If the funding is done through a CR with a sizable discount then I think there would be very little hope that the SP would reach 8 cents in the relatively near term. If past history is anything to go by then I believe you are looking at ~25% discount from current price or worse for CR. I think it is useful to remind people that when the last CR happened some people were, from memory, caught offguard because they were very adamant that there would be “institutional” funds coming in at no dilution to shareholders. Now the same hope has re-emerge and I think people would be left dissapointed yet again like last time. The last SPP, which was done at 12 cents, only had, from memory, ~53% participation rate and it was allegedly for the design, build and launch of 20 pearls. I think it is safe to assume now that the build and launch of the full 20 pearls has not happened, ramp up of revenue for the 3Ds also never happened...thus we are left with a lot of people who participated in the last CR presumably being burned by quite a bit. So based on my understanding, SAS now has ~510 million shares to do CR with and if SAS does decide to do a CR then I would expect it to be done at ~0.0435 cents or lower. So to calculate how much dilution there would be assuming same market cap of around ~100 million:
1.8 billion + 510 million = 2.31 billion
if market cap 100 million then 100/2310 = 0.0433/share, so far from 8 cents.
That is assuming that the CR is successful at full uptake/full underwritten, etc...current SH prepared to cough up more cash plus new money coming in from private placement and all the rest.
Presumably that 0.0435*510 million is only = ~22.185 million, then there may be 6% fee like the last CR, so only ~20.85 million left...which I assume would not be enough to build and launch the amount of pearls needed, annually, to get to 200+ pearls and maintain that number by 2025...by my personal calculation SAS need to launch ~50+/annually at the very least to get to 200+, safely, by 2025. I expect operational cost alone based on prior financial reports to be ~3+ million/quarter so ~15 million annually I think would not be too unreasonable to expect. So presumably that is only ~5.85 million to spend on the pearls...that seems to be only enough for 5-7 pearls...
Then I think we have to take into account that, from what I understand, the 3Ds orbit at ~500 km and have much smaller designs that from my knowledge have no propulsion. So essentially SAS have not proven themselves at being capable of operating the pearls who orbit at much higher altitude of 700 to 750km at different planes, etc. So what if they fail? I think the risk is there to consider. To be honest, I always wonder why SAS didn’t launch the real deal, the pearls in the first place and test them out. Then not only would they be able to prove things in more definite term but also able to generate revenue. Why launch much smaller satellites to begin with especially since SAS bragged about having been able to raise, from memory, 35 million so far. I think personally, instead of spending their time around the world signing MoUs and launching the 3Ds they could potentially just design the pearls and launch a few to start with.
So all in all then if I am personally a participant in what I expect to be the upcoming CR, should I expect another CR within the same year? Probably so, that is assuming that everything goes well in the first place ie. launcher is booked and ready, everything is build, etc...the SP went downhill from the last CR, technically I would expect the same to happen after the next CR. Honestly, I always wonder why on earth SAS didn’t just launch a few pearls, with the amount of money they got before they ended up in present position..
Something to think about...I guess especially for new investors.
Please do your own research, everthing based on my understanding, opinion and assumption.
