This is the letter I wrote to Chris Wood on November 15 last year.
I don't think there was anything underhand about it.
I received two short phone calls from Chris at the request of Athan in which he basically told me salaries were higher for the US (where he was then based) than in Adelaide. I recall telling him that the main salary concern from holders was Athan's salary.
Chris was concerned about the remuneration report not being passed and Marty not getting a bonus. I said shareholders were not prepared to sit back and pointed out that the Commonwealth Bank had just received a first strike. He wasn't aware of that.
Both phone calls were very short. I did ask him about the circumstances of Lisa leaving and he said he was the one who made the decision.
He then followed up with the short letter urging people to reconsider their votes. I'd communicated with most via Messenger and knew there was a very strong view that various resolutions should not be passed.
Secret backroom deals! Hah!
Dear Chris
,
I am an Xped shareholder who will be a proxy at the AGM for at least
27 shareholders from the Xped Investor Chatroom on Facebook. Many of
those have already voted online with the ability to change their votes
until Monday November 28. Collectively they own many millions of
shares.
Like others who have invested in the company I think the technology is
exciting and the future hopefully is bright for us as well as the
company, manufacturers, industry and consumers.
However the share price is in the doldrums and shareholders have a lot
of fear about their investment while the AGM resolutions include
lavish bonuses and share dilution. I believe just about all
shareholders will be voting yes to the first three resolutions but no
to some or all of the others and this is why I am asking you to ask
the board to have a rethink.
Regarding bonuses offered to management many believe they are too
generous and the bar is set way too low, incorporating income from
stand-alone companies taken over. I know others have written to you
about this.
Shareholders these days are not prepared to sit back and see money
siphoned off and a wise board drops excessive bonus proposals and also
share dilution proposals.
Many shareholders are also nervous about the fate of the company under
the management of Athan Lekkas, although you have said he is a core to
the current and future success of Xped and detailed his achievements.
I can see you have praised him highly, noting that he convinced Martin
Despain to leave a secure highly paid job and secured a collaboration
agreement with Telink, attracting Dr Wenjun Sheng. But I wonder if the
role of the founders in this has been minimised. I had always thought
that you and John Schultz had discussions with Telink in which both
sides saw an exciting resonance in their technology ideas and mission.
That scenario would make far more sense to me than Mr Lekkas being the
architect of the whole collaboration as he’s not from an IoT
background. Dealmaker - yes, boffin who knows about widgets – no.
I think the board needs to clarify where Mr Lekkas is working and
where he will be in future. You said in the reply published on Hot
Copper that “Athan is not receiving USA based living costs,
accommodation, vehicle and living expenses”, but this package was
listed in the annual report. The explanatory AGM memorandum clarifies
that it’s “to the extent Mr Lekkas is required to relocate to the USA
at any time” but this information would have been overlooked by many
holders and the market.
As a side issue there is shareholder concern about prior business
decision of Mr Lekkas and I’m not referring to horrible things said on
Hot Copper. It is fact that Soaring Securities was deregistered, Raya
didn’t do well in geothermal and First Growth Funds has had a big
drop in value while directors receive large benefits and propose to
dish out millions more shares and options. Really it’s not confidence
inspiring although your response published on Hot Copper has gone some
way towards boosting confidence.
To me personally Telink and the JVs make a lot of sense because they
would allow for a Chinese led headstart for ADRC while mainstream
manufacturers maybe sit and wait to see which way the wind blows with
Homekit etc. ADRC products in the market could inspire the mainstream
to follow, and also give the Deb browser app a purpose. I think JCT
and Vital Xense also have roles in competitive markets.
But shareholders need to know more.
We need to know the status of the MOUs. Can we rule out Intel and
Microsoft on the grounds that their names have been mentioned and the
MOUs required secrecy?
We haven’t had an update on MOUs for some time and shareholders wonder
how this ties in with ASX Guidance Note 8 on Continuous Disclosure
We also haven’t had an update on Tytronics, Wire By Click and Leapin.
I think we need a clear, concise timeline update by the AGM and
indications of revenue from Telink chips and other sources. It’s hard
for me to see anything coming from Intel. It seems that the Intel
solutions site merely hosts solutions and doesn’t actively promote
them. The investor roadshow presentation I found was very hard to read
on my laptop and even harder on the phone. It was information dense
and difficult to follow so I hope the next one is in easy read format.
Shareholders would also like to know how many people Xped employs, not
including the self-contained businesses of JCT and Codium, because we
know that various staff have left under somewhat mysterious
circumstances and the company seems top heavy with a highly paid CEO
and a highly paid MD both wanting loan shares and bonuses.
Shareholders want to know if a small company needs a CEO and an MD.
Some other questions – why wasn’t a trading halt called when the share
price started to plunge in August? What steps has the company taken to
stop manipulation of the share price? And why has there been a
revolving door of financial advisors each wanting a large chunk of
shares and options?
I do hope some of these issues can be clarified and that the share
price does not drop further when the market opens tomorrow after a
capital raise that many see as unwarranted at this time.
I hope you can pass on my concerns to the board because they reflect
concerns generally.
(20min delay)