Ann: Quarterly Activities Update and Appendix 4C, page-7

To say I'm a little annoyed at the ASX would be an understatement.

There are literally hundreds of companies on the ASX that are in a much worse position than FZO and have zero ability to raise capital without completely destroying the company, yet FZO are the one that gets picked on. Even though they have raised money twice now at a significant premium or close to marketprice. Not sure anyone realises given all the crying about cashburn and equity raisings but there are still UNDER 200 MILLION shares on issue ((I've excluded options as they are well out of the money now). Hardly a blowout of the capital structure.

As for FZO business performance itself, I see little wrong with the company from a revenue growth perspective. Unfortuantely in this market unless you're the market darling, business performance does not seem to matter. People say profit is what is important now in this market, but I see several companies that have entered profit and still their SP is in the dumps.

The main concern I have is the launch of the 'free monitoring' product. They seem to be confident that people will use the FM and then once children access inapporopriate content (which they inevitably will) that the parent will then upgrade to the paid product. Maybe they are right, but it needs to be proven. Personally I would like to see them monetise it by entering exclusive deals with telcos (ie pay a lump sum and/or per user fee) rather than just giving it away...maybe they will do that as well, but that hasn't been made clear to me. However if the FM product doesn't cannibalise their existing business, then I suppose it can only add value.

The shareprice is clearly frustrating me and other long term shareholders atm, however I see nothing wrong with the business performance and therefore if it is indeed a sinking ship, I'll go down with it. But i honestly expect this is not the case and the shareprice performance will turnaround at some stage. Maybe I'm just kidding myself but we'll see.

Cdchi1