@Seventoe - The rights issue.
Pro:
It's fully underwritten so we know the funds being raised are guaranteed to the company regardless of if eligible shareholders choose not to participate in the issue.
Con:
There's a quoted circa 17.63% effect of dilution as stated in the prospectus to any eligible shareholder that decides against participating in the rights issue at the quoted price of .02
I think the right answer for eligible shareholders is to give consideration to full or at least partial participation to reduce the effect of dilution on their existing holding rather than to completely ignore and do nothing.
I also think consideration should be given to the significant reduction in proposed future milestone related performance shares to be issued on attainment of quite aggressive (IMO) revised milestones (1m & 5m downloads). The comparative future dilution effect has been reduced under the new proposed setup yet to be voted and approved by shareholders.
Perhaps non participation is somewhat negated by this proposed reduction in future performance shares in the knowledge that post rights issue the company is to be fully funded up to launch stage of proceedings.
A post was made on Twitter from a Hunter Capital representative that stated that management had agreed to a 65% reduction in performance shares and that with this reduction and the underwritten rights issue that dilution would be circa 10%. A statement was also made by the same representative supporting the claim that post rights issue the company will be fully funded to product launch.
Of course if shareholders are unsure of what course of action to take (if any) then seeking advice from a qualified advisor would be the way to go. The information contained within this post is purely my opinion based on my own limited understanding and experience in both investing and participation in issues etc.
