report brisbane shareholder meet 12 jan

Settle down GiddyYup and Dave787! As you know I am self-employed, and have had to deal with some minor bushfires first.

OK some of you had expressed an interest in my take on the shareholders meeting yesterday. This meeting was same day, different venue - but after the earlier Noteholders meeting.

Right at the top I have to say that these brief comments are my own individual views and perceptions, and other people who were present may reasonably have a different take. In other words, what you do about 'my' notes is your own call - DYOR.

It seemed I asked most of the questions from the floor. Understand this is certainly not by design at my end - it is just not in my nature to die wondering if an issue hasn't been brought up. As I try to ensure my questions are always 'considered' this doesn't seem to create much angst among my fellow travellers on the day.

1. BOARD MEMBERS
The Board was represented by Terry J O'Dwyer (TOD), Lee F (actually CEO rather than Board), Brett F, and John Nicholls. Body language was excellent as usual. They (TOD and Lee) answered EVERY question put, with no evasion (and indeed some typical Aussie candour). Again, key board/Exec members TOD, Lee, Brett stayed through the inevitable one-on-one smaller sessions over coffee after the meeting itself. Frankly, they stayed until we were all done....again. In fact the last 4 in the room were Lee, Brett AussieYank and myself. When I left just ahead of AY it was 2.10pm from a meeting that started at 12.32pm. To be blunt - there was ZERO bobbing and weaving or heading for the exits - so get used to it. In my experience, one can't stand two feet from someone and misinterpret their sincerity in the particular direct conversation. Do you know what I mean? My absolute call is that it is nothing but a waste of energy to box at shadows on this front.

2. ASOF
a. Breach. My understanding is the ASOF 'breach' was a technical point with the paperwork, but not one that materially affected the Notes playout that was being voted upon. ASOF have agreed to take no further action after scoring some legal fees. It seems it was a case of the NY lawyers (ASOF) (who at the end of the day are Yanks) just demonstrating they are at the top of their game. I didn't ask what the legal costs were, but suffice to say common sense prevailed quickly after the initial stoush developed.

b. Intent. It was formally noted that there are legal obstacles to ASOF acquiring more than 20% of the Company. They have to declare at 20% and then seek shareholder approval for every extra 3%. By the time they approach 51% (if they even did) we will surely be long since away after looming Contracts have begun to fill. Giddy might have an argument, but IMHO the moment a contract pops up, the shareprice will climb a bit very quickly, and it won't take much (1c-1.5c) for $13M or whatever to buy a whole lot less than what it would at current prices. That's code for 'no serious threat' IMHO. But more important - for what its worth, my clear impression was that ASOF (i) have no intention of trying a takeover; (ii) are not a front for a military competitor wanting to take MST out of the game while they sell their own widgets for a while; (iii) in fact are nothing more or less than another finance facilitator who normally operate by hanging around for 2-3 years and then moving on to another investment, after picking up a nice margin on this one; (iv) are fully aware that it makes no 'business risk' sense to convert secured notes to unsecured shares, when there are no Contracts in place yet, plus the need to declare significant accumulations, plus the futility (even if they got the stock) of swapping the board/team and expecting the product to 'smoothly' transition to looming contracts/market.

3. MST CONTRACTS
Remember the purpose of the meeting was to deal with shareholder approval to the Noteholder terms. This had already been overwhelmingly approved by the earlier Noteholder meeting, and was approved by the shareholder meeting. So MST contracts weren't a formal part of the proceedings.

That said, it was mentioned that the MST 'brand' is bubbling along nicely with appropriate credibility in the potential Contracts mix we anticipate in part during 2012. Similarly, the unofficial but informed 'word' seems to be that the MST stuff for US Military contracts (like MPM if successful) will not be part of the much publicised US Defence cutbacks coming up.

4. OTHER MINOR STUFF AROUND THE TRAPS
Grants
Some useful but not astronomical grant money (a few hundred grand) from the Aust Govt has been coming in this year.

Maul TAGS
DeMan - this is being looked at (your previous post) as part of the potential sales mix. But my impression is the fair dinkum appropriate latest tweaked field version of the Maul for TAGS use is still maybe 6-9 months away. This is no dramas IMHO given the unfolding evolution of the product for 2012 as 'our year'.

MST Brand
The products Maul, 3GL, MPM are apparently not in question versus alternative widgets. As discussed elsewhere, my impression is that 3GL is a step behind the other two. The only serious risk (?) is not products, but seems to be financial cashflow - short and medium term funding until the show starts 'soon' later in 2012.

Conspiracy Theorists
I found no joy for those that like to indulge in conspiracy theories. The board was NOT behind 'chicken wire' or wanting to head for the exits early, as GiddyYup suggested they might be. I'm not having a shot at my learned colleague Giddy or anyone else, but I have to say that I looked and probed in a 'responsible' due diligence mode (including body language) - and at this time I personally have to emphatically dismiss the conspiracy theorists among us (sorry to disappoint anyone). I could be wrong, but ASOF are apparently NOT planning to 'shoot the cow after final milking' as described in some very interesting posts. My honest advice is to get over it.

Wrapup
I am sorry this post is so long, but hopefully it is useful to some. All the evidence IMHO on location is that this board is still working very hard indeed to keep this show on it's feet, and therefore to create significant value for the shareholders. My own considered assessment is that have absolutely demonstrated the necessary mental toughness - and they ARE going to deliver. I guess time will tell either way. Meanwhile, as CJS has so eloquently put it in the past - "I have, I hold, I wait". I couldn't put it better myself. DYOR, but good luck to all.