1 for 1 at 8c, page-13

The first thing I will say is "don't get too focussed on the 8 cents". If everyone takes up their entitlement, its just a way of raising finance in a way that leaves everyone in the same relative position.

My major concern is who this deal panders too: the large existing shareholders or creditors? It is obvious that small shareholders are an after thought.

If the deal is padering to large existing shareholders, I can live with it. What the 'headline' 8 cent rate might be designed to do is overstate the direness of the situation (i.e. we could only sell it at 8 cents), so that small shareholders do not take up their entitlement. After all, it could have been 2 for 1 at 16 cents for the same effect (in terms of amount raised). What might be happening is that Create Group and other large shareholders have been contacted to see what price they would be willing to buy $x millions worth of stock. They have stated a price, and management have responded with much bowing and scraping. These large shareholders will suck up all the un-subscribed stock at 8 cents, thereby getting a much larger chunk of stock. Providing a large 'free lunch' may be the only way of raising the necessary funds.

The doomsday scenario is that we are just throwing more money at GXY which will eventually go to creditors, who will also get the assets that are left over after. The way this has been managed - i.e. waiting until the cupboard was absolutely bare before dealing with the financial situation - lends some support to this idea. But management still stand to lose their jobs (in disgrace) if GXY goes into liquidation. So, I will discount this possibility for the time being.

At this stage, I will be taking up my entitlement, and will oversubscribe. If GXY can survive, 8 cents plus options is an absolute bargain.

But I and other will want the reassurance of knowing:

a. whether any proportion of the monies sought is underwritten. If we can't entice someone to underwrite at 8 cents, we are cactus.
or;
b. whether the largest shareholders have given an indication of their willingness to participate.

Without these assurances, many will simply be unwilling to throw good money after bad. Hopefully, the management will actually turn their attention towards the concerns of small shareholders...until know their attention may have been elsewhere.

Its a relief they are staying in suspension until offer is complete. Otherwise, it would get ugly, with people chasing the share price to 8 cents.

These are just initial thoughts.