the smell of rotting flesh

Let us look at other serious issue the dispute with Inviro SA– when did Mr Williams become aware of the problem and why is the market not informed?

Let us examine the timeline how this amazing episode exploded to reflect when Mr Williams should be aware of the problem (IF he was not aware at that time).

On 29 September 05 ASX release, CMQ announced the $1.4M SA sale to the market. Coincidentally this announced sale contract helped CMQ over the line just in time to beat the covenant dateline to achieve the required covenanted sale target.

On 18 October, 2005 ASX release, Mr Williams informed shareholders on page 12 of the October presentation that the $1.4M will be shipped over the next 9 months meaning over the period ending 17 June 2006.

On 18 November 2005 ASX release, Australasian life science presentation on page 12.again CMQ presented the $1.4M will be shipped over the next 9 months meaning over the period ending 17 July 2006. Note this was released 1 month later, yet had the same expected identical “next 9 months” delivery schedule! How sloppy as the next release shows!

On 24 November 05 ASX release, Mr Williams boasted to shareholder at the AGM that CMQ had delivered full container loads of goods to South Africa for the $1.4M contract. Mr Williams further told shareholders “Milestones to monitor over the next six months – further substantial commercial sales to pigs and poultry producers in South Africa”. Must be super jet delivery - refer 18 Nov 05 above.

On 1 March 06, in the half yearly report signed by the auditor, the revenue for the 6 months to 30 December was posted as $63,000 sales of goods and $1.352M of interest giving a total of $1.415M. Brian Magano signed and dated 1 March the accompanying declarations stating the accounts have been subject to review. The $1.4M contract was obviously excluded from reported revenue, is it because of objections from the auditor? Alarm bells should start to ring?

On 6 March 06 ASX release, in the March Investor presentation, Mr Williams listed on page 7, under the dot point of “revenue for 6 months ended 30 December” the $1.4M SA contract was listed separately to total $2.855M. The data was presented in such a manner that the average person will likely interpret the $2.885M as total revenue for the period ending 30 December.
On page 13 under “Country Summaries”, the $1.4M sale order was described as “product in the process of being positioned in South Africa to meet the order”. A typical Teflon styled announcement that CMQ shareholders should be getting used too by now.
If alarm bells had not started ringing on 1 March surely the alarms and flashing strobes should be screaming on 6 March 06.


On 15 March 06 ASX release, the newsletter mentioned the $1.4M sale and Mr Williams assured shareholders the $1.5M sale (poultry) signed in 2004 is on target for delivery after 1 July 06. No mention of any rotting $1.4M contract.

30 June 06 – shareholders were holding their breath waiting for Mr Williams to announce whether the revenue covenant was fulfilled. The reasons are clear to all fair-minded person why the announcement was delayed to 7 July 06. The announcement did not indicate any disputes or disagreement with the buyer and or the auditors. How is it possible for CMQ not to be aware of the dispute and why kept the market in the dark?

Conclusion:
The time line clearly indicated that CMQ knew or ought to know of the $1.4M problem on 1 March 2006 when presenting the half yearly accounts. There were CLEAR & DELIBERATE reasons why Mr Williams on 6 March 2006 changed the tune that the goods were now positioned instead of delivered. The Warts, Stealers, and Dills on the various forum website were up in arms abusing posters who questioned Mr Williams choice of words. Yes Wart, this is the TEFLON TEAM that is destroying your share value, not the messengers that bring you the news.

To end let me quote from “The Investor’s College”:
Anything worth conveying to shareholders should be capable of being expressed clearly. So, if it’s not making sense, then THAT’S PROBABLY BECAUSE MANAGEMENT DOESN’T WANT IT TO”.