I wouldn't argue to much with your interpretation but would take your view to another angle. Don';t forget Len lost control of Linc when a certain funder decided to exercise his loan conversion at a time when he received a very large, majority stake in the company. The guy who's brains were making it happen lost out . . .big time!
So lets pout that guy in another Company, call it CXY, and fast forward a few years. Don't you think he would make sure any funding didn't dilute his, and for that part, our holdings too much? Exactly.
So in that context, I see a funder that will provide $280 million in two funding streams and (even if the share price stayed at todays level for the remaining period -which it won't) they still raise $260 million AFTER fees and compensation. I appreciate the period till Xmas is not looking too good, but next year will see a successful trial burn and several other projects taken forward.
ALSO, think about how this would have affected dilution. If the 30 m shares were to be factored upo for the drop in share price, i.e. a roughly four times multiple (25c/6c) then 120 million shares would have been issued, and assuming nothing then happens till after the second fund raising the 50 m shares would turn into 200 million. All told that would put another 320 million shares on the register compared to the 80 million with the current deal.
So individually we have all gained . . . dilution equivalent would have been a 32 per cent reduction FOR ALL SHAREHOLDERS. In the circumstances losing 7 per cent of the monies raised compared with the minimum 2 per cent appears a very good and clever bit of fund raising.
It's late so please let me know if this dopesn't make sense!
CXY Price at posting:
6.9¢ Sentiment: LT Buy Disclosure: Held
