Ann: FNP Equity Raising Presentation, page-16

subs i personally have no problem with anyone coming onto the fnp threads and raising questions or doubts, that is the whole point of hot copper to have buy vs sell side debates and see both sides of the picture when companies release a new set of results, raise equity, etc.

i dont think our fellow investor is saying anything unreasonable and if his comments make us pause for thought then that is a good thing, even if both of us ultimately decide (as we have) to trust and back management who have a lot more skin in the game than we do and are throwing many more millions of their own cash into the equity raise.

i do agree with the comment that paying dividends (however small it is) then doing an equity raise for the second time in a year or so to raise funds for growth is a confused strategy and not great allocation of capital. i guess it is to reward long term holders and to build a track record of paying divi’s but i disagree with the decision.

the cap raise wont be for marketing spend which i would have been more upset about if it had been, rather it is for manufacturing capacity expansion and acquisitions. as oer my previous post, such investment is clearly seen as time critical due to the near term demand opportunity to secure market sure and build brand loyalty across kids milk in china, etc.

their garden variety infant formula product does not particularly excite me, but if they can launch a2 kids formula then this would be exciting.

i hold no ill will towards a2m or its investors who have done very well over recent years, although i havnt personally invested in it because i reviewed the scientific data and it is very tenuous so i didnt buy the story a couple of years ago and i certainly wouldnt now. if fnp can get a slice of the a2 pie then great, if not then they have dozens of other well positioned diversified products entering diversified markets.

my main concern is that the upfront capex spend over 1-2 years is going to hurt the margins and ebitda numbers in their reports over the next 2 years.

hold.