I had a brief discussion with Stephen Forman earlier this morning before he went into a board meeting for SMN.

I wanted to get an understanding of how things were after this hiccup with respect to the requisitioning of the meeting to remove 2 directors (including himself).

Because of limited time I couldn't expand beyond this subject, but Stephen wanted to emphasise a few important points:

1. There were no hostilities between the parties, and importantly on most facets of the business, all sides are completely as one, and focused, on the future directions of the company, and the business. Where there was a divergence earlier was in relation to the magnitude of the fund raising initially being sought, and the pricing. The final funding announced is considered a good compromise.

2. The board had always planned to refresh, with an intention to appoint some high profile executives having aviation experience. What this hiccup has done is expedite that process. (And the announcement yesterday specifically refers to "The recruitment process for the additional director/s will commence immediately"). The fact that the first FAA approval is expected soon does necessitate the commencement of considering longer term professional appointments.

3. Hotcopper gossip had precipitated to all sorts of potentially slanderous comments regarding one of the directors. Stephen pointed out that nothing untoward had been enacted (nor planned to be enacted) through the fund-raising discussions whatsoever. He was very disappointed that anonymous posters had inferred illegalities, and class actions being proposed etc. He found it quite upsetting and frustrating because (as we all probably know) social media provides a forum for all sorts of posters (and nutters!), who may have hidden agendas/motivations.

4. Going forward Stephen indicated he was happy to remain on the board until the right person (having an aviation background) is appointed, at which time he would voluntarily step down, and perhaps continue as Investor Relations Officer if the board wanted that.

5. Stephen presumed the CEO (currently Toby Chandler) role may change, but that would depend on the board at that time.

6. Stephen emphasised that Mike Revelly had not, nor planned, to seek placement funds into any related investment company, in contradiction to what was rumoured on Hotcopper.

I got the overall impression from Stephen that the board is getting prepared for the next chapter in the evolution of SMN.

My view: People have forgotten very quickly that Stephen Forman actually deposited US$800,000 unsecured, as guarantor for SMN subsidiary AEM to acquire Eagle Audio Corporation about 1 month ago (because SMN had insufficient working capital to meet HSBC requirements - who provided the banking facility).

Disappointedly its now been 2 weeks since the suspension of SMN. And no news since the company announcement that a representative agent had sought on behalf of shareholders holding at least 5% of the shares requisitioning an EGM with resolutions being the removal of 2 directors and appointment of the agent. Since that time I understand that there have been numerous discussions between the parties, and it appears that an acceptable resolution is close. This likely will result in a variation to the terms for a proposed funding to be announced by the company (most likely a better outcome for all shareholders). If this resolution is nigh then we can expect a reinstatement to the ASX listing soon.

Whilst this requisitioning of the EGM was negative and probably reflects badly on current directors with the decision to seek funding prior to FAA approval (and thus taints the view of the company more broadly), I remain very positive of the company for the longer term. Certainly my view is that anyone deciding to sell out at this time might rue the fact - its almost like throwing the baby out with the washwater - the CVM technology will revolutionise aviation industry maintenance procedures once approved by the FAA.

Most appreciative Suttree. Unfortunately on this matter there is a lot of uninformed commentary on the HotCopper threads (as well as some very well informed commentators).

I agree that its definitely not a good look at all, actually taints the company somewhat. And what befuddles me is that the requisitioning agent is actually a long time friend (from school days) with the CEO and one of the directors. 

Clearly the directors made a serious error of judgement in seeking to raise considerable funds at a very low price relative to the immediate pre-Trading Halt price (97 cents). Further, they overlooked that (and I was also unaware)  a UK-domiciled company must call a shareholders meeting to approve a fund-raising. (That in itself suggests to me that you should always raise more than less funds each time you raise - its actually far more constraining cf an ASX-listed Australian-domiciled company!).

There is a view that the fund-raising should not have been sought before FAA approval - because there's no doubt the share price will be higher after approval. (But perhaps the board is concerned that FAA approval may take longer than expected).

Once this fund-raising is behind the company, and FAA approval is granted for the first STC I believe the market will overlook (probably not forget) about this meander in the road!

Meanwhile, aside from the corporate shenanigans,  the operating AEM is probably in the throes of moving to its larger facility in Kelowna, BC, where the new acquisition Eagle Audio business will merge into and  become part of the AEM avionics business. And the soon-to-be rollout of CVM sensors.

What I appreciate most of all is your honesty and generousity. Especially when you hold.  Exactly what I want (and expect) from SM. Because you can't get that anywhere else.