Thanks to the info provided by some shareholders and entitiesI...

Thanks to the info provided by some shareholders and entitiesI have called, there is now more clarity around the process of appointing aproxy/general meetings, but more importantly it is also more clear how thecompany may have planned to push forward an agenda which would be favourablefor just the few individuals involved with the issue of new shares.

Considering most shareholders will be against the resolutionsproposed (and because of the voting exclusions), should we all vote, we may beable to have those resolutions not passed. Should you have appointed the chairmanas your proxy, he will have to vote according to your instructions, BUT, if nodirection has been given, the proxy can vote as he sees fit.

So, let’s say we all appoint the chairman as proxy anddirect him to vote against everything. What happens if the resolutions are notpassed? The Chairman can propose amendments to those resolutions and put themagain to vote. But, wait a minute! In the case amended resolutions will be proposed, that means you will have given NO DIRECTION on how to vote on your behalf on the new proposals.

This is because you simply direct the proxy to vote on thosespecific resolutions as per notice of general meeting. Should there be anychange, appointing a proxy means that you give him right to vote as he sees fit.

Now, let’s just make some assumptions to give a better ideaof what may happen at the meeting. The current resolutions are basicallyproposing to raise capital issuing shares corresponding to a price of 0.045cents each (at the current value pre consolidation). Should this resolution notpass, they may propose an amendment to issue shares instead at let’s say 0.1cents.

In this scenario, despite you directed the chairman to voteagainst the issue of shares at 0.045 cents, he will be able to ‘‘vote as hesees fit‘‘ for the release of shares at 0.1 cents, which is 1/3 of our current and since long manipulated, highly discounted share price. How do you think he will direct your votes in this instance?

As you can see, appointing the chairman as proxy, there isno way to get a decent outcome out of this, as directors seem to have already demonstratedthey are not acting in the interest of shareholders as a whole, which if provenwill be a breach of the Corporation Act.

So, what should a director acting in the interest ofshareholders do? Well, all directors of other listed companies raise money at thehighs of the company’s share price, not at the lows, so that they preserve theinterest of shareholders with a very small dilution of their investment.

Did SF1 directors have the chance to act in the interest ofshareholders? The company has a remaining placement capacity of 197.6 M shares.These shares can be released without the approval of shareholders, but in orderto raise additional shares (above the mentioned number) they need us to vote infavor (what they are trying to do now).

Should our directors have acted in the interest ofshareholders, they would have raised money when the share price was higher. Sofor example, a raise at 1.5 cents several months ago with the shares available wouldhave seen an additional ($0.015 x 197,600,000 shares) $2.96 Million in thecompany’s account.

So, why on earth they didn’t choose to do that? Let me thinka moment....raising at 1.5 cents would have seen the investors taking part in theraise to take combined control of a mere 26% of the company (which seems prettygood anyway to be honest).

Raising instead at $0.00045 per share will allow thisindividuals to take control of over 90% of the company. Does that maybe meanthat directors are trying to push forward someone else`s agenda rather thanacting in the interest of shareholders as a whole?

I honestly feel very bad for the directors, as it seems theyhave no idea what will the consequences be, should the court (through ASIC orprivately) determine them to be in breach of the Corporation Act.