Ann: Share Purchase Plan to Grow SPACETALK Business, page-42

Dilution is always an issue but I’d argue that there is a discount on MWR because the market anticipated a cap raise in addition to other issues - ie loss of faith in management. Ironically in this environment you can raise money and be bid up because you have a strong balance sheet.

Let’s not forget that not too long ago the company paid $1.75m in cash to redeem convertible notes and now there is an equity raise $1.5m. So if management are being honest, this really is an equity raise to pay out the con note and is not to fund growth! All smoke and mirrors.

In previous posts I’ve set out in detail why a raise was needed and I assumed (this was before the con note announcement) that there was not enough capital. Since then they’ve paid that off and raised a similar amount so virtually no net change. That is my primary reason why I think $1.5m is not enough. Honestly for $1.5m you could get 1-2 high net worth individuals to cover that. The business needs $3-$5m to fund and accelerate growth.

There is material equity upside here if they can get some volume through this Christmas and dilution will be an after thought tbh.

But capital management has never been a strong suit of this business. Sometimes I bang my head up against the wall looking at the basic errors or missed opportunities from management that clearly have an excellent product in a growing market but keep kicking own goals on small things that impact confidence which is reflected in the SP.

This big announcement better be good or there will be a lot of irate shareholders!