December 12, 2006
As a small listed company based in Australia with our primary listing on the Australian Stock Exchange (ASX), we have limited resources allocated to the PR services relating to our NASDAQ listing of ADR's. This is promarily because we cannot justify any additional costs over and above our existing compliance costs that are required to meet the strict SEC regulations for a foreign entity. Because we cannot allocate additional expenditure to PR activities in the US, there are no additional benefits for us which are associated with this listing. As a result, there is a negative sentiment amongst our Board of Directors relating to the current Nasdaq Listing.
If we were able to get access to PR services through NASDAQ at no additional costs, we would be able to more effectively communicate with our US ADR holders. We believe that a well informed market is essential for increaseing shareholder value. We are very proactive in Australia in ensuring that our shareholders and the broader market are kept well informed of our activities. We comply with our reportingobligations in the US. However, PR in the USA is undertaken in a different manner to that in Australia. It is my view that successful PR in the USA requires companies to be very proactive in getting close to their security holders through events such as web-casts, face to face meetings and regular PR reports. If there was a support system to assist in guiding us through this process, and the cost of this PR platform was minimal, we would be more inclined to participate in a higher degree of active engagement with our stock holders in the USA.
It would be incumbent on us to actively participate in this new PR platform that NASDAQ is offering but through their proactive stance on advising us of its existence and hopefully their ongoing support in encouraging and coaching us through the system, we would be more inclined to invest this additional time to this process.
If, as NASDAQ have advised us, these additional PR services are available to us at no additional cost to our listing fee (which we cannot avoid), then we would support this fee increase. However, if the listing fee was increased to compensate them for providing this additional PR service and this made it less attractive for us to chose whether to use the services of another PR firm such as PR Newswire or Business Wire, we would be less inclined to support this increase. The increased use of PR services should be a choice of the company and such costs should not become a part of the mandatory listing fee.
We have a very strong view that the compliance cost of having a listing in the US are too high and commercially unsustainable for a company of our size. US regulations make the delisting of US securities very difficult in the past and so we have been required to continue with the listing of our ADR's. We would prefer to see value for our stake holders in Australia and the US enhanced by reducing compliance costs.