Ann: Notice of Annual General Meeting/Proxy Form, page-63

My other reflections on Alcidion

Investment horizon and thoughts

With the new Alcidion, I would think it is sort of a circa three to five year period before Alcidion starts producing the consistent revenue numbers that we all expect them to do. My investment period is therefore to hold for that period. But as you know in markets, we do not necessarily have to wait that long until the market re-rate occurs. The re-rate would occur when market continually sees Alcidion delivering and successfully executes on its growth strategy.

Alcidion remains a high-conviction stock for me, even more so now that I have met Kate and sought feedback from other people on her.

Need for a long-term strategic partner

In many ways, and I have mentioned this before, Alcidion reminds me of TPG. I know it is a long bow to draw, but bear with me. Like Alcidion, TPG was a little but profitable disruptor in the telecommunication space years ago. The market really did not re-rate TPG until they have got Washington Soul Pattinson on board as a long-term strategic investor.

The benefit of this is that it provided certainty and confidence to TPG that the focus was long-term and not short-term share price variation. It also signalled to the market that additional funding could be secured from this ‘big brother’ as opposed to a in the dumps capital raising even when things go wrong. It is also clear that the involvement of Washington Soul Pattinson was a comfort for Ophir (a reputable small to mid-cap institutional investor) to invest in TPG at around $0.50 (from memory).

It is clear to both Alcidion and myself that this is that we need now. A ‘big brother’ to provide confidence to the market, perception wise, creditability and etc. Someone who has a high-conviction in Alcidion and whom is willing to provide the level of support – for example, support for share price, potential future funding requirements and etc. If Alcidion needs to offer a 10 percent discount placement to get someone reputable on board (for example, Alex Waislitz of Thorney), so be it then. Short-term pain for long-term gain.

Alcidion’s CEO – Kate Quirke

In many ways, I am very impressed with Kate and her appointment as Alcidion’s CEO. In my discussion with her, she exhibits confidence and competence. She comes across as the type of individual who would call things as they are and would not attempt to spin. I would expect her to the kind of CEO who under-promises but over-deliver.

I also appreciate her efforts to seek me out at the AGM to introduce herself (not particularly hard when there are only two attendees) following being made aware prior to the AGM of my attendance. She took time to answer my questions and genuinely seems to be well across the Alcidion group – products and etc.

Prior to the AGM, I have also sought impression of Kate from some people whom I know in the healthcare sector. The feedback that stuck is my mind is that she is focussed and formidable.

I am confident that she would perform excellently in shoring up the fundamentals of the Alcidion business. Get the fundamentals right, the market will sit up and take notice and re-rate us accordingly.

Bluesky’s shareholdings

It is no secret that Bluesky is seeking to exit and that Alcidion is working on getting an institutional investor onboard to take over the parcel in an orderly manner. Bluesky has given its commitment to Alcidion that the exit would be orderly and that they would do the right thing by Alcidion and its investors.

This was a key focus for Alcidion’s institutional roadshows in Sydney and Melbourne last week.

What is in the pipeline?

While Kate did not divulge much on what is in the pipeline over the next six to twelve months, I did get some positive vibes. My expectation is that there would a steady news flow from domestic and overseas development in 2019, given we are nearing the festive period.

We should expect an announcement on Mid-Central Health District in early 2019. Calvary remains a big question mark.