Hi Ricky and Guys, The AR, in particular the Chairman's Report...

Hi Ricky and Guys,

The AR, in particular the Chairman's Report and the "After Balance Date" notes, make smelly reading:

The Chairman's Report was very strangely written and I was concerned about two things:

(1) It appears that funds are required from both debt and equity in the near future.

(2) Comments about extinguishing the secured funding facility and the comment about "...their unpredictable behavior..." when referring to the NAB secured funder.

Secondly the "After Balance Date" notes and the subsequent MD 'resignation' raises big issues for me.

My speculation is that the $440k owed to CML by a now in receivership customer looks like it may have been a related party transaction and not an 'at arms length' transaction. I base this upon the comment that Daniel and Greg Riley will "...underwrite any shortfall..." and then Daniel's 'resignation' just two weeks later and Pie Fund selling down their holding.

Ricky - I reckon you're right. It smells bad.

CML is an ASI recommendation and they recently stated to buy more on the dip in SP. After reading the AR, MD resignation and the Sub Shareholder sell down I would treat this very cautiously.

Given that NAB has limited their exposure to CML to just $1m (zero by 31/10/14) you'd wonder what they know - if business was profitable they'd still be transacting together, it's not as if the alternate debt funding at 10% interest is cheap !!

I'm commenting as a non-holder as CML is on a short list of companies that I am researching.

Cheers
John