce had materially increased products and indications post Melrose retirement. This dilutes focus and resources in anticipation but the strategy is consistent with an entrenched use of marketing to support market cap. As a result, risk has heightened somewhat and is probably binary on clinical safety currently being assessed.

Good luck everyone.